October 7, 2025, Item #2
DATE:
TO:
FROM:
CONTACT:
SUBJECT:
Summary:
AGENDA REPORT CityofPoway
October 7, 2025
Honorable Mayor and Members of the City Council
Audrey Denham, Director of Community Services J'\,D
Sarah Becker, Recreation Area Manager
(858) 668-4575 or [email protected]
CITY COUNCIL
Fourth Amendment to Facilities Use and Lease Agreement Between the City of Poway and Poway-Midland Railroad Volunteers, Inc., for Use of Certain Facilities at Old Poway Park and Crosthwaite Yard and City of Poway's Lease of Poway-Midland Railroad Volunteer-Owned Rolling Stock
This report seeks City Council approval of the Fourth Amendment to the Facilities Use and Lease Agreement with Poway-Midland Railroad Volunteers, Inc. (PMRRV) and the City of Poway. The amendment formalizes revised cost-sharing obligations for routine and capital maintenance activities, adjusts payment timelines, increases contributions to the Repair and Maintenance Fund, and allows for updated ticket and charter pricing.
Recommended Action:
It is recommended the City Council approve the Fourth Amendment to the Facilities Use and Lease Agreement between the City of Poway and Poway-Midland Railroad Volunteers, Inc. and authorize the City Manager to execute the necessary documents.
Discussion:
The City and PMRRV first entered into an agreement in 1993, beginning a long-standing partnership to preserve and operate City-owned trains. Since then, multiple agreements have been executed, with the current agreement established on November 1, 2016, and amended three times to adjust cost sharing provisions, modify exhibits, and update charter fees.
PMRRV is a volunteer-based organization responsible for maintaining the train equipment including repairs and general upkeep of the rolling stock, and operating the trains for the public on weekends, during historical tours, and for special events. Under the Facility Use and Lease Agreement, PMRRV volunteers are responsible for operating and maintaining the trains, while the City owns and maintains the Train Barn and tracks, and shares in the cost of maintaining the train equipment with PMRRV.
1 of 8
October 7, 2025, Item #2
The proposed Fourth Amendment addresses increased maintenance needs and rising costs related to the train tracks, crossing signals, and train equipment. This Fourth Amendment updates the mutual cost-sharing arrangement and increases PMRRV's cost-sharing amount, which PMRRV has agreed to, as noted in Attachment B.
1. General Maintenance: PMRRV agrees to pay 50% of $23,900 for annual maintenance including train track and signal inspections, train pit cleaning, and hazardous waste removal.
Prior to this Amendment, the City was solely responsible for annual maintenance costs.
2. Train Track Repair and Maintenance: PMRRV agrees to pay 50% of train track repairs, up to $10,000 annually. Prior to this Amendment, the City was solely responsible for annual train track repair costs.
3. Capital Equipment Replacement: PMRRV agrees to pay 50% of capital equipment including the replacement of the battery for the cable car and boiler tubing for the steam engine locomotive. Capital equipment is estimated at $60,000 and is replaced every 5 years. PMRRV's portion of $6,000 is paid to the City annually.
4. City-owned Rolling Stock Repair and Maintenance: Under the 2016 agreement, PMRRV and the City each contributed $4,000 annually to fund unexpected repair and maintenance needs of City-owned rolling stock. To better prepare for such expenses, both parties have agreed to increase annual contributions to $10,000 each.
5. Annual Adjustments: Cost sharing amounts will be reviewed annually and adjusted based on actual costs or the Consumer Price Index. The total increase cannot exceed 5% per year.
6. Fare Increases: All fares received are kept by PMRRV to help fund their operations, including their cost-sharing with the City. Per the current agreement PMRRV must receive City Council approval to increase train fares. PMRRV would like to adjust train fares as noted below to keep up with rising costs and increase their contribution to repair and maintenance costs. The last fare increase occurred as part of the 2016 Agreement. The fare increase will take effect upon execution of the Agreement amendment. Future requests to increase train fares will be approved by the City Manager or designee.
Equipment Current Train Fare Proposed Train Fare
Steam Locomotive & Cable Car -Adult $3.50 $5.00
Steam Locomotive & Cable Car -Children $1.00 $2.00
3-12 years of age
Steam Locomotive & Cable Car -Children Free Free
under2
Speeder -Adult $2.50 $4.00
Speeder -Children 3-12 years of age $1.00 $2.00
Speeder -Children under 3 Free Free
The Fourth Amendment promotes sustainable funding for critical infrastructure and maintenance, aligning with increased costs while preserving the collaborative partnership between the City and PMRRV.
Environmental Review:
None.
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October 7, 2025, Item #2
Fiscal
Impact:
The
requested
action
will
result
in
the
following:
City
Contribution:
Reduction
of
anticipated
contribution
for
cost-sharing
of
general
maintenance
from
$23,900
to
$11,950
-previously
the
City
was
covering
the
full
cost
of
this
item
Reduction
of
contribution
for
cost
sharing
of
train
track
repairs
-
previously
the
City
was
covering
the
full
cost,
cost
varied
depending
on
the
repairs,
PMRRV
now
pays
50%
up
to
$10,000 $6,000
annual
contribution
towards
railroad-related
replacement
costs
to
the
Capital
Equipment
Fund
-New
$6,000
additional
contribution
to the
City's
Repair
and
Maintenance
Fund
-increased
from
the
current
$4,000
contribution
PMRRV
Contribution: $11,950
anticipated
contribution
for
cost
sharing
of
General
Maintenance
items
-New
Up
to
$10,000
contribution
for
cost
sharing
of
track
repairs
-New
$6,000
contribution
towards
railroad-related
replacement
costs
to
the
Capital
Replacement
Fund
-New
$6,000
additional
contribution
to
the
City's
Repair
and
Maintenance
Fund
-increased
from
the
current
$4,000
contribution
As
shown
above,
PMRRV
will
now
contribute
up
to
an
additional
$33,950,
which
includes
an
increased
contribution
to
the
Repair
and
Maintenance
Fund,
cost-sharing
for
Capital
Replacement
expenses,
and
shared
costs
for
general
maintenance
previously
covered
by
the
City's
General
Fund.
These
updated
cost-sharing
amounts
are
included
in
the
Old
Poway
Park
FY
2025-26
budget
in
Org
205020,
and
PMRRV
has
agreed
to
each.
All
City
expenditures
will
continue
to
be
funded
by
the
General
Fund.
Increased
fares
will
be
retained
by
PMRRV
to
help
fund
their
operations,
including
this
cost-sharing.
Public
Notification:
None. Attachments: A.
Fourth
Amendment
to
Facilities
Use
and
Lease
Agreement
B.
Letter
from
Poway-Midland
Railroad
Volunteers
Reviewed/Approved
By:
Assistant
City
Manager
3 of
8 Reviewed
By:
Alan
Fenstermacher
City
Attorney
Approved
By:
Chris
Hazeltine
City
Manager
October 7, 2025, Item #2
FOURTH AMENDMENT TO FACILITIES USE AND LEASE AGREEMENT
BETWEEN THE CITY OF POWAY AND THE POWAY-MIDLAND RAILROAD VOLUNTEERS, INC., FOR USE OF CERTAIN FACILITIES AT OLD POWAY PARK AND CROSTHWAITE YARD AND CITY OF POWAY'$ LEASE OF
POWAY-MIDLAND RAILROAD VOLUNTEER-OWNED ROLLING STOCK
This FOURTH AMENDMENT TO FACILITIES USE AND LEASE AGREEMENT
BETWEEN THE CITY OF POWAY AND THE POWAY-MIDLAND RAILROAD VOLUNTEERS, INC., FOR USE OF CERTAIN FACILITIES AT OLD POWAY PARK AND
CROSTHWAITE YARD AND CITY OF POWAY'S LEASE OF POWAY-MIDLAND RAILROAD VOLUNTEER-OWNED ROLLING STOCK ("FOURTH AMENDMENT") is made and entered into effect this 7th day of October, 2025, by and between the CITY OF POWAY, a general law city and municipal corporation (the "CITY"), and the Poway Midland Railroad Volunteers, Inc., a California nonprofit corporation (hereinafter referred to as "PMRRV").
RECITALS
1. CITY and PMRRV entered into that certain "FACILITIES USE AND LEASE
AGREEMENT BETWEEN THE CITY OF POWAY AND THE POWAY-MIDLAND RAILROAD VOLUNTEERS, INC., FOR USE OF CERTAIN FACILITIES AT OLD POWAY PARK AND CROSTHWAITE YARD AND CITY OF POWAY'S LEASE OF POWAY MIDLAND RAILROAD VOLUNTEER-OWNED ROLLING STOCK" ("AGREEMENT"), dated November 1, 2016, by which CITY and PMRRV established the terms and conditions for operation of the Poway-Midland Railroad by PMRRV.
2. CITY and PMRRV executed the FIRST AMENDMENT to the AGREEMENT on December 6, 2016, to revise the cost-sharing conditions in Section 12(A)(1) of the AGREEMENT.
3. CITY and PMRRV executed the SECOND AMENDMENT to the
AGREEMENT on November 22, 2021, to remove the sold trolley car from the EXHIBITS and to extend the repayment schedule of the AGREEMENT.
4. CITY and PMRRV executed the THIRD AMENDMENT to the AGREEMENT on June 15, 2023, to change the charter fees in EXHIBIT 3 of the AGREEMENT.
5. PMRRV has agreed to an increase in cost-sharing of expenses with CITY due to increase in costs of maintenance of rolling stock and equipment, and CITY has agreed to the proposed cost-sharing amounts.
6. PMRRV has agreed to cost-share (50/50) with CITY on general maintenance activities.
7. PMRRV has agreed to cost share (50/50) with CITY on capital replacement items.
4 of 8 ATTACHMENT A
October 7, 2025, Item #2
8. In the event that new or unexpected maintenance or capital expenses arise during the term of this Agreement CITY or PMRRV may submit a written request to the other party for cost-sharing of such expenses.
9. PMRRV and CITY have agreed to alter the payment due dates for the Boiler Repayment, the Repair and Maintenance Fund payment, and Capital Replacement funding. In FY 25-26, these amounts will be due to CITY on December 31, 2025. In the 2026 calendar year and beyond, these amounts will be due to CITY on July 31.
10. PMRRV has requested an increase in the fee charged for train ride tickets due to the increase in their operating costs, and to help with the cost-sharing. The CITY has agreed to this increase and to modify the approval process such that ticket pricing and charter cost increases for CITY-owned and PMRRV-owned rolling stock shall be approved administratively by the City Manager or designee.
11. This FOURTH AMENDMENT is necessary to make these changes.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Section 12(A)(3) of the AGREEMENT is hereby added to read as follows:
CITY and PMRRV agree to equally share the cost of annual general maintenance, including but not limited to, annual track inspections, signal inspections, train pit cleaning, and hazardous waste removal. PMRRV shall reimburse the CITY fifty percent (50%) of general maintenance. The estimated amount to be shared between the CITY and PMRRV is $23,900, in the first year.
For budgeting purposes, the CITY shall notify PMRRV in February of projected costs for the upcoming fiscal year. If projected costs are expected to increase by five percent (5%) year over year, CITY and PMRRV will engage in good-faith discussions and PMRRV shall not unreasonably withhold approval of general maintenance that the CITY has determined is necessary. Upon completion of general maintenance, the CITY shall invoice PMRRV, and PMRRV shall reimburse the CITY within 30 days of receipt of the invoice.
2. Section 12(A)(4) is hereby added to read as follows: CITY and PMRRVagree to equally share the cost of annual train track repair and maintenance. PMRRV shall reimburse the CITY fifty percent (50%) of train track repair and maintenance, up to $10,000. This amount is subject to annual adjustments based on actual costs and shall not increase more than the annual change in the Consumer Price Index for the San Diego Carlsbad area (All Urban Consumers CPI-U) or 5%, whichever is less. Upon completion of train track repair and maintenance the CITY shall invoice PMRRV, and PMRRV shall reimburse the CITY within 30 days of receipt of the invoice.
Train track repair and maintenance costs above the amount noted in this section shall be mutually agreed upon and require written approval by the CITY and PMRRV prior 5 of 8
October 7, 2025, Item #2
to the commencement of the work or expenditure of funds.
3. Section 12(A)(5) of the AGREEMENT is hereby added to read as follows:
CITY and PMRRV agree to equally share the cost to replace capital equipment, including replacement of the battery for the cable car and boiler tubing for the steam engine locomotive. CITY and PMRRV shall set aside funds to ensure adequate reserves are available when the equipment is due for replacement. PMRRV is responsible for fifty percent (50%) of capital equipment.
Replacement of the cable car battery is estimated at $12,000, with an expected replacement cycle every five (5) years. The CITY and PMRRV are each responsible for $1,200 annually.
Replacement of the steam engine locomotive boiler tubing is estimated at $48,000, with an expected replacement cycle every five (5) years. The CITY and PMRRV are each responsible for $4,800 annually.
The annual payment by PMRRV for capital equipment shall be $6,000. This amount shall be paid to the CITY annually and is due on December 15, 2025, then on July 31 of 2026 and each year thereafter. These funds shall be placed in a designated account and restricted to expenses related to repair and maintenance. This amount shall be adjusted annually based on estimated future costs. Annual adjustments shall not exceed the annual change in the Consumer Price Index for the San Diego-Carlsbad area (All Urban Consumers CPI-U) or 5%, whichever is less.
4. Section 12(A)(2) is hereby amended to read as follows: The annual payment by PMRRV for repair and maintenance of CITY-owned rolling stock is $10,000.
This amount shall be paid to the CITY annually and is due on December 15, 2025, then on July 31 of 2026, and each year thereafter. These funds shall be placed in a designated account and restricted to expenses related to repair and maintenance. This amount shall be adjusted annually based on the annual change in the Consumer Price Index for the San Diego-Carlsbad area (All Urban Consumers CPI-U) or 5%, whichever is less.
5. Section 12(A)(6) of the AGREEMENT is hereby added to read as follows:
In the event that new or unexpected maintenance or capital expenses arise, including but not limited to, train track repairs, infrastructure repairs, or safety-related improvements, either the CITY or PMRRV may submit a written request to the other party for cost-sharing of such expenses. New or unexpected maintenance or capital expenses will be repaired and/or replaced based on available funding and at the CITY's discretion.
Any request for cost-sharing of new expenses shall be subject to mutual review and written approval by both CITY and PMRRV prior to the commencement of the work or expenditure of funds.
Unless otherwise agreed in writing, no party shall be obligated to contribute to the cost of any new or unexpected expense not previously approved through this process. 6 of8
October 7, 2025, Item #2
6. The third sentence of Section 12(A)(1) is amended to read as follows:
Payment will be due on December 31 of each year through 2025 and then on July 31 of 2026 and every year thereafter.
7. EXHIBIT 3 PMRRV Fee Schedule of the AGREEMENT is hereby deleted.
8. Section 11 of the AGREEMENT is hereby amended to read as follows: The parties agree that ticket prices for passenger trips and Charter use of CITY-owned and PMRRV-owned rolling stock shall be subject to written administrative approval of the City Manager or designee. At the time of this Amendment, approval has been given to increase adult fees for the locomotive and cable car to $5.00, adult fee for the speeder to $4.00, and children's fees for the locomotive, cable car and speeder to $2.00. At the time of this Amendment, charter fees are as follows: locomotive: $600 for the first 2 hours and $100 for each additional hour; cable car: $300 for the first 2 hours and $100 for each additional hour; and speeder: $125 for the first 2 hours and $50 for each additional hour.
9. Except as otherwise amended by the previous FIRST, SECOND, and THIRD AMENDMENTS, all other terms and conditions of the AGREEMENT shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this FOURTH AMENDMENT to be executed the day and year first above written.
CITY OF POWAY,
a California municipal corporation
Chris Hazeltine, City Manager
ATTEST:
Carrie Gallagher, CMC, City Clerk
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POWAY-MIDLAND RAILROAD
VOLUNTEERS, a California nonprofit
Corporation
David Blake, President
APPROVED AS TO FORM:
Alan Fenstermacher, City Attorney
October 7, 2025, Item #2
September
25,
2025
Dear
Members
of
the
Poway
City
Council,
As
the representative
of
the
Poway
Midland
Railroad
Volunteers
(PMRRV)
to
the
City
of
Poway,
I would
like
to
begin
by
expressing
our
deep
gratitude
to
each
of
you
and
to
the
city
staff
for
your
continued
support
of
the
only
heritage
railway
operating
within
a
city
park
in
the
State
of
California
. The
railroad
remains
a
vital
part
of
the
Old
Poway
Park
experience
and
serves
as
a
living
reminder
of
the
city's
commitment
to
preserving
our
shared
history
and
heritage.
On
behalf
of
our
Board
of
Directors, I
am
writing
to
convey
our
support
for
the
recommendations
outlined
in
the
revised
operating
agreement
between
the
City
of
Poway
and
PMRR.
The
proposed
increase
in
cost
sharing
reflects
our
mutual
dedication
to
ensuring
the
long-term
operation
and
preservation
of
the
railroad's
equipment.
In
addition,
we
are
proposing
a
modest
but
long-overdue
adjustment
to
our
ticket
and
rental
fees.
These
changes
will
allow
us
to
better
manage
our
share
of
operating
costs
while
continuing
to
build
reserves
to
support
the
sustainability
of
our
operations. On
behalf
of
all
members
of
the
Poway
Midland
Railroad
Volunteers,
we
value
and
appreciate
your
ongoing
partnership.
We
warmly
invite
each
of
you
to
visit
Old
Poway
Park
any
weekend
to
experience
firsthand
the
history
and
community
spirit
that
your
support
makes
possible.
With
gratitude
,
Oav-ir/
iv/.
8faie,
David
M.
Blake,
PhD
President,
Poway
Midland
Railroad
8 of
8 ATTACHMENT
B