The Ely City Council voted to remove the President John Gianoli and the Vice President Steven Leith of the Railroad Management Board at their meeting on Aug. 7. The firings came after Councilman Bruce Setterstrom gave a lengthy presentation, stating the many questions from the council that he felt the management board has failed to answer, dating back to December of 2013.
“I have the utmost respect for John Gianoli. I think the job they have been doing has been fantastic but as an elected official for the people of Ely, we have to be fiduciary responsible. My question is why couldn’t we get answers?” Setterstrom said. “I feel terrible about it, but I feel that to be fiduciary responsible, I have to know where we are at with the city.”
The City Council’s involvement comes as they also sit as the railroad’s Board of Trustees after it was gifted to the city from Kennecott when the mine left town. The council has become particularly involved in the operations of the railroad after the most recent audit of the NNRy’s books described several “red flags.” Though most of the issues have been addressed thanks to new measures put into place, several remained, causing the council to start asking questions to the management board.
One such question posed by the council to the management board asked why the foundation changed their personnel manual from an 80-page book to one under 20 pages. The new manual, which was not recognized by the railroad’s insurance company POOL/PACT, removed a clause about hiring a spouse, a change that benefitted the railroad’s Executive Director Mark Bassett when his wife and him both began working there in 2008. The question, which was asked in a city council meeting in May, was one of many that has remained unanswered by the management board, according to Setterstrom.
When reached for comment, Gianoli referred to the management board’s lawyer, Scott Husbands.
“The White Pine Historical Railroad Foundation Management Board has tried to be both proactive and continually responsive to all requests from the city council, so we were surprised by the council’s actions to remove the chairman and the vice-chairman of the management board,” Husbands stated in a press release sent out on Aug. 13.
Setterstrom, Marty Westland and Randy Lee all voted yes to remove Gianoli and Leith. Councilman Dale Derbidge abstained from the vote on basis that he was friends with one of the board members being voted on. Councilman Sam Hanson was not present for the meeting.
Setterstrom admitted his original agenda item was to remove all the current management board members, but he scaled it back to just the top two because he felt that was all that was necessary to spur on cooperation between the two entities.
“My goal is to get members on there so we can get some answers,” Setterstrom said during the meeting. “I felt like if we just removed the bottom two members, their replacements would have just gotten steamrolled over, so we either had to remove three or the top two.”
Westland’s prior employment at the railroad drew criticism from Bassett in the meeting’s closing public comment section, where he brought up the issue of Westland’s eventual firing, the ordering of a faulty crown brass.
“When Locomotive 93 went down due to the wrong crown brasses being ordered, it was John Gianoli who stepped up,” Bassett said, referencing the hundreds of thousands of dollars that Gianoli and the Tour and Recreation Board paid for due to the faulty piece. He couldn’t believe that after Gianoli’s history with the foundation that the council would let him go.
“To say that I am stunned would be an understatement,” he said.
White Pine Tour and Recreation Board Chair Ed Spear continued the criticism of the council in the public comment section, saying the actions of the council threatened the railroad’s long-term viability, which makes up a quarter of the tourism brought into town.
The removals are the latest of escalating actions taken by the city council to address concerns from the last audit of the railroad’s financials at the end of 2013. The council had previously formed an ad-hoc committee between the council and the management board to try and increase communication.