Engagement Memo—Assessing the Company’s Actions in Response to Erosion at the Del Mar Bluffs

We are initiating an audit of the company’s response to the ongoing erosion of the bluffs in Del Mar, California over which the company operates daily Pacific Surfliner service. In February 2021, a seawall collapsed along the bluffs. This is just the most recent of such events which, over the past 20 years, have resulted in emergency repairs, rail service suspensions, and Federal Railroad Administration-imposed speed restrictions. Our objective will be to assess the extent to which the company is taking actions to monitor, evaluate, and mitigate risks associated with operating service on these tracks. We may expand our scope or modify our objective during the audit. We plan to interview company, federal, state, and local officials who share responsibility for maintaining the infrastructure and assessing the safety of the track. We will also review documents related to this situation. In addition, we plan to visit the Del Mar site, to the extent feasible under stakeholder coronavirus-related restrictions.