December 19, 2016 Dear Governor Christie: Pursuant to Chapter 150, Laws of 1979, I herein transmit the minutes of actions taken at the open session of the regularly scheduled meetings of the New Jersey Transit Corporation, NJ TRANSIT Rail Operations, Inc., NJ TRANSIT Bus Operations, Inc., NJ TRANSIT Mercer, Inc., and NJ TRANSIT Morris, Inc., Board of Directors held on Wednesday, December 14, 2016. Sincerely, Original Signed By Joyce J. Zuczek Board Secretary Enclosures Honorable Chris Christie Governor, State of New Jersey State House Trenton, NJ 08625

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Minutes of the actions taken at the Open Session of the regularly scheduled Board of Directors’ meetings of the New Jersey Transit Corporation, NJ TRANSIT Rail Operations, Inc., NJ TRANSIT Bus Operations, Inc., NJ TRANSIT Mercer, Inc., and NJ TRANSIT Morris, Inc. held at NJ TRANSIT Headquarters, One Penn Plaza East, Newark, New Jersey on Wednesday, December 14, 2016. Present Richard T. Hammer, Chairman Bruce M. Meisel, Vice Chairman Lisa LeBoeuf, Governor’s Representative Steven M. Petrecca, Treasurer’s Representative James C. Finkle Jr., Board Member Flora M. Castillo, Board Member Raymond W. Greaves, Board Member (Non-Voting) (By Telephone) Also Present Steven H. Santoro, Executive Director Amy B. Herbold, Deputy Executive Director Michael P. Kilcoyne, Vice President and General Manager, Bus Operations Robert Lavell, Vice President and General Manager, Rail Operations Dennis J. Martin, Vice President and General Manager, Light Rail and Contract Services Christopher Trucillo, Chief of Police Warren A. Hersh, Auditor General Michael J. Lihvarcik, Chief Financial Officer and Treasurer Michael K. Slack, Chief Information Officer Penelope L. Bassett, Assistant Executive Director, Communications and Customer Service Eric R. Daleo, Assistant Executive Director, Capital Planning and Programs Gardner C. Tabon, Chief, Office of System Safety Michael Gonnella, Deputy Attorney General Joyce J. Zuczek, Board Secretary Chairman Hammer convened the Open Session at 9:07 a.m. in accordance with the Open Public Meetings Act. He mentioned the passing of longtime transit advocate Phil Craig who was routinely a member of the group who attended the Advocate Roundtable which meets with the Executive Director. Chairman Hammer said Phil Craig’s knowledge, insight, and advocacy on behalf of riders would be sorely missed. He said their thoughts and prayers go out to Phil Craig’s family. Betsy Stern, Office of System Safety, provided a Public Safety Announcement. The Pledge of Allegiance to the Flag was conducted. Board Secretary Zuczek conducted a Roll Call. Board Secretary Zuczek announced that adequate notice of the regularly scheduled meetings of the New Jersey Transit Corporation, NJ TRANSIT Rail Operations Inc.,

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NJ TRANSIT Bus Operations, Inc. NJ TRANSIT Mercer, Inc. and NJ TRANSIT Morris, Inc. was provided in accordance with the Open Public Meetings Act, Chapter 231, P.L. 1975, and the meetings were occurring concurrently. Notices were filed on December 8, 2016 with the Secretary of State. These notices were mailed to newspapers of general distribution, posted in the main entrance of NJ TRANSIT headquarters, and sent to each individual, agency and organization that requested such notice. Board Secretary Zuczek announced that the Board Meeting was being video recorded Chairman Hammer asked for a motion to approve the minutes of the November 9, 2016, and November 18, 2016 Board meetings. A motion was made by Vice Chairman Bruce M. Meisel, seconded by Board Member Flora M. Castillo, and unanimously adopted. Public Comments on Agenda Items and Other Matters There were 15 public comments. Board Secretary Zuczek announced public comments would be limited to five minutes in order to give everyone an opportunity to be heard. Carl Anthony Cooper is a member of Residents Against Giant Electric (RAGE) and a resident of Holmdel. Mr. Cooper stated that NJ TRANSIT would not benefit from JCP&L’s proposed 230 kV transmission line but it would take on significant liabilities and risks. The project would be under construction for approximately two years during which time heavy equipment would operate in close proximity to NJ TRANSIT’s train line as well as nearby houses. He questioned how bad train delays would be during the construction period including construction incidents. He stated that after the construction NJ TRANSIT would bear additional risks such as monopoles or wires falling onto the train line. Mr. Cooper stated that EMF has not been proven to be safe at close distances combined with repetitious exposure. He also said they have been statistically correlated to be related to health risks. Mr. Cooper left a report with the Board Secretary. He questioned the level of NJ TRANSIT’s concern for its customers, employees, and the public. He reiterated that NJ TRANSIT would acquire unnecessary avoidable risks for a project that only provides a third redundant transmission line which does not address deficiencies in the distribution system. Kin Gee is a Holmdel resident and spoke on the proposed JCP&L project. He addressed a question posed at the last Board Meeting regarding how JCP&L would profit from this project. He stated that he would address that issue as well as the impact on area residents and NJ TRANSIT’s train line. On October 28, 2016, JCP&L filed a change in how they would calculate their transmission charges to their customers. Mr. Gee stated that based on information contained in that filing, JCP&L would make a profit of $4.9 million in year one decreasing slightly in each subsequent year due to depreciation of transmission assets, typically depreciated over a 40-year period. Mr. Gee stated that over the 40-year period, JCP&L was expected to make $124 million. Using a discount rate of five percent, the net present value of the future profit is approximately $65 million. He stated that the profit to JCP&L comes at a high cost to the residents: (1) Transmission charges to residents will increase by 54 percent in 2017; and (2) Residents along the corridor will see significant property value destruction. Based on studies of this impact, the

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group has estimated that the lost property value in Holmdel would be $23 to $34 million and that the impact in the five towns directly affected would be over $100 million. Mr. Gee reiterated the residents’ concern that the project was a redundant line for a backup that has failed only twice over the last 10 years for an aggregate of only 10 hours. Mr. Gee then noted that the minimum right-of-way width for a 230 kV transmission line is 150 feet. The North Jersey Coast Line right-of-way is only 100 feet wide and includes the tracks for the train line, an effective width of 15 feet on each side. He further stated that JCP&L states that the average distance from customers is 900 feet. However, for this project the average distance is 10 to 12½ feet. Monopoles are 10 feet at the base which would have to be installed in a right-of-way of 15 feet between an active commuter line and residential properties. Mr. Gee stated that this is unprecedented in the United States. The construction would require heavy equipment and possibly helicopters in an area with no clearance. He concluded by requesting that the Board reject JCP&L’s request to use the right-of-way for this project. Vice-Chairman Meisel stated that Mr. Gee should come back to the Board and discuss what would happen if JCP&L put the transmission line underground. Information regarding that option should be part of the discussion. Burying lines would eliminate concern about location of power lines as well as negative impacts in property values. Since the residents are paying for the line the choice should be not doing the project or burying line. Mr. Gee indicated that they would return at a future time with the additional information. It is RAGE’s contention that JCP&L has not made the case for the project but he agreed that there are other options including burial or micro grids. Rachel Kanapka represents RAGE. She started by thanking Vice Chairman Meisel, Board Members Finkle and Castillo, and NJ TRANSIT staff who visited Monmouth County. She provided a folder with maps of the 10-mile route and photos of the adjacent residences. Ms. Kanapka said the corridor is narrow and close to houses and JCP&L wants to install 108 poles between the right-of-way and houses. Based on RAGE’s research regarding other transmission-line projects, Ms. Kanapka stated that the proposed JCP&L site is not a typical corridor. A typical corridor is 150 feet wide with no obstructions and poles are 900 feet away from public property. NJ TRANSIT’s rail corridor is 100 feet wide with an active rail line and 10 to 12 feet from the residents. She added that JCP&L admits no other project is sited over an active railroad. Ms. Kanapka reiterated previous statements regarding the potential hazards of the project. She noted on December 4, 2016, there was a freight train in Ohio that crashed into a high voltage power line. She said that train was slow moving in a rural area with houses and people far away. The tower tipped but did not fall over, the tracks were de-energized, and service was suspended for several days. Ms. Kanapka argued that the JCP&L project was near trains full of commuters and employees and the faster trains would likely have knocked down a monopole. She noted the close proximity to residences in a high-density

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area and said due to the height of the poles, they could fall and land on a train, track equipment, residences or people. Ms. Kanapka implored NJ TRANSIT to do its due diligence and consult outside safety transportation engineering experts to get an objective view if they are considering approving the request. If the request is not going to be approved, she requested it be done quickly because the State is spending money and resources every day to evaluate a half-baked plan without a location confirmed. Ms. Kanapka said if NJ TRANSIT says no, the project ends and the waste would go away. On behalf of thousands in RAGE, including the 70 letters delivered that day, she urged NJ TRANSIT to reject JCP&L’s request. Orrin Getz is a resident of Rockland County. He opened by stating that he traveled to Newark via Train 1612 out of Nanuet, which was 10 minutes late. There was no announcement as to why the train was late and Mr. Getz said this is an on-going problem. Mr. Getz provided the Board with a handout from the Metro-North and Long Island Railroad Committee meetings and stated that it contained a wealth of information not provided by NJ TRANSIT, including minutes of previous meetings and detailed information regarding operations, ridership, and finance. He said the document included an entire section on the new M9 train procurement. Mr. Getz added that the mean distance between failures for the M7, a self-propelled vehicle, was far superior to what NJ TRANSIT was experiencing. He said NJ TRANSIT is moving away from self-propelled to locomotives and he believes NJ TRANSIT should look into what other railroads are doing and buy more reliable equipment. Mr. Getz stated that he is in support of the Amtrak agreement. He reiterated previous statements that NJ TRANSIT needs a dedicated source of funds and again called for a utility surcharge. Mr. Getz then said that the two missing sidings on the Pascack Valley Line should be reevaluated and that it was time to re-negotiate the Memorandum of Understanding. He stated that Rockland County would provide some funding for the construction. Vice Chairman Meisel agreed that the sidings should be reevaluated. Jose Torres spoke on the proposed JCP&L 230 kV transmission line and urged the Board to reject JCP&L’s request to use the rail right-of-way. Vice Chairman Meisel discussed what he saw when he visited Monmouth County. They started by taking a train from Newark to Aberdeen and then toured Aberdeen, Hazlet, Holmdel and Middletown. Where they ended in Middletown, they could see Red Bank across the Navasink River and he was struck that the tallest buildings in Red Bank were 12-stories high, whereas the monopoles proposed would be the equivalent of a 20-story building. Vice Chairman Meisel was also struck by the number of signs all over the five communities. He said it was very clear the speakers at the Board meetings were speaking on behalf of an incredibly wide number of community members and not just themselves.

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Vice Chairman Meisel said there was a discussion with realtors about the diminution of property values and noted they were already experiencing them merely from the existence of the proposal. He said the properties offers, if even at all since some were unmarketable, were discounted 30 to 45 percent just because the proposal exists. Vice Chairman Meisel noted his knowledge was related to Bergen County so he went on the tour with no predisposition regarding Monmouth County. He has been involved in a lot of land use practice. Vice Chairman Meisel said the standard variance requires showing a substantial benefit to the community, and not a substantial detriment to the community. Vice Chairman Meisel said if he were on the Board voting on the project in Monmouth County, he would vote absolutely no and he believes the project is the most unworthy project he has seen in his entire history practicing law. He said there was no basis of outages and the detriment to the communities is enormous. Vice Chairman Meisel said there would be a loss of ratables and diminution of life, and it would not just be the people along the right-of-way that suffered the detriment. He said the assessed properties would go down and with whole swaths assessed at a reduced value, the taxes would go up for other houses, resulting in more houses with decreased values for selling them. Vice Chairman Meisel said this would impact local taxes, schools, municipalities and the counties. He expressed doubts about the need for the project based on what he has read. Vice Chairman Meisel noted the advocates have done an impressive job providing information in a cogent way. He thought the only way this project could be done is if the lines were buried so residents only pay the surcharge and not pay twice by losing property value. Vice Chairman Meisel expressed doubt about whether the project should go forward but noted it was a question for the Board of Public Utilities. He noted other Board Members could not comment on the matter because that would preclude them from voting on it. Board Secretary Zuczek announced there were an additional 15 speakers signed up to discuss the Russell Graddy matter. There were discussions regarding having some represent the group and limiting the amount of time to speak. Chairman Hammer said he would allow all the speakers a chance to speak but would limit their time to two minutes each. Stan Matthews said he would caucus with the group on how to make their time the most effective and noted some were still going through security. Chairman Hammer said they would move onto the next matter and if the group was still not prepared to speak, they could speaker later in the meeting. Advisory Committee Report Suzanne Mack wished everyone happy holidays. They mourn Phil Craig who was a member of the Roundtable. She was impressed with how the Board handled the JCP&L project issues and the recent safety issues. Ms. Mack thought the advocates did a good job presenting the issues. She believes the Board, led by the Chairman and Vice Chairman, have handled the JCP&L proposal matter well and provided a fair hearing.

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Ms. Mack said they had a joint meeting in Trenton and it was the first time they met since Steven Santoro became Executive Director. She thanked Executive Director Santoro and former Interim Executive Director Dennis Martin for being at the helm during a tough period. Ms. Mack said the Joint Committee thought the Executive Management Team and the Board were poised in position to really handle challenges as they move into 2017. The underlying themes discussed by the Committees were safety and the budget. They were very happy to hear there would be no fare increase in 2017, and they noted NJ TRANSIT was taking safety issues very seriously and has many strategies in place to make sure the public can be safe. They received a presentation by Dennis Martin regarding light rail and opportunities for expansion. They also discussed bus allocations and Access Link. She was amazed they are still dealing with the impacts of Sandy and it looks like the repairs will go on for a few more years. Ms. Mack noted the Hudson-Bergen Light Rail would be shut down on weekends for repairs. She said they have had unexpected challenges brought on by weather and it has taken years to recover. They recognized that the NJ TRANSIT Board and staff are really committed to the people of New Jersey and to the mission of NJ TRANSIT. Ms. Mack thanked them for their service because they have done a remarkable job in a very difficult year. Board Customer Service Committee Report Board Member Finkle presented the report for the Customer Service Committee. The Customer Service Committee received a Customer Service update and report on the Social Media Dashboard. The Committee also received a report on the Fiscal Year 2017 First Quarter Customer Satisfaction Survey results. Board Administration Committee Report Board Member Finkle presented the report for the Administration Committee. The Administration Committee received a Financial Update, which included an analysis of ridership trends. Board Capital Planning, Policy, and Privatization Committee Report Vice Chairman Meisel presented the report for the Capital Planning, Policy and Privatization Committee. The Capital Planning, Policy and Privatization Committee discussed the board items for the Interagency Capital Agreement with Amtrak and Refunding of the COPs, Bonds, and Notes and Potential New Money Financing. Vice Chairman Meisel noted they spent a substantial amount of time discussing the COPs item because of its complexity. Executive Director’s Monthly Report Executive Director Santoro has said on several occasions, NJ TRANSIT is hiring. That’s more than just a slogan. Over the past several weeks they have been taking concrete actions to attract talented individuals to fill critical roles and give each of the operating lines the tools they need for success. Since October 14, 2016, they have hired more

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than 100 people to fill positions throughout the organization. In addition, 39 non-agreement jobs had been posted and more than 130 agreement positions, including 83 full time bus operators, had been approved for posting. In particular they have filled four open positions in the Office of System Safety and for another seven positions, they are either interviewing or receiving resumes. They are also progressing the search for a Compliance Officer. The job has been posted and they are actively receiving resumes. The Compliance Officer will ensure that NJ TRANSIT is adhering to all of the regulations and reporting requirements of various entities. The recruitment efforts don’t stop there. They are also utilizing the resources of the Department of Labor and their initiatives, as well as various job fairs, to help fulfill immediate hiring needs. In November and December alone, NJ TRANSIT had representatives at seven job fairs, including Stevens Institute of Technology and other technical schools. While NJ TRANSIT has staffing needs now, they are looking to the future as well. Part of the long-term strategy depends on cultivating interest in NJ TRANSIT to students at colleges and universities around the state. The basic concepts of mass transportation and railroads may date back hundreds of years, but they are more relevant now than ever. In fact, new and innovative ways to transport people will be the foundation for a sustainable future. They need to let students know that this is not the railroad of the Wild West. This is high-tech, state of the art engineering. By getting students excited about these types of advancements they can sow the seeds for them to choose NJ TRANSIT as a career path and become the future leaders of this organization. In that respect, NJ TRANSIT has fostered a close relationship with Rutgers University. The Railroad Research and Educational Program at Rutgers was founded in 2014 and since last year NJ TRANSIT has had good communication and collaboration. And in the spring, Executive Director Santoro has been invited to speak at the Rutgers Newark School of Public Affairs and Administration. They are working to finalize the scheduling on that, but Executive Director Santoro is excited to give back to his alma mater of Rutgers and looks forward to personally engaging with the students about NJ TRANSIT. One of the items for consideration on the agenda was the proposed capital agreement with Amtrak. This was born out of the Passenger Rail Investment and Improvement Act of 2008, which mandated the creation of a Northeast Corridor Commission and a standard formula to allocate costs on the Corridor among the eight states and the District of Columbia, which share a portion of the tracks. The capital contributions will cover the infrastructure investment required annually to maintain a state-of-good-repair. This collaboration provides for wiser investment and coordination, which will result in improved passenger rail service along the Northeast Corridor. In spite of continuing employment growth in the region served by NJ TRANSIT, falling gasoline prices have resulted in moderating ridership levels. While NJ TRANSIT has

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steadily gained customers over the last couple of fiscal years, by mid-Fiscal Year 2015, the intensifying decline in gasoline prices mitigated the overall growth by making it less financially burdensome for commuters to utilize their cars, thereby putting fewer people on NJ TRANSIT’s system. NJ TRANSIT has seen similar rider trends at neighboring transit systems, as well as nationally. This is not an issue isolated to NJ TRANSIT. The net result was that falling gasoline prices have canceled out the ridership gains expected to be created by the region’s increased employment and economic activity. As reported at the public Administration Committee meeting, through September, NJ TRANSIT’s fare box revenue shortfall was $8 million and through October there was a $12 million shortfall. A second item on the agenda sought to address several near-term needs. By restructuring several older financial agreements for the purchase of bus and rail rolling stock, NJ TRANSIT will fund new initiatives in Fiscal Year 2017 and Fiscal Year 2018, as well as cover operating revenue shortfalls due primarily to declining ridership. NJ TRANSIT will be able to move more expeditiously on safety initiatives like funding the confidential close call reporting system known as C3RS and implementing new technology to assist rail crews with switch alignment indicators to reduce run-through switches in yards. This restructuring will also be utilized to ensure the Positive Train Control project, and other critical technology projects, are fully funded and staffed with salaries that are competitive. Since the incident at Hoboken Terminal, NJ TRANSIT has been recommitting itself to its top priority of safety. They were pleased to see that the recent Safety Advisory issued by the Federal Railroad Administration mirrors some of the work already undertaken in regards to inward and outward cameras on trains and focusing on sleep apnea screenings. Much of NJ TRANSIT’s locomotive fleet, more than 130 of them to be precise, already has outward front-facing cameras, as do 62 multi-level cab cars. NJ TRANSIT has already begun the process of installing inward facing cameras, and anticipates that by the end of 2017, the entire fleet of locomotives, cab cars and multilevel units would be fitted with both outward and inward facing cameras. Further, as NJ TRANSIT moves forward, any new equipment that is procured will have both of these camera systems as part of the standard specification. In regards to sleep apnea, NJ TRANSIT has already begun the process of refining its screening process. In October NJ TRANSIT took an interim measure, which included mandating the immediate removal of locomotive engineers and conductors, who exhibit any indication of potential fatigue symptoms until they obtain the appropriate documentation attesting to the satisfactory correction or control of any existing condition. They are working on permanent procedures that will be shared shortly. In addition, NJ TRANSIT is refining not only the sleep apnea screening, but also the drug and alcohol testing. Beginning in June of next year, NJ TRANSIT will add approximately 900 maintenance-of-way rail employees to the random drug and alcohol testing process, following new FRA regulations. Currently, NJ TRANSIT’s medical

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department screens more than 7,000 employees each year for drugs and alcohol. In advance of adding these 900 maintenance-of-way employees to the testing process, NJ TRANSIT is conducting a top to bottom review of the medical department so as not to overwhelm its current capabilities. In that respect, they will be looking at the most thorough and efficient way to operate the medical department, which includes potentially outsourcing a portion of the tasks such as the drug and alcohol testing. In addition to NJ TRANSIT’s focus on operational safety, they are also continuing to train employees in incident management. NJ TRANSIT has in place a Comprehensive Emergency Management Plan, known as the CEMP, which is updated annually and delineates specific duties for each business line when it comes to the management of any incident that impacts NJ TRANSIT’s system beyond the regular course of business activities. All executive managers and many director-level and above personnel have received instruction and retraining on the development and implementation of the CEMP, which is coordinated and managed by New Jersey Transit Police Department’s Office of Emergency Management (OEM). The CEMP has been utilized in planning efforts for the potential rail strike, the recent Papal visit, and it is also used in preparation for weather events and for accidents. Also, for the last seven years, NJ TRANSIT has been training in incident management at the Texas A&M Engineering Extension Service, known as TEEX, in College Station, Texas. The Department of Homeland Security recognizes TEEX as a Center for Excellence as it relates to the delivery of training regarding the National Incident Management System (NIMS). Each year, groups of NJ TRANSIT employees from different functional areas, with local New Jersey first responders, are sent to TEEX for training to participate in real-life scenarios that help develop the strategic thinking, decision-making skills and partnerships necessary to manage serious incidents that might impact NJ TRANSIT’s system and customers. To date, more than 1,000 individuals, more than half from NJ TRANSIT alone, have participated in the TEEX training program. They have moved into December and that means they are coming into the winter weather season. NJ TRANSIT’s rail, light rail, and bus operations are prepared to handle what Mother Nature dishes out. NJ TRANSIT’s two jet powered snow blowers will be at the ready to clear switches at Hoboken Yard and at the Meadows Maintenance Complex. Crews have been out inspecting and winterizing the rail cars and locomotives as well as inspecting hundreds of switches and switch heaters. Bus maintenance personnel have checked heating systems and fluids in more than 2,000 buses. This year NJ TRANSIT has 900 tons of bulk salt on standby across the state and hundreds of bags of salt for the bus garages. Light rail crews also have been out inspecting the infrastructure, and vendor contracts have been finalized to perform plowing of larger park and ride facilities and lots. As is the case each and every year, the hard working men and women of NJ TRANSIT will be out in all types of weather and during all hours of the day and night helping to keep the system moving.

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Speaking of keeping the system moving, NJ TRANSIT had a successful Thanksgiving weekend transporting its customers to destination to enjoy the holiday with family and loved ones. Executive Director Santoro publicly thanked all of NJ TRANSIT’s workers who sacrificed time from their own families to continue the critical transportation services. Besides the winter weather season, they were also in the midst of the holiday season. On Friday December 2, 2016, the annual Railmen for Children Santa Train departed Hoboken. The magical journey up to Harriman, New York was filled with children, decorations, presents, and of course Santa and Mrs. Claus. For some of the children the presents they received on this trip may be the only ones they receive this season. The Railmen for Children do an outstanding job of making those wishes come true through lots of hard work and the generosity of fundraisers throughout the year. As part of the Governor’s Season of Service, Executive Director Santoro has had the privilege of helping in NJ TRANSIT’s annual coat and toy drives. One of the most fulfilling aspects of this time of year is to be able to give back to the community. Executive Director Santoro said during this time, their thoughts go out to the family of Phil Craig, whom Chairman Hammer spoke of earlier, and to another loyal transit advocate, David Peter Alan, who recently underwent surgery. Executive Director Santoro was happy to say Mr. Alan was recuperating and they wish him a speedy recovery. Executive Director Santoro took a moment to recognize their colleague Dan O’Connell, the State Legislative Director for the International Association of Sheet Metal, Air, Rail and Transportation Workers. Dan O’Connell was retiring the next week after a long and distinguished career and this was his final meeting. Executive Director Santoro thanked Dan O’Connell for all he has done for NJ TRANSIT and wished him the best in retirement. Executive Director Santoro wished everyone a very happy and healthy holiday season and a safe New Year. Executive Director Santoro introduced Janice Pepper who provided the most recent Scorecard Survey Results. He thanked Ms. Pepper and noted this was her last presentation as she was retiring from NJ TRANSIT. Executive Director Santoro said they would miss her diligence and great knowledge of the survey, and her shoes would be hard to fill. He thanked her for her dedication to NJ TRANSIT for 25 years. Janice Pepper shared the First Quarter Fiscal Year 2017 Customer Satisfaction Survey results. This marked the twenty first tracking period and began the sixth year of NJ TRANSIT's online customer satisfaction survey. No other transportation agency in the country measures customer satisfaction quarterly among 16 markets using in house resources.

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The methodology has stayed consistent so that customer satisfaction scores can be tracked over time. The survey was launched on September 15, 2016 and was open until October 2, 2016. As always, customers were asked to rate their satisfaction across 42 attributes of service and select the three most important attributes. With all of the work done by NJ TRANSIT’s Marketing and Communication team, and throughout the agency, including the IT department inviting approximately 750,000 customers via email, NJ TRANSIT received nearly 30,000 responses this quarter. This quarter NJ TRANSIT received comments from over 10,000 customers and these comments were forwarded to the operating departments for review and action. The comments help the corporation understand the scores and the attributes of service that drive satisfaction for NJ TRANSIT’s customer. Ms. Pepper noted the score, a 6.4, was the highest achieved and tied with Third Quarter of Fiscal Year 2013 and First Quarter of Fiscal Year 2014. This increase was predominantly attributed to the increase in the bus score and the rail score remaining stable. Overall customer satisfaction for the bus system increased from 6.4 to 6.5 this quarter representing the highest overall bus score since the survey was implemented in April 2011. North Jersey Local Bus increased from 6.7 to 6.8; South Jersey increased from 7.2 to 7.3; and Contract Carriers showed a slight decline from 6.6 to 6.4. Interstate Bus score saw an improvement from 5.9 to 6.0, the highest score achieved since the scorecard survey was launched in April 2011. Considering NJ TRANSIT’s initiatives to improve circulation in and out of the Port Authority, the scores of the Interstate Bus market have seen continuous improvement from 5.0 in Fiscal Year 2015 First Quarter to 5.7 in Fiscal Year 2016 First Quarter to 6.0 in the current survey. Customers made the following comments: “Great improvement in managing the gate changes, thank you for making it easier and better!” “Very impressed in the changes and upgrades you have made, I like the way the company is progressing keep up the Good Work.” Rail maintained its overall satisfaction score of 6.1. All eight rail lines either maintained their overall customer satisfaction score or saw an increase this past quarter. Light rail customers' overall satisfaction increased from 6.8 in the last quarter to 7.0 in the current quarter. For Access Link, the overall satisfaction score has decreased from 8.0 to 7.7 this quarter, but remains the highest overall customer satisfaction score among all 16 markets measured. Customers gave a 78 percent Likelihood to Recommend score to the ultimate question, which was the second highest recommendation score since the baseline.

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On-time performance, fares, and weekday pm peak schedule were key drivers for bus. On-time performance and weekday pm peak schedule have remained as key drivers since the inception of the survey. The top concern for rail customers this quarter was fares. Mechanical reliability dropped off the key driver to improve list. Seating availability was a key driver to improve on the Pascack Valley Line and the customer satisfaction score decreased significantly from 6.0 to 5.6. Customer comments included “Trains are overcrowded, recently due to short # cars. Standing room only and into the space between the cars.” Seating availability, safety, fares, and security continued to be top concerns for light rail customers. This quarter cleanliness on-board and comfort on-board were added as key drivers. Scheduling, on-time performance, trip time, and reservationists were the top concerns for Access Link customers. Fares and comfort on-board have fallen off the key driver to improve list. Questions about smart phone usage and the NJ TRANSIT app were added this quarter. Consistent with PEW Research Center’s findings of smartphone usage still on the rise, they see that there has been smartphone growth in all major markets: bus, rail, light rail, and Access Link. This quarter, they also asked customers about usage of NJ TRANSIT’s app. System-wide, 69 percent of NJ TRANSIT customers have loaded the app on their phone and used one or more features of the app. MyTix was the most used feature for overall system, rail, and light rail; while MyBus was the most used feature for Bus customers. As may be expected, a high percentage of Rail customers used the feature for train schedules. All of the scores and reports were posted on NJ TRANSIT website on November 20, 2016, the day before the Fiscal Year 2017 Second Quarter survey was launched. The Fiscal Year 2017 Second Quarter survey was in the field November 21, 2016 through December 9, 2016, and the research team is analyzing these results. Action Items 1612-67: INTERAGENCY CAPITAL AGREEMENT WITH AMTRAK Executive Director Santoro introduced Eric Daleo, Assistant Executive Director, Capital Planning and Programs, who presented Action Item #1612-67 for approval. Eric Daleo recommended approval of Item #1612-67, Interagency Capital Agreement with Amtrak. Approval was requested to negotiate and enter into an Agreement with Amtrak setting forth the terms and conditions providing for and compensating Amtrak for

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maintenance of railroad facilities on the Northeast Corridor, which Agreement is retroactive to October 1, 2015, the date of the executed Northeast Corridor Commuter and Intercity Rail Cost Allocation Policy, as required under the Passenger Rail Investment and Improvement Act of 2008. Board Member James C. Finkle Jr. moved the resolution, Vice Chairman Bruce M. Meisel seconded it, and it was unanimously adopted.

Roll Call Vote:

Hammer Meisel LeBoeuf Petrecca Castillo Finkle Greaves Yes Yes Yes Yes Yes Yes (Non-Voting Member)

1612-68: REFINANCING OF OUTSTANDING STATE OF NEW JERSEY

CERTIFICATES OF PARTICIPATION, NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (“NJEDA”) TRANSPORTATION PROJECT SUBLEASE REVENUE REFUNDING BONDS (NEW JERSEY TRANSIT CORPORATION LIGHT RAIL TRANSIT SYSTEM PROJECT) 2008 SERIES A AND NEW JERSEY TRANSIT CORPORATION GRANT ANTICIPATION NOTES, SERIES 2014A (FEDERAL TRANSIT ADMINISTRATION SECTION 5307 URBANIZED AREA FORMULA FUNDS), AND NEW MONEY FINANCING, IF ANY, VIA THE ISSUANCE OF NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY TRANSPORTATION PROJECT SUBLEASE REVENUE AND REVENUE REFUNDING BONDS AND AUTHORIZING THE EXECUTION AND DELIVERY OF A LEASE AGREEMENT AND SUBLEASE AGREEMENT WITH THE NJEDA AND ENTRY INTO A FUNDING AGREEMENT, EACH IN CONNECTION WITH THE ISSUANCE OF NJEDA TRANSPORTATION PROJECT SUBLEASE REVENUE AND REVENUE REFUNDING BONDS

Executive Director Santoro introduced Michael Lihvarcik, Chief Financial Officer and Treasurer, who presented Action Item #1612-68 for approval. Michael Lihvarcik recommended approval of Item #1612-68, Refinancing of Outstanding State of New Jersey Certificates of Participation, New Jersey Economic Development Authority (“NJEDA”) Transportation Project Sublease Revenue Refunding Bonds (New Jersey Transit Corporation Light Rail Transit System Project) 2008 Series A and New Jersey Transit Corporation Grant Anticipation Notes, Series 2014A (Federal Transit Administration Section 5307 Urbanized Area Formula Funds), and New Money Financing, if any, via the Issuance of New Jersey Economic Development Authority Transportation Project Sublease Revenue and Revenue Refunding Bonds and Authorizing the Execution and Delivery of a Lease Agreement and Sublease Agreement with the NJEDA and Entry into a Funding Agreement, Each in Connection with the

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Issuance of NJEDA Transportation Project Sublease Revenue and Revenue Refunding Bonds. Approval was requested to: 1. Approve the refunding of the COPs, the 2008 NJEDA Bonds and the 2014 NJ TRANSIT Notes and issuance of the new money portion, if any, via the issuance of the Bonds, and authorize the execution and delivery of the Lease Financing Documents and the Funding Agreement by an Authorized Officer (as defined below), provided that the term of the Bonds shall not exceed thirty (30) years and the maximum par amount of the new money portion of the Bonds shall be in an amount sufficient to produce approximately $60 million for capital projects; 2. Authorize an Authorized Officer to execute and deliver the Lease Financing Documents, the Funding Agreement and such other documents, instruments, agreements and papers and to do such acts and things as may be necessary or advisable to effectuate the transaction, with such changes, insertions and omissions as shall be approved by an Authorized Officer of the Authority, with the advice of the State Attorney General; 3. Authorize the payment of any costs incurred in connection with the issuance of the Bonds that are not paid for from the proceeds of such Bonds; 4. For the purposes of this Resolution an “Authorized Officer” shall mean the Chairman, Vice Chairman, Treasurer, Secretary, Executive Director or Chief Financial Officer of the Corporation and shall also mean any other person who shall be authorized by resolution of the Corporation to perform such act or to execute such document or any other person or persons who shall be authorized to act on behalf of the Corporation by the Chairman or Executive Director of the Corporation which certificate shall set forth such authorization and shall contain the specimen signatures of each such person; and 5. This resolution shall become effective 10 days after a copy of the minutes of the Corporation meeting at which this resolution was adopted has been delivered to the Governor for his approval, unless during such 10 days the Governor shall approve the same, in which case this resolution shall become effective upon such approval, as provided in the Act. Board Member Steven M. Petrecca moved the resolution, Board Member James C. Finkle Jr. seconded it, and it was unanimously adopted.

Roll Call Vote:

Hammer Meisel LeBoeuf Petrecca Castillo Finkle Greaves Yes Yes Yes Yes Yes Yes (Non-Voting Member)

Public Comments on Agenda Items and Other Matters (Continued) Chairman Hammer asked Board Secretary Zuczek to call the remaining speakers and asked the speakers to limit their comments to two minutes each. Stan Matthews Mr. Matthews stated that he would call on those to speak on behalf of Russell Graddy. He said that he was speaking on an old issue, a matter of two settlements. One NJ TRANSIT privately negotiated and the second, which was based on

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arbitration, both of which concluded that Mr. Graddy was owed $1.3 million. Mr. Matthews said the judge who oversaw and recommended mediation retracted those recommendations and said he had no standing to ask for mediation in the first place. On a third occasion NJ TRANSIT offered Mr. Graddy $183,000 to settle remaining differences. Mr. Matthews stated that the offer of $183,000 was a non-offer since Mr. Graddy paid more than $1 million in improvements. Mr. Matthews said that the speakers would state why the arbitration award should be reinstated and that Mr. Graddy is a figure of admiration throughout the state. Vice Chairman Meisel said that he and the rest of the Board were not in that capacity in 2007 and requested clarification of the issue. Mr. Matthews stated that a lease had been in place since 1991. He said that NJ TRANSIT on one occasion asked Atlantic Souvenirs and Snacks to move to a new location, and NJ TRANSIT would pay the physical relocation expenses. Mr. Matthews stated that Mr. Graddy spent more than $1 million to outfit the new space. NJ TRANSIT then asked Mr. Graddy to move again with the same arrangement as the first time. Mr. Graddy agreed to move and outfit the new space through NJ TRANSIT’s agent ACA. He moved, turned in his keys, and all the equipment was put into storage. Mr. Matthews said Mr. Graddy continued to receive invoices for the rent, which he paid for approximately 18 months. NJ TRANSIT continued to invoice him for rent for an additional 10 months, despite not having access to the property, or his equipment, for this 28-month period. Mr. Matthews said ACA, CRDA, Mr. Graddy’s lawyers and NJ TRANSIT negotiated a $1.3 million settlement. Mr. Matthews then stated that Suzanne Silverman sent an email advising that she would not recognize the settlement. Mr. Matthews questioned her authority to do so as he claimed that the settlement was agreed to by ACA and CRDA, acting on behalf of NJ TRANSIT. Vice Chairman Meisel asked whether the settlement had been approved by the Board and Mr. Matthews stated it never came to the Board since Ms. Silverman refused to acknowledge the settlement. Mr. Matthews requested the Board to review the documentation and to address the issue by upholding the $1.3 million settlement based on the arbitration award. Jamie Bland is the Paterson Chapter Leader in the National Action Network. She stated that Mr. Graddy is a pillar of the community and has complied with all of NJ TRANSIT’s requests. She requested the Board to honor the settlement terms. Salaam Ismial is an advisor with the National Action Network and Director of the United Youth Council, Inc., which is located in 22 cities in New Jersey and in eight states nationwide. He provided a December 12, 2016 letter from the National Action Network and a letter from Councilwoman Gloria Taylor supporting Mr. Graddy’s claim. He stated

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that he was last at the Board in 2010 regarding fare increases. Mr. Ismial stated that Mr. Graddy is an icon in the tristate area and that the National Action Network will expand its support for Mr. Graddy. He urged the Board to right the wrong done to him. James Harris is the former President of the New Jersey Conference of the NAACP during which tenure he became aware of the issue between Mr. Graddy and NJ TRANSIT. He stated that he had examined the file and cannot understand why Mr. Graddy has not been paid. Mr. Harris commented on the lack of diversity on the Board and Executive Management. He said Mr. Graddy is a successful businessman and that the record should be examined. He asked whether the Board had the record in front of them. Vice Chairman Meisel stated that the Board did not have the entire record in front of them at that moment. Mr. Harris urged the Board to examine the record. Mr. Harris stated that Mr. Graddy’s business was removed and not replaced by someone of African-American ancestry. He questioned the opportunities for African-Americans to do business with NJ TRANSIT and again urged the Board to look at the record and make a settlement. He stated that they would be back to monitor. Mr. Matthews stated that Michael Lihvarcik has the file and that Mr. Matthews has been in communication with both Mr. Lihvarcik and Jeff Nadell in writing and by telephone. Michael Jackson is Councilman representing the First Ward in Paterson. Mr. Jackson said he was a new councilman and acknowledged that the opportunities he has been accorded were because of the hard work of people like Mr. Graddy over the years. Mr. Graddy accomplished much when the playing field was not level. He stated that for a businessman such as Mr. Graddy to be railroaded and bulldozered by a public agency was disappointing. Mr. Jackson has been critical of treatment of Paterson by NJ TRANSIT, stating the landscaping, property, and facilities were less than other areas. So he was not surprised by the treatment of Mr. Graddy, but he was disappointed. Mr. Jackson stated the accomplishments and contributions need to be acknowledged and recognized. Mr. Graddy has done all that was asked of him, his legal right to be there. Mr. Jackson urged the Board to be considerate and do the right thing. He stated that urban communities lend support to transit infrastructure. Mr. Jackson stated that he extends his full support to Mr. Graddy. He stated that he will be back with other elected officials and asked that Mr. Graddy be treated justly and given what he was entitled to. Bettye Peterson is a retired teacher. She has known Mr. Graddy more than 50 years from the time he was a businessman in Paterson before moving to Atlantic City. She stated that Mr. Graddy moved back to Paterson and now has a restaurant there with many community members dependent on him. She said that he gave pre-dinner in the backyard of his restaurant, providing free food to 500 people. She asked NJ TRANSIT to please do right by him and said he deserves it.

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Lisa Thompson stated it was an honor and privilege to be there for Mr. Graddy, her friend, mentor, and a trailblazer. She said Mr. Graddy supports entrepreneurs and people of all colors. Ms. Thompson urged the Board to do the right thing. Earnest Rucker was speaking on behalf of Paterson Council President Bill McKoy and as a founder of Save the Village of Paterson. Mr. Rucker stated that the issue has been around since 2004 and was a total injustice. He urged the Board to review files, do the right thing, and restore fairness in the State of New Jersey. Mr. Rucker said NJ TRANSIT has history in Paterson that was not too good, with regards to treatment of people in Paterson. He stated that if he invests in the state he would expect a return, not to make an agreement and then change the game. Mr. Rucker urged the Board to right the wrong and let New Jersey be a pioneer in fairness. He stated that Mr. Graddy was not begging; only asking for what was his. Mr. Rucker stated other speakers talked about Mr. Graddy’s generosity. He told the Board that he would not be at the podium today if not for the training of Mr. Graddy. He again urged the Board to do the right thing. Tony Mack is a businessman in Atlantic City and has owned McDonald’s franchises for 30 years and is a personal friend of Russell Graddy. In the past 30 years the two of them were the only African-Americans to run major businesses in Atlantic City. Mr. Mack reiterated the issue regarding the restaurant Mr. Graddy operated in the Atlantic City Bus Terminal and said that, to this day, he cannot understand how it happened. Mr. Matthews stated that they had recently been called twice by NJ TRANSIT: once to return the $14,000 security deposit made 13 years ago and once to discuss potential opportunities. He stated again that this Board cannot be blamed but can right the wrong. Russell Graddy thanked the Board for the opportunity to speak. He stated that his was an old case, even in 2007 when he appeared before NJ TRANSIT’s Board the first time. At that time, he asked the Board to investigate his matter. Mr. Graddy stated that when NJ TRANSIT was going to construct a new bus station the agency approached him to put in a new restaurant. He said that the agreement gave him 20 years to recoup his $1 million investment and make a profit. After seven years, NJ TRANSIT decided to build a new bus station and he was told that he had the right to move to the new facility. Then, NJ TRANSIT asked him to move out and put his equipment in storage, advising that it would be reinstalled when the facility was finished. So, in 2004 he moved out and turned over the keys. Mr. Graddy said NJ TRANSIT reneged on the deal. Outfitting the restaurant was $1 million and paid for by him with the understanding he would have 20 years to recoup his investment. He said he had 13 years left on his lease. The 2004 decision was devastating. He moved out thinking he would be back in business in 120 days. Mr. Graddy stated that he was in business 44 years between Atlantic City and Paterson. He said he was three years from retiring and was denied the right to continue business. Mr. Graddy had to sell assets and still owed $200,000 to the State when he was locked out. He said that what happened was unconscionable. Mr. Graddy requested that the

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Board look at the record. He said NJ TRANSIT didn’t want him there and he had taken the agency to court two other times and won. The third time he was railroaded. Mr. Graddy stated that he was asking for justice and was only asking for what was his. Mr. Matthews stated for record that they were asking that this Board reconsider the arbitrator’s award granted in 2006 and signed off by NJ TRANSIT’s and Mr. Graddy’s attorneys. He asked that this Board review the file and reverse a gross injustice. Mr. Matthews concluded by thanking the Board for allowing them to speak. Vice Chairman Meisel Remarks Vice Chairman Meisel said a few words, mainly directed to the NJ TRANSIT family. He said it was his final meeting as Vice Chairman and a member of the Board of Directors. Vice Chairman Meisel thanked the Governor for appointing him and said it was an honor to serve on an incredible board. Vice Chairman Meisel discussed how being on the Board gave him the opportunity to view things from 10 feet or 10,000 feet. He noted how that day they had the opportunity to see where the rubber meets the road and said it was a great honor see how NJ TRANSIT affects people’s lives such as in Monmouth County and with Mr. Graddy. Vice Chairman Meisel said during his years on NJ TRANSIT’s Board, he has had the opportunity to be impressed everyday by the complexity of what NJ TRANSIT does on a daily basis. He noted it was almost unimaginable how NJ TRANSIT provides service to one million people every day, who rely on NJ TRANSIT to get them to and from their destinations in a safe and efficient manner. Vice Chairman Meisel said they often hear about the times when NJ TRANSIT fails, but those are minor as a percentage of times it succeeds. During his first couple months on NJ TRANSIT’s Board, he toured the Kearny facility and spoke to many NJ TRANSIT employees. He was struck by the complexity and incredible dedication NJ TRANSIT men and women do to maintain the equipment. Vice Chairman Meisel noted it was not a glamorous, pretty job and involves lots of grease and not fancy desks. He noted how all the employees took pride in what they do on a daily basis. Vice Chairman Meisel said he was consistently struck in his five and a half years by the incredible dedication of the people in the NJ TRANSIT community. Vice Chairman Meisel noted the challenges providing services using a complex, faulty structure. He noted there was no dedicated funding and the challenges of running a business when every year at budget time, they did not know how much money would be received from the Legislature and Executive Branch. Vice Chairman Meisel believes a funding arrangement for NJ TRANSIT, dedicated or otherwise, needs to become more reliable. He said if NJ TRANSIT knows the facts, they can be prepared for them and it was amazing they were able to function because revenue was totally unpredictable every 12 months.

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Vice Chairman Meisel noted NJ TRANSIT serves disabled, elderly, and business people and from an economic perspective, NJ TRANSIT is the financial lifeblood of the State. He questioned where places like Summit, New Jersey would be without NJ TRANSIT and what would happen to property values in Summit, Montclair, and other places in New Jersey. He noted people take NJ TRANSIT for granted. Vice Chairman Meisel regretted announcing his resignation. He said it has been an incredible learning experience and he hopes he was able to share some of his background and knowledge with NJ TRANSIT. Vice Chairman Meisel noted the Capital Planning, Policy, and Privatization Committee was a very complicated and important committee and he believes it has been run a little differently since he has been there and he hopes it continues. Vice Chairman Meisel thanked Chairman Hammer and every Board Member with whom he served. He noted one wonderful thing about public service was the incredible people he had the honor to work with and noted Board Members Finkle and Castillo. Vice Chairman Meisel was glad they went on the tour of Monmouth County and suggested more like that should be done with fellow Board Members. He noted how committed each was and how they all turned off their phones during the tour, when they had other important businesses they were involved in. Vice Chairman Meisel said it was a pleasure to work with Executive Director Santoro, Dennis Martin, Jeff Nadell, Warren Hersh, and Paul Wyckoff. He noted they were amazing to interface with and made everything easy when it could be hard, including the tour of Monmouth County. Vice Chairman Meisel thanked Board Secretary Zuczek. He noted whenever he emailed her, whether a Saturday at midnight during Sandy, she was responsive and the public had no idea what she does to keep the Board completely informed. Executive Session Authorization At approximately 11:42 a.m., Chairman Hammer requested a motion to enter Executive Session to discuss personnel matters, contract negotiations, the status of pending and anticipated litigation and matters falling within the attorney-client privilege, including, but not limited to, the Personal Injury Claim of Diana Anderson. Board Member James C. Finkle Jr. moved the resolution, Board Member Flora M. Castillo seconded it, and it was unanimously adopted. Board Secretary Zuczek conducted a Roll Call as Board Members returned to Open Session. All Board Members, except Board Member Greaves, returned to open session at approximately 12:34 p.m.

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1612-69: PERSONAL INJURY CLAIM OF DIANA ANDERSON Executive Director Santoro introduced Michael Lihvarcik, Chief Financial Officer & Treasurer, who presented Action Item #1612-69 for approval. Michael Lihvarcik recommended approval of Item #1612-69, Personal Injury Claim of Diana Anderson. Approval was requested to settle the claim of Diana Anderson, through her attorney, at an amount discussed in executive session. The Attorney General has approved the proposed settlement, subject to the availability of funds. Board Member Flora M. Castillo moved the resolution, Board Member James C. Finkle Jr. seconded it, and it was unanimously adopted.

Roll Call Vote:

Hammer Meisel LeBoeuf Petrecca Castillo Finkle Greaves Yes Yes Yes Yes Yes Yes Absent

(Non-Voting Member) Chairman Hammer acknowledged Vice Chairman Meisel’s strong service to the Board and the organization. He said Vice Chairman’s Meisel’s commitment, dedication, and passion for transit was seen and felt every day. He wished him nothing but the best and said he enjoyed sitting on the Board together. Chairman read and presented a resolution to Vice Chairman Meisel and the Board took a picture together. Board Member Castillo thanked Vice Chairman Meisel. She appreciated his collaboration, advocacy, and leadership amongst his colleagues. Board Member Castillo enjoyed working with him and thanked him for his due diligence and insights he shared with staff and the committees. Board Member Finkle said he and Vice Chairman Meisel were appointed to the Board at the same time, and survived a couple Executive Directors and Chairmen. He noted Vice Chairman Meisel was consistent, and he valued his perspective. Board Member Finkle said Vice Chairman Meisel would be sorely missed in this capacity and he knows they will still be in touch. Vice Chairman Meisel thanked everybody. Board Member Castillo said she has been on the Board since 1999, and at almost every meeting she looked directly across and saw Dan O’Connell in the same chair. She wished him a happy retirement. Board Member Castillo said she appreciated the insights he shared at the podium. He was consistent and approachable, and she appreciated his advocacy on behalf of his members.

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Board Member Castillo said Vice Chairman Meisel talked about dedication and pride, and Janice Pepper represents the best of NJ TRANSIT. She wanted to publicly recognize all Janice Pepper has done. As Chair of the Customer Service Committee dealing with the Survey, she has worked with Ms. Pepper. Board Member Castillo said Ms. Pepper was a diligent advocate completing the Survey and understands what it means to be part of a team. After 25 years at NJ TRANSIT, it is NJ TRANSIT’s loss to see Janice Pepper leave and MTA’s gain. Board Member Castillo personally thanked Janice Pepper for her service at NJ TRANSIT. Adjournment Since there were no further comments or business, Chairman Hammer called for adjournment and a motion to adjourn was made by Vice Chairman Bruce M. Meisel, seconded by Board Member James C. Finkle Jr., and unanimously adopted. The meeting was adjourned at approximately 12:42 p.m.

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NEW JERSEY TRANSIT CORPORATION NJ TRANSIT BUS OPERATIONS, INC. NJ TRANSIT RAIL OPERATIONS, INC.

NJ TRANSIT MERCER, INC. NJ TRANSIT MORRIS, INC.

REGULARLY SCHEDULED BOARD OF DIRECTORS’ MEETINGS

DECEMBER 14, 2016

MINUTES PAGE

CALL TO ORDER

SAFETY ANNOUNCEMENT

PLEDGE OF ALLEGIANCE TO THE FLAG

- -

-

APPROVAL OF MINUTES OF PREVIOUS MEETINGS 50180

PUBLIC COMMENTS ON AGENDA ITEMS AND OTHER MATTERS - ADVISORY COMMITTEE REPORT

-

SENIOR CITIZEN AND DISABLED RESIDENT TRANSPORTATION ADVISORY COMMITTEE REPORT (NEXT SCHEDULED REPORT JANUARY 2017)

-

BOARD COMMITTEE REPORTS *Customer Service Committee *Administration Committee *Capital Planning, Policy, and Privatization Committee EXECUTIVE DIRECTOR’S MONTHLY REPORT

- 50181

ACTION ITEMS 1612-67

INTERAGENCY CAPITAL AGREEMENT WITH AMTRAK Authorization to negotiate and enter into an Agreement with Amtrak setting forth the terms and conditions providing for and compensating Amtrak for maintenance of railroad facilities on the Northeast Corridor, which Agreement is retroactive to October 1, 2015, the date of the executed Northeast Corridor Commuter and Intercity Rail Cost Allocation Policy, as required under the Passenger Rail Investment and Improvement Act of 2008.

50213

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NEW JERSEY TRANSIT CORPORATION NJ TRANSIT BUS OPERATIONS, INC. NJ TRANSIT RAIL OPERATIONS, INC. NJ TRANSIT MERCER, INC. NJ TRANSIT MORRIS, INC. REGULARLY SCHEDULED BOARD OF DIRECTORS’ MEETINGS DECEMBER 14, 2016 MINUTES PAGE 2

1612-68

REFINANCING OF OUTSTANDING STATE OF NEW JERSEY CERTIFICATES OF PARTICIPATION, NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (“NJEDA”) TRANSPORTATION PROJECT SUBLEASE REVENUE REFUNDING BONDS (NEW JERSEY TRANSIT CORPORATION LIGHT RAIL TRANSIT SYSTEM PROJECT) 2008 SERIES A AND NEW JERSEY TRANSIT CORPORATION GRANT ANTICIPATION NOTES, SERIES 2014A (FEDERAL TRANSIT ADMINISTRATION SECTION 5307 URBANIZED AREA FORMULA FUNDS), AND NEW MONEY FINANCING, IF ANY, VIA THE ISSUANCE OF NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY TRANSPORTATION PROJECT SUBLEASE REVENUE AND REVENUE REFUNDING BONDS AND AUTHORIZING THE EXECUTION AND DELIVERY OF A LEASE AGREEMENT AND SUBLEASE AGREEMENT WITH THE NJEDA AND ENTRY INTO A FUNDING AGREEMENT, EACH IN CONNECTION WITH THE ISSUANCE OF NJEDA TRANSPORTATION PROJECT SUBLEASE REVENUE AND REVENUE REFUNDING BONDS Authorization for NJ TRANSIT to adopt the attached Resolution: 1. The Board hereby approves the refunding of the COPs, the 2008 NJEDA Bonds and the 2014 NJ TRANSIT Notes and issuance of the new money portion, if any, via the issuance of the Bonds, and authorizes the execution and delivery of the Lease Financing Documents and the Funding Agreement by an Authorized Officer (as defined below), provided that the term of the Bonds shall not exceed thirty (30) years and the maximum par amount of the new money portion of the Bonds shall be in an amount sufficient to produce approximately $60 million for capital projects; 2. The Corporation hereby authorizes an Authorized Officer to execute and deliver the Lease Financing Documents, the Funding Agreement and such other documents, instruments, agreements and papers and to do such acts and things as may be necessary or advisable to effectuate the transaction, with such changes, insertions and omissions as shall be approved by an Authorized Officer of the Authority, with the advice of the State Attorney General; 3. The Corporation hereby authorizes the payment of any costs incurred in connection with the issuance of the Bonds that are not paid for from the proceeds of such Bonds; 4. For the purposes of this Resolution an “Authorized Officer” shall mean the Chairman, Vice Chairman, Treasurer, Secretary, Executive Director or Chief Financial Officer of the Corporation and shall also mean any other person who shall be authorized by resolution of the Corporation to perform such act or to execute such document or any other person or persons who shall be authorized to act on behalf of the Corporation by the Chairman or Executive Director of the Corporation which certificate shall set forth such authorization and shall contain the specimen signatures of each such person; and 5. This resolution shall become effective 10 days after a copy of the minutes of the Corporation meeting at which this resolution was adopted has been delivered to the Governor for his approval, unless during such 10 days the Governor shall approve the same, in which case this resolution shall become effective upon such approval, as provided in the Act.

50221

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NEW JERSEY TRANSIT CORPORATION NJ TRANSIT BUS OPERATIONS, INC. NJ TRANSIT RAIL OPERATIONS, INC. NJ TRANSIT MERCER, INC. NJ TRANSIT MORRIS, INC. REGULARLY SCHEDULED BOARD OF DIRECTORS’ MEETINGS DECEMBER 14, 2016 MINUTES PAGE 3

EXECUTIVE SESSION AUTHORIZATION: Discuss personnel matters, contract negotiations, the status of pending and anticipated litigation and matters falling within the attorney-client privilege, including, but not limited to, the Personal Injury Claim of Diana Anderson.

50227

1612-69

PERSONAL INJURY CLAIM OF DIANA ANDERSON Authorization to settle the claim of Diana Anderson through her attorney, at an amount discussed in executive session. The Attorney General has approved the proposed settlement, subject to the availability of funds.

50228

ADJOURNMENT

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APPROVAL OF MINUTES

WHEREAS, the By-Laws provide that the minutes of

actions taken at meetings of the New Jersey Transit Corporation, NJ TRANSIT Rail Operations, Inc., NJ TRANSIT Bus Operations, Inc., NJ TRANSIT Mercer, Inc., and NJ TRANSIT Morris, Inc. Board of Directors be approved by the Board; and

WHEREAS, pursuant to Section 4(f) of the New

Jersey Public Transportation Act of 1979, the minutes of actions taken at the November 9, 2016 and the November 18, 2016 Board Meetings of the New Jersey Transit Corporation, NJ TRANSIT Bus Operations, Inc., NJ TRANSIT Rail Operations, Inc., NJ TRANSIT Mercer, Inc., and NJ TRANSIT Morris, Inc. were forwarded to the Governor on November 15, 2016 and November 22, 2016, respectively;

NOW, THEREFORE, BE IT RESOLVED that the minutes of actions taken at the November 9, 2016 and the November 18, 2016 New Jersey Transit Corporation, NJ TRANSIT Rail Operations, Inc., NJ TRANSIT Bus Operations, Inc., NJ TRANSIT Mercer, Inc., and NJ TRANSIT Morris, Inc. Board of Directors' meetings are hereby approved.

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NJ TRANSIT Customer Satisfaction Survey Results – 1st Quarter FY17 Research December 2016

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2Research

1st Quarter FY17

System-wide Customer Satisfaction Survey– Bus, Rail, Light Rail & Access Link

Administered online September 15th – October 2nd, 2016 in English and Spanish Extensive campaign to boost response rates in

targeted markets Customer Satisfaction on 42 attributes of service Customers selected the three most important

attributes of service

Methodology

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3Research

1st Quarter FY17 Response Rates

* Source: Market Analysis and Pricing Department.

NJTService

Quarter 1 – FY16Field Period: 9/10/15-10/1/15

Quarter 4 – FY16Field Period: 5/16/16-6/6/16

Quarter 1 – FY17Field Period: 9/15/16-10/2/16

Ridership* Responses Response Rate Ridership* Responses Response

Rate Ridership* Responses Response Rate

Bus 280,275 8,924 3.2% 257,850 8,346 3.2% 271,400 10,787 4.0%

Rail 146,600 15,342 10.5% 140,750 17,471 12.4% 145,975 17,677 12.1%

Light Rail 39,550 840 2.1% 39,475 1,210 3.1% 41,575 1,005 2.4%

Access Link 4,538 343 7.6% 4,715 423 9.0% 4,765 315 6.6%

Total 470,963 25,449 5.4% 442,790 27,450 6.2% 463,715 29,784 6.4%

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4Research

1st Quarter FY17

5.2 5.3 5.15.8 6.0 6.0 6.4 6.1 6.4 6.1 5.8 6.1 6.1 6.2 6.2 6.2 6.1 6.2 6.2 6.3 6.4

0

1

2

3

4

5

6

7

8

9

10

BaselineQ1 Q2 Q3 Q4 Q1 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

System Scores*

* Q2FY13 was not administered due to Super Storm Sandy

2012 2013 2014 2015 2016 2017

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5Research

1st Quarter FY17 Scores by Service

5.5

4.5

6.5

7.5

6.35.6

7.27.8

6.4 6.16.8

8.0

6.56.1

7.07.7

0123456789

10

Bus Rail Light Rail Access Link

Baseline Q1FY16 Q4FY16 Q1FY17

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6Research

1st Quarter FY17Likelihood to Recommend NJT To a Friend or Relative

67%

13%20%

75%

10%15%

77%

10%13%

78%

10% 12%

0%

20%

40%

60%

80%

100%

Very or SomewhatLikely

Do Not Know Very or SomewhatUnlikely

Baseline Q1FY16 Q4FY16 Q1FY17

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7Research

1st Quarter FY17

Key Drivers to ImproveAcross the System

A key driver in Quarter 4 FY16 and in Quarter 1 FY17+ A key driver in Quarter 1 FY17, but not in Quarter 4 FY16- A key driver in Quarter 4 FY16, but not in Quarter 1 FY17

Key Drivers to Improve Bus Rail Light Rail

Access Link

On-time Performance

Fares -Mechanical Reliability -

Seating Availability Safety

Security Weekday PM Peak Schedule

Weekday Evening/Night Schedule

Weekend/Holiday Schedule

Overall Trip Time

Comfort On-board + -Cleanliness On-board +

Reservationists Scheduling

Customer Service

50208(NJT Board - 12/14/2016)

8Research

1st Quarter FY17

52%

68%

60%

26%

82%89%

82%

48%

89%95%

90%

57%

93%97%

94%

70%

0%

20%

40%

60%

80%

100%

Bus Rail Light Rail Access LinkQ1FY12 Q3FY14 Q1FY16 Q1FY17

Note that 99% of customers completing the Q1FY17 survey indicated owning a cell phone.

Smartphone Growth

50209(NJT Board - 12/14/2016)

9Research

1st Quarter FY17NJ TRANSIT’s App Users(Among those who have the Application)

69%

44%

22%

36%

20%

60%

21%

13%

64%

21%

81%

70%

34%

4%

18%

67%

52%

13%17% 19%

0%

20%

40%

60%

80%

100%

MyTix Train Schedules DepartureVision MyBus Trip Planner

System Bus Rail Light Rail

System-wide 69% of customers have loaded the app on their phone and use one or more features of the app.The Police feature of the NJ TRANSIT App is used by one percent of customers.

50210(NJT Board - 12/14/2016)

10Research

1st Quarter FY17

Overall Customer Satisfaction Score of 6.4 Nearly 8 in 10 (78%) of customers would recommend NJ TRANSIT Second highest response rate (6.4%) achieved since the inception

of the survey in 2011; Second highest number of responses (29,784)

Key Drivers customers want improved in Q1FY17:-Bus: On-time Performance, Fares and Weekday PM Peak Schedule -Rail: Fares -Light Rail: Seating Availability, Safety, Fares, Cleanliness On-board, Security and Comfort On-board -Access Link: On-time Performance, Scheduling, Trip Time and Reservationists

Q2FY17 survey administration: November 21, 2016 – December 9, 2016

Conclusions

50211(NJT Board - 12/14/2016)

ACTION ITEMS

50212(NJT Board - 12/14/2016)

ITEM 1612-67: INTERAGENCY CAPITAL AGREEMENT WITH AMTRAK BENEFITS In 2008, Congress enacted the Passenger Rail Investment and Improvement Act, 49 U.S.C. 24905 (PRIIA), which, in part, altered the allocation of operating and capital costs between Amtrak and the commuter authorities on the Northeast Corridor (NEC). PRIIA Section 212 directed the Secretary of Transportation to establish the Northeast Corridor Infrastructure and Operations Advisory Commission and charged the Commission to develop a standardized methodology for allocating costs, revenues and compensation for Northeast Corridor commuter rail transportation. It required Amtrak and public authorities providing commuter rail service to implement new agreements for capital improvements on the NEC based on the new standardized formula. NJ TRANSIT, seven other NEC states and the District of Columbia, the USDOT and Amtrak are members of the Commission. In September 2015, the Commission developed and adopted the Northeast Corridor Commuter and Intercity Rail Cost Allocation Policy (Policy), effective October 1, 2015, which sets forth a standardized methodology for determining and allocating costs, revenues, and compensation between Amtrak and commuter authorities, such as NJ TRANSIT, for the use of the NEC and its facilities. The Policy requires Amtrak and NJ TRANSIT to modify existing or implement new bi-lateral agreements for the usage of facilities, services, and capital improvements based on the Policy’s new methodology. Amtrak and NJ TRANSIT agree that cooperation and coordination of their efforts in the planning of their respective services on the NEC and the implementation of the Policy are essential to return the NEC to a state-of-good-repair and expand capacity to accommodate planned future service levels and projected ridership along the NEC. In October 2016, Amtrak and NJ TRANSIT executed the Amended and Restated Northeast Corridor Services Agreement, effective October 1, 2015, outlining the operating obligations of both parties on the NEC. This new bi-lateral capital agreement will supersede the existing Amtrak/ NJ TRANSIT Joint Benefit Agreement and will reflect the cost allocation methods for Amtrak’s maintenance of railroad facilities along the NEC as set forth in the Policy. ACTION (Safety and Security, Corporate Accountability, Financial Performance) Staff seeks NJ TRANSIT Board of Directors’ authorization to negotiate and enter into an Agreement with Amtrak setting forth the terms and conditions providing for and compensating Amtrak for maintenance of railroad facilities on the Northeast Corridor, which Agreement is retroactive to October 1, 2015, the date of the executed Northeast Corridor Commuter and Intercity Rail Cost Allocation Policy, as required under the Passenger Rail Investment and Improvement Act of 2008.

50213(NJT Board - 12/14/2016)

PURPOSE Authorization to negotiate and enter into this Agreement as required by PRIIA (Capital Bi-Lateral Agreement) will allow NJ TRANSIT to preserve existing capacity and functionality on the NEC and upgrade the NEC and its infrastructure to provide improved performance and greater service reliability. To this end, the Capital Bi-Lateral Agreement will provide the framework for NJ TRANSIT to compensate Amtrak for the provision of maintenance of the rail facilities on the NEC due to NJ TRANSIT’s operations. BACKGROUND The Northeast Corridor The Northeast Corridor is comprised of existing rail lines that were built separately in the 19th Century. By the turn of the 20th Century, the rail lines along the NEC were under the control of the New York, New Haven & Hartford Railroad north of New York City and the Pennsylvania Railroad south of New York City. Pennsylvania Railroad trains terminated in Jersey City while the New York, New Haven & Hartford Railroad terminated at the New York Central Railroad's Grand Central Terminal in New York City. The Pennsylvania Railroad purchased a controlling interest in the Long Island Rail Road in 1900, which provided access to New York. The construction of New York Pennsylvania Station (Penn Station), completed in 1910, linked the Pennsylvania Railroad and the Long Island Rail Road. New York City banned steam locomotives in Manhattan in 1902. The Pennsylvania Railroad and the New York Central Railroad electrified their approaches into their Manhattan stations with third rail electrification. The New York, New Haven & Hartford Railroad electrified its line to New Haven with overhead wire in 1914 and to Penn Station by 1918. The Pennsylvania Railroad began installing its overhead wires from Philadelphia to Wilmington in 1928 and north to Trenton in 1930. Overhead wires were installed between Penn Station and New Brunswick by 1932, and the Trenton to New Brunswick section was electrified the following year. By 1935, the NEC between Trenton and Washington, D.C. was electrified. Electrification of the NEC north of New Haven to Providence and Boston was completed by Amtrak by December 2000 with the introduction of Acela Express service. With the construction of the Interstate Highway System the primary mode of travel shifted from train to automobile. Railroads, especially those in the Northeast, lost ridership and struggled to remain viable. The Pennsylvania Railroad and the New York Central Railroad merged in 1968 to form Penn Central which later included the New York, New Haven & Hartford Railroad. In 1970, the Penn Central declared bankruptcy. To preserve intercity passenger service, Congress enacted the Rail Passenger Service Act of 1970, which created the National Railroad Passenger Corporation (Amtrak). Amtrak assumed the responsibility for intercity passenger service from private railroads

50214(NJT Board - 12/14/2016)

and received access rights to their tracks. The Federal Government formed Conrail in 1976 to consolidate the freight railroad network in the Northeast. Included with the formation of Conrail was a provision that allowed Amtrak to purchase the Northeast Corridor with the exception of the portions owned by New York, Connecticut, and Massachusetts. Conrail also inherited the commuter rail operations of its predecessor railroads in New Jersey and operated them until 1983 when these services were transferred to NJ TRANSIT. NJ TRANSIT was created by the Public Transportation Act of 1979 to "acquire, operate and contract for transportation service in the public interest." On January 1, 1983, NJ TRANSIT Rail Operations, Inc. was launched to assume Conrail’s commuter rail operations in the New Jersey after Congress authorized Conrail to cease its passenger operations. NJ TRANSIT currently operates commuter rail service on 12 rail lines statewide, including operation of commuter rail on the NEC within New Jersey, to New York Penn Station and to its rail yard in Morrisville, Pennsylvania. Amtrak’s Northeast Corridor Improvement Project in the 1980s allowed for a major overhaul and improvement of the system between Washington, D.C. and Boston, which included safety improvements, modernization of the signaling system, and new control centers at Philadelphia, New York and Boston. It allowed trains to operate at higher speeds with reduced headways and set the stage for high-speed operation. In the 1990s, New Jersey developed a strategic business plan to improve NEC rail operations. NJ TRANSIT’s New Initiatives Program in the 1990s increased rail capacity by providing significant capital investment on the NEC including construction of the Secaucus Transfer Station, the Seventh Avenue Concourse in Penn Station New York, the Kearny Connection (Midtown Direct Service), NEC Power Improvements, NEC Signal Improvements, and Penn Station X Track Modifications. Since 1983, Amtrak and NJ TRANSIT have managed rail operations on the NEC pursuant to the Northeast Corridor Services Agreement (NECSA) as well as approximately 30 separate agreements covering operation, maintenance and dispatch of the NEC. In addition to commuter operating rights granted by Conrail the NECSA granted trackage rights to NJ TRANSIT over the NEC and described the terms and

50215(NJT Board - 12/14/2016)

conditions for the provision of and compensation for NJ TRANSIT’s operations on the NEC. In addition, NJ TRANSIT and Amtrak are parties to the Joint Benefits Capital Agreement that will be superseded by this NJ TRANSIT/Amtrak Capital Agreement. Passenger Rail Investment and Improvement Act of 2008 The Passenger Rail Investment and Improvement Act of 2008 (PRIIA) reauthorized Amtrak and strengthens the U.S. passenger rail network by tasking Amtrak, the U.S. Department of Transportation (USDOT), the FRA, States, and other stakeholders in improving service, operations, and facilities. PRIIA focuses on intercity passenger rail, including Amtrak’s long-distance routes and the NEC, state-sponsored corridors throughout the United States, and the development of high-speed rail corridors. PRIIA authorizes funding for Amtrak’s capital and operating needs to maintain current operations, upgrade equipment, and return the NEC to a state-of-good-repair. PRIIA also directed the Secretary of Transportation to establish the Northeast Corridor Infrastructure and Operations Advisory Commission to promote mutual cooperation among NEC users and to plan and advise Congress on a policy that sets forth a standardized allocated cost model. The Fixing America's Surface Transportation (FAST) Act, signed into law on December 4, 2015, continues the direction established by PRIIA and strengthens some provisions. Northeast Corridor Infrastructure and Operations Advisory Commission Congress established the Northeast Corridor Infrastructure and Operations Advisory Commission to develop coordinated strategies for improving the Northeast’s core rail network in recognition of the inherent challenges of planning, financing, and implementing major infrastructure improvements that cross multiple jurisdictions. The expectation is that by coming together to take collective responsibility for the NEC, these disparate stakeholders will achieve a level of success that far exceeds the potential reach of any individual organization. The Commission is governed by a board comprised of one member from each of the NEC states (Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware, and Maryland) and the District of Columbia; four members from Amtrak; and five members from the USDOT. The Commission also includes non-voting representatives from four freight railroads (Providence & Worcester, Norfolk Southern, CSX Transportation, and Conrail), states with connecting corridors (Maine, New Hampshire, Vermont, Virginia, and North Carolina) and several commuter operators in the Region (Massachusetts Bay Transportation Authority, New York Metropolitan Transportation Authority, and Southeastern Pennsylvania Transportation Authority). Payments to Amtrak for Capital Costs The Northeast Corridor Commission (NECC) calculates NJ TRANSIT’s annual capital obligation prior to each Federal fiscal year. NJ TRANSIT’s capital obligation will be divided by 12 and pre-paid to Amtrak on a monthly basis. At the end of the Federal

50216(NJT Board - 12/14/2016)

fiscal year, Amtrak will provide NJ TRANSIT with an accounting of the actual funds it expended for rail maintenance and improvements in NJ TRANSIT’s operating territory compared to the funds it received from NJ TRANSIT. Any remaining funds will be either credited back to NJ TRANSIT or re-programmed to other rail maintenance or improvements in NJ TRANSIT’s operating territory. Capital charges under the Capital Agreement for fiscal years 2016-2021 are determined pursuant to the Policy and calculated by the NECC based on the following formula. Amtrak provides the NECC with source data and a state-of-good repair assessment for each asset (i.e. ties, catenary, poles, signal houses, etc.) along the portions of the Northeast Corridor it owns. The number of assets in each category is divided by the average useful life of those assets, resulting in the average number of assets to be replaced each year. The annual replacement number is then multiplied by the average unit replacement cost for those assets, resulting in an amount known as “Normalized Replacement” for that asset category. The Normalized Replacement amount for each asset category is allocated to each operator using the Northeast Corridor using the same metrics used to allocate operating costs. The allocated amounts for each asset category are added together, resulting in the total Normalized Replacement amount. Each commuter agency is required to pay a percentage of the Normalized Replacement (NR) amount, based on its use of the Northeast Corridor, known as the Baseline Capital Contribution (BCC) amount. Recognizing the need to “ramp up” funding, the Policy calls for BCCs to be set at 80% of the NR amount through Federal FY 2018. Thereafter, the BCCs will be 100% of the NR amount. This item has been reviewed and recommended by the Board Capital Planning, Policy and Privatization Committee. FISCAL IMPACT Requested Authorization: Authorization to enter into an Agreement for Capital

Obligations under the Passenger Rail Investment and Improvement Act of 2008 with Amtrak (Capital Bi-Lateral Agreement)

Previous Authorizations: None Expenditures to Date: NA Total Project Cost: NA Projected Date of Completion: 5-year Term Capital Program Amount: Federal Fiscal Year 2016 $ 83,780,000 Federal Fiscal Year 2017 $ 85,210,000 Federal Fiscal Year 2018 $ 85,210,000 (estimated) Federal Fiscal Year 2019 $ 106,510,000 (estimated)

50217(NJT Board - 12/14/2016)

Federal Fiscal Year 2020 $ 106,510,000 (estimated) Total $ 467,230,000 (estimated) State FY 16 $ 62,840,000 (9 months of Fed FY16 Obligation) State FY17 $ 84,850,000 State FY18 $ 85,210,000 (estimated) State FY19 $ 101,190,000 (estimated) State FY20 $ 106,510,000 (estimated) Total $ 440,600,000 (estimated)

Operating Budget Amount: None Anticipated Source of Funds: Capital PRINTS ID Number: NJT01152 FY16 – FY 20 NJT01152 FY21 DBE/SBE Goal: NA NJ Build Amount: NA Future Related Authorizations: TBD

Impact on Future Operating Budgets: None

50218(NJT Board - 12/14/2016)

RESOLUTION

WHEREAS, Amtrak, a corporation organized under the Rail Passenger Service Act and the laws of the District of Columbia, owns the Northeast Corridor (NEC) rail line within the State of New Jersey; and WHEREAS, NJ TRANSIT is an instrumentality of the State of New Jersey and is authorized to operate rail passenger service in New Jersey and between points in New Jersey and points in other states pursuant to the New Jersey Public Transportation Act of 1979, as amended; and WHEREAS, NJ TRANSIT operates commuter trains over portions of the NEC pursuant to the Railroad Reorganization Act of 1973, the Railroad Revitalization and Reform Act of 1976, the Rail Passenger Services Act and the Northeast Rail Service Act of 1981; and WHEREAS, in 2008, Congress altered the allocation of operating and capital costs between Amtrak and the commuter authorities for shared assets on the NEC, and directed the Secretary of Transportation in Section 212 of the Passenger Rail Investment and Improvement Act of 2008, 49 U.S.C. 24905, (PRIIA) to establish the Northeast Corridor Infrastructure and Operations Advisory Commission (Commission) and charged the Commission to promote mutual cooperation among NEC users, and to plan and advise Congress on a policy that sets forth a standardized cost allocation; and WHEREAS, the Commission developed and adopted the Northeast Corridor Commuter and Intercity Rail Cost Allocation Policy dated September 17, 2015, which sets forth a standardized methodology for determining and allocating costs, revenues, and compensation between Amtrak and commuter authorities, such as NJ TRANSIT, for the use of the NEC and its facilities; and WHEREAS, both PRIIA and the Policy require Amtrak and NJ TRANSIT to modify or implement new bi-lateral agreements implementing the cost allocation methodology outlined in the Policy; and

50219(NJT Board - 12/14/2016)

WHEREAS, NJ TRANSIT and Amtrak recognize that increased collaboration and cooperation is required to continue to effectively provide services along the NEC, maintain the NEC’s infrastructure and advance improvements to accommodate projected future demands; and

WHEREAS, pursuant to Section 3(d)(3) of the By-

laws, the Executive Director is authorized to execute agreements with public and private railroads in order to advance and implement NJ TRANSIT’s operating and capital programs;

NOW, THEREFORE, BE IT RESOLVED that the NJ TRANSIT Board of Directors hereby authorizes the Executive Director to negotiate and enter into an Agreement with Amtrak setting forth the terms and conditions providing for and compensating for rail maintenance and improvements on the Northeast Corridor, which Agreement is retroactive to October 1, 2015, the date of the executed Northeast Corridor Commuter and Intercity Rail Cost Allocation Policy, as required under the Passenger Rail Investment and Improvement Act of 2008.

50220(NJT Board - 12/14/2016)

ITEM 1612-68: REFINANCING OF OUTSTANDING STATE OF NEW JERSEY CERTIFICATES OF PARTICIPATION, NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (“NJEDA”) TRANSPORTATION PROJECT SUBLEASE REVENUE REFUNDING BONDS (NEW JERSEY TRANSIT CORPORATION LIGHT RAIL TRANSIT SYSTEM PROJECT) 2008 SERIES A AND NEW JERSEY TRANSIT CORPORATION GRANT ANTICIPATION NOTES, SERIES 2014A (FEDERAL TRANSIT ADMINISTRATION SECTION 5307 URBANIZED AREA FORMULA FUNDS), AND NEW MONEY FINANCING, IF ANY, VIA THE ISSUANCE OF NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY TRANSPORTATION PROJECT SUBLEASE REVENUE AND REVENUE REFUNDING BONDS AND AUTHORIZING THE EXECUTION AND DELIVERY OF A LEASE AGREEMENT AND SUBLEASE AGREEMENT WITH THE NJEDA AND ENTRY INTO A FUNDING AGREEMENT, EACH IN CONNECTION WITH THE ISSUANCE OF NJEDA TRANSPORTATION PROJECT SUBLEASE REVENUE AND REVENUE REFUNDING BONDS

BENEFITS Adoption of this Item and the attached Resolution will allow NJ TRANSIT, in consultation with the Office of the State Treasurer and the Office of the Attorney General, to refinance all or a portion of the 2004A, 2008A and 2009A State of New Jersey Certificates of Participation (“COPs”), the New Jersey Economic Development Authority’s Transportation Project Sublease Revenue Refunding Bonds (New Jersey Transit Corporation Light Rail Transit System Project) 2008 Series A (“2008 NJEDA Bonds”) and the NJ TRANSIT Grant Anticipation Notes, Series 2014A (the “2014 NJ TRANSIT Notes”). The COPs, the 2008 NJEDA Bonds and the 2014 NJ TRANSIT Notes are currently outstanding in the aggregate principal amount of $1,006,730,000. The refinancing is expected to ensure that eligible capital projects are funded from NJ TRANSIT’s annual capital program. The financing will also include a new money component in an amount sufficient to produce approximately $60 million for capital projects. ACTION (Scorecard: Financial Performance) Staff seeks authorization for NJ TRANSIT to adopt the attached Resolution: 1. The Board hereby approves the refunding of the COPs, the 2008 NJEDA Bonds and the 2014 NJ TRANSIT Notes and issuance of the new money portion, if any, via the issuance of the Bonds, and authorizes the execution and delivery of the Lease Financing Documents and the Funding Agreement by an Authorized Officer (as defined below), provided that the term of the Bonds shall not exceed thirty (30) years and the maximum par amount of the new money portion of the Bonds shall be in an amount sufficient to produce approximately $60 million for capital projects; 2. The Corporation hereby authorizes an Authorized Officer to execute and deliver the Lease Financing

50221(NJT Board - 12/14/2016)

Documents, the Funding Agreement and such other documents, instruments, agreements and papers and to do such acts and things as may be necessary or advisable to effectuate the transaction, with such changes, insertions and omissions as shall be approved by an Authorized Officer of the Authority, with the advice of the State Attorney General; 3. The Corporation hereby authorizes the payment of any costs incurred in connection with the issuance of the Bonds that are not paid for from the proceeds of such Bonds; 4. For the purposes of this Resolution an “Authorized Officer” shall mean the Chairman, Vice Chairman, Treasurer, Secretary, Executive Director or Chief Financial Officer of the Corporation and shall also mean any other person who shall be authorized by resolution of the Corporation to perform such act or to execute such document or any other person or persons who shall be authorized to act on behalf of the Corporation by the Chairman or Executive Director of the Corporation which certificate shall set forth such authorization and shall contain the specimen signatures of each such person; and 5. This resolution shall become effective 10 days after a copy of the minutes of the Corporation meeting at which this resolution was adopted has been delivered to the Governor for his approval, unless during such 10 days the Governor shall approve the same, in which case this resolution shall become effective upon such approval, as provided in the Act. PURPOSE The NJEDA intends to issue its Transportation Project Sublease Revenue and Revenue Refunding Bonds (“Bonds”) for the purpose of refunding all or a portion of the outstanding COPs, 2008 NJEDA Bonds and 2014 NJ TRANSIT Notes. The Bonds to be issued by the NJEDA will have a final maturity of not more than thirty (30) years and will be funded with future appropriations from the TTFA. The Bonds will be structured to maximize savings between now and Fiscal Year 2019. The new money component will be issued in an amount sufficient to produce approximately $60 million for capital projects. NJ TRANSIT will enter into a lease agreement, a sublease agreement and any other document necessary to effectuate the issuance of the Bonds (collectively, the “Lease Financing Documents”) pursuant to which it will make lease rental payments in an amount sufficient to pay debt service on the Bonds, and NJ TRANSIT, with the consent of the Commissioner, will enter into a Funding Agreement (the “Funding Agreement”) pursuant to which NJ TRANSIT will pledge a portion of its paygo appropriations to secure its payment obligations under the Lease Financing Documents. All fees are expected to be paid from the proceeds of the Bonds. BACKGROUND Between 2004 and 2009 the State of New Jersey issued approximately $950 million of COPs for the benefit of NJ TRANSIT’s capital program for the purpose of financing the acquisition of bus and rail rolling stock. Repayment of these COPs came in part from the NJ TRANSIT’s pay-as-you-go (“paygo”) appropriations from the Transportation

50222(NJT Board - 12/14/2016)

Trust Fund Authority (“TTFA”) and NJ TRANSIT’s annual operating subsidy. In 2008, the New Jersey Economic Development Authority (“NJEDA”) issued approximately $342 million of the 2008 NJEDA Bonds for the benefit of NJ TRANSIT’s capital program to refinance outstanding obligations issued to finance the South Jersey Light Rail Project. In 2014, NJ TRANSIT issued its $381,790,000 New Jersey Transit Corporation Grant Anticipation Notes, Series 2014A (Federal Transit Administration Section 5307 Urbanized Area Formula Funds). This item has been reviewed and recommended by the Board Capital Planning, Policy and Privatization Committee. FISCAL IMPACTS Requested Authorization: To enter into a refinancing and new money, if

any, transaction with the NJEDA as issuer of the Bonds.

Past Authorizations: 2004A Certificates of Participation 2008A Certificates of Participation 2009A Certificates of Participation 2008 NJEDA Bonds 2014 NJ TRANSIT Notes Projected Date of Completion: Financing expected to be closed in January,

2017 Anticipated Source of Funds: Bond Proceeds DBE Goal: N/A

50223(NJT Board - 12/14/2016)

RESOLUTION

CONCERNING THE REFINANCING OF OUTSTANDING STATE OF NEW JERSEY CERTIFICATES OF PARTICIPATION, NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (“NJEDA”) TRANSPORTATION PROJECT SUBLEASE REVENUE REFUNDING BONDS (NEW JERSEY TRANSIT CORPORATION LIGHT RAIL TRANSIT SYSTEM PROJECT) 2008 SERIES A AND NEW JERSEY TRANSIT CORPORATION GRANT ANTICIPATION NOTES, SERIES 2014A (FEDERAL TRANSIT ADMINISTRATION SECTION 5307 URBANIZED AREA FORMULA FUNDS), AND NEW MONEY FINANCING, IF ANY, VIA THE ISSUANCE OF NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY TRANSPORTATION PROJECT SUBLEASE REVENUE AND REVENUE REFUNDING BONDS AND AUTHORIZING THE EXECUTION AND DELIVERY OF A LEASE AGREEMENT AND SUBLEASE AGREEMENT WITH THE NJEDA AND ENTRY INTO A FUNDING AGREEMENT, EACH IN CONNECTION WITH THE ISSUANCE OF NJEDA TRANSPORTATION PROJECT SUBLEASE REVENUE AND REVENUE REFUNDING BONDS

WHEREAS, pursuant to N.J.S.A. 27:25-1 et seq. (the “Act”), New Jersey Transit Corporation (the “Corporation”) is authorized to purchase, lease as lessee, or otherwise acquire, own hold, improve, use and otherwise deal in and with real or personal property, or any interest therein, for any public or private entity; and WHEREAS, the Corporation entered into State of New Jersey Certificates of Participation (“COPs”) transactions in 2004, 2008 and 2009 to finance the acquisition of bus and rail rolling stock for the Corporation; and WHEREAS, in 2008, the New Jersey Economic Development Authority (“NJEDA”) issued its $342,115,000 Transportation Project Sublease Revenue Refunding Bonds (New Jersey Transit Corporation Light Rail Transit System Project) 2008 Series A (the “2008 NJEDA Bonds”); and

50224(NJT Board - 12/14/2016)

WHEREAS, in 2014, the Corporation issued its $381,790,000 Grant Anticipation Notes, Series 2014A (Federal Transit Administration Section 5307 Urbanized Area Formula Funds) (the “2014 NJ TRANSIT Notes”); and WHEREAS, it is advantageous to the Corporation to facilitate the refinancing of the outstanding COPs, the 2008 NJEDA Bonds and 2014 NJ TRANSIT Notes and, if the Corporation so desires, to include a new money component, if any, via the NJEDA’s Transportation Project Sublease Revenue and Revenue Refunding Bonds (the “Bonds”); and WHEREAS, in connection with the issuance of the Bonds, the Corporation shall enter into a lease agreement, sublease agreement and any other document necessary to effectuate the issuance of the Bonds (collectively, the “Lease Financing Documents”) with NJEDA, and the Corporation, with the consent of the Commissioner, shall enter into a funding agreement (the “Funding Agreement”), both of which shall be subject to and dependent upon appropriations being made from time to time by the State Legislature; and WHEREAS, the Corporation is authorized by the Act to enter into such contracts and take such other actions necessary, convenient or desirable to carry out any power expressly or implicitly given to the Corporation, including, without limitation, entering into the Lease Financing Documents and the Funding Agreement. NOW, THEREFORE, BE IT RESOLVED BY THE NEW JERSEY TRANSIT CORPORATION AS FOLLOWS:

1. The Board hereby approves the refunding of the COPs, the 2008 NJEDA Bonds and the 2014 NJ TRANSIT Notes and issuance of the new money portion, if any, via the issuance of the Bonds, and authorizes the execution and delivery of the Lease Financing Documents and the Funding Agreement by an Authorized Officer (as defined below), provided that the term of the Bonds shall not exceed thirty (30) years and the new money portion of the Bonds shall be in an amount sufficient to produce approximately $60 million for capital projects;

50225(NJT Board - 12/14/2016)

2. The Corporation hereby authorizes an Authorized Officer to execute and deliver the Lease Financing Documents, the Funding Agreement and such other documents, instruments, agreements and papers and to do such acts and things as may be necessary or advisable to effectuate the transaction, with such changes, insertions and omissions as shall be approved by an Authorized Officer of the Authority, with the advice of the State Attorney General;

3. The Corporation hereby authorizes the payment of any costs incurred in connection with the issuance of the Bonds that are not paid for from the proceeds of such Bonds;

4. For the purposes of this Resolution an “Authorized

Officer” shall mean the Chairman, Vice Chairman, Treasurer, Secretary, Executive Director or Chief Financial Officer of the Corporation and shall also mean any other person who shall be authorized by resolution of the Corporation to perform such act or to execute such document or any other person or persons who shall be authorized to act on behalf of the Corporation by the Chairman or Executive Director of the Corporation which certificate shall set forth such authorization and shall contain the specimen signatures of each such person; and

5. This resolution shall become effective 10 days after a

copy of the minutes of the Corporation meeting at which this resolution was adopted has been delivered to the Governor for his approval, unless during such 10 days the Governor shall approve the same, in which case this resolution shall become effective upon such approval, as provided in the Act.

50226(NJT Board - 12/14/2016)

EXECUTIVE SESSION AUTHORIZATION

BE IT HEREBY RESOLVED pursuant to N.J.S.A. 10:4-12 and N.J.S.A. 10:4-13 that the Board of Directors of the New Jersey Transit Corporation hold an executive session to discuss personnel matters, contract negotiations, the status of pending and anticipated litigation and matters falling within the attorney-client privilege, including, but not limited to, the Personal Injury Claim of Diana Anderson; and

BE IT FURTHER RESOLVED that it is expected that

discussions undertaken at this executive session could be made public at the conclusion of these matters as appropriate.

50227(NJT Board - 12/14/2016)

ITEM 1612-69: PERSONAL INJURY CLAIM OF DIANA ANDERSON BENEFITS It is the opinion of NJ TRANSIT and defense counsel, in recognition of the totality of the circumstances including the serious injuries that resulted, to settle the claim of Diana Anderson. ACTION Staff seeks authorization to settle the claim of Diana Anderson through her attorney, at an amount discussed in executive session. The Attorney General has approved the proposed settlement, subject to the availability of funds. PURPOSE NJ TRANSIT By-Laws require Board approval of the settlement of all claims and lawsuits involving personal injury, death or property damage in excess of $500,000. This case venued in the Essex County Superior Court, Newark, New Jersey, initiated from a Bus claim. FISCAL IMPACTS Requested Authorization: Request authorization to settle the Personal Injury

Claim of Diana Anderson Projected Date of Completion: FY 2017 Anticipated Source of Funds: FY 2017 Operating Budget Diversity Goals/Participation: Not applicable. No goods or

services to be procured.

50228(NJT Board - 12/14/2016)

RESOLUTION

WHEREAS, Article VI, Section II of the By-Laws requires Board Authorization for settlement of claims in excess of $500,000; and WHEREAS, Diana Anderson has presented a claim with a probable settlement cost greater than $500,000; and WHEREAS, staff has reviewed the claim and recommends settling this case out of court; NOW, THEREFORE, BE IT RESOLVED that the Chairman or Executive Director is authorized to settle the claim of Diana Anderson through her attorney, at an amount discussed in executive session. The Attorney General has approved the proposed settlement, subject to the availability of funds.

50229(NJT Board - 12/14/2016)