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Home My WebLink About20042745.tiff RESOLUTION RE: APPROVE SECOND AMENDED MINING LEASE FOR "DERR" PROPERTY FOR SAND, GRAVEL, AND AGGREGATE AND AUTHORIZE CHAIR TO SIGN - DARWIN DERR AND BROKEN ARROW INVESTMENTS, LLC WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to Colorado statute and the Weld County Home Rule Charter, is vested with the authority of administering the affairs of Weld County, Colorado, and WHEREAS, by Resolution #2004-1316, dated May 5, 2004, the Board of County Commissioners approved a Mining Lease for Sand,Gravel,and Aggregate between the County of Weld,State of Colorado, by and through the Board of County Commissioners of Weld County, and Darwin Derr and Broken Arrow Investments, LLC,with terms and conditions being as stated in said lease, and WHEREAS, by Resolution #2004-1428, dated May 17, 2004, the Board of County Commissioners approved an Amended Mining Lease for Sand,Gravel,and Aggregate between the County of Weld, State of Colorado, by and through the Board of County Commissioners of Weld County,and Darwin Derr and Broken Arrow Investments, LLC,with terms and conditions being as stated in said lease, and WHEREAS,the Board has been presented with a Second Amended Mining Lease for Sand, Gravel, and Aggregate which includes revisions to Paragraph 2.b to state, "There shall be a minimum royalty payment for years five, six and seven of the term of this lease during which time COUNTY shall be obligated to compensate DERR for the removal of 250,000 tons per year of material regardless of the amount of material actually removed, provided that the County shall be allowed a credit for royalties paid on materials not removed during years five, six and seven which may be applied to royalties which become due and owing in subsequent years," and WHEREAS,after review,the Board deems it advisable to approve said Second Amended Mining Lease for Sand,Gravel,and Aggregate,a copy of which is attached hereto and incorporated herein by reference. NOW,THEREFORE, BE IT RESOLVED by the Board of County Commissioners of Weld County,Colorado,that the Second Amended Mining Lease for"Derr"Property for Sand,Gravel,and Aggregate between the County of Weld, State of Colorado, by and through the Board of County Commissioners of Weld County, and Darwin Derr and Broken Arrow Investments, LLC, be, and hereby is, approved. BE IT FURTHER RESOLVED by the Board that the Chair be, and hereby is, authorized to sign said amended lease. 2004-2745 EG0050 rn :?(,), P�, Cl1 MINING LEASE FOR SAND, GRAVEL, AND AGGREGATE PAGE 2 The above and foregoing Resolution was,on motion duly made and seconded, adopted by the following vote on the 15th day of September, A.D., 2004. � BOARD OF COUNTY COMMISSIONERS ��/�'(/u WELD COUNTY, COLORADO EXCUSED Robert D. Masden, Chair 1861 ( � lerk to the Board ti William H. J e, Pro-Tem y Clerk to the Board �� M. J. ile R D AS • R ��Gk, Davie i Longi my Att qey Glenn Vaad Date of signature: di;# 2004-2745 EG0050 799 SECOND AMENDED MINING LEASE FOR"DERR" PROPERTY FOR SAND GRAVEL AND AGGREGATE THIS LEASE made the /Sill day of epte n-4342 r ,2004 between Darwin D. Derr and Broken Arrow Investments LLC,A Colorado Limited Liability Company of Greeley,Colorado COUNTY of Weld, State of Colorado, (hereinafter collectively referred to as "DERR" ) and BOARD OF COUNTY COMMISSIONERS OF WELD COUNTY, COLORADO,a body corporate and politic operating pursuant to the laws of the State of Colorado and the Weld County Home Rule Charter, doing business at 915 Tenth Street, City of Greeley, County of Weld, State of Colorado, hereinafter referred to as "COUNTY." DERR, in consideration of the Agreement set forth herein to be kept and performed by COUNTY,and of the payment of royalties by COUNTY as provided herein,and subject to the terms,conditions,and provisions,contained herein, leases to COUNTY that certain tract of land situated in Weld County,State of Colorado,generally described as the NE 1/4 of Sec 4,T5N, R65W, 1/2 mile north of 8th St on Balsam Ave.,south of Eaton Ditch which is particularly described in Exhibits "A" attached hereto and made a part hereof, for the purposes of mining, removing,processing,storing,and marketing there from all sand,gravel,and aggregate,all of which are herein referred to as materials. 1. TERM OF LEASE-The term of this Lease shall be a period of twelve years from the date of regulatory approval or shall begin six months after the date of signature whichever is earlier. Should COUNTY be delayed in obtaining a Mined Land Reclamation Permit by reason of an administrative denial and the need to appeal such decision,DERR agrees to toll the running of the term during the administrative delay for a time not to exceed one year. This lease constitutes the sole and exclusive right to prospect and remove materials during its term except as expressly allowed in this agreement. Mining shall be completed within the first ten years of the term of this agreement but materials may be stockpiled and removed during the remaining two years of this lease. Upon written request by the COUNTY twelve months prior to the expiration of this Lease, DERR shall grant to COUNTY an additional twenty-four month period of time to remove any materials stockpiled during the first ten years of the Lease. This extension extends only to the right to stockpile and remove material from a location mutually acceptable to COUNTY and DERR. COUNTY acknowledges an obligation to continue to pay DERR a royalty of$.40 per ton for material removed during this extended stockpile period. 2. CONSIDERATION — (a)Consideration for this lease in hand paid is hereby acknowledged in the amount of$10.00. (b) Royalties under the lease shall be$.40(forty cents) per ton of material removed from the property. There shall be a minimum royalty payment for years five,six and seven of the term of this lease during which time COUNTY shall be obligated to compensate DERR for the removal of 250,000 tons per year of material regardless of the amount of material actually removed, provided that the County shall be allowed a credit for royalties paid on materials not removed during years five,six and seven which may be applied to royalties which become due and owing in subsequent years. (c) In addition to the.40 per ton on material mined by the COUNTY, the royalty payment shall be$1.40 per cubic yard for any materials mined, and stockpiled by DERR within four years of mining and then removed from the property by COUNTY which amount shall be not less than 250,000 cubic yards per year but not to exceed a total of 1,000,000 cubic yards. COUNTY shall maintain and make available to DERR records of material removed from the property. 3. SURFACE RIGHTS of COUNTY - COUNTY may clear brush, trees, undergrowth, fences internal to the property,corrals,and other improvements,as may be reasonably necessary to explore for materials or to locate pits and stockpile in processing areas and in order to obtain access to these premises, and to carry on its operations hereunder, COUNTY shall have the right to make use of all roadways presently existing on the leased premises,and shall have the further right to build such additional roads as may be necessary for the production and removal of materials hereunder.COUNTY is further required to share such roads and additional roads 111111111111 001 1111111111 �� 1111111 ill 111111111 �� 3221799 09/23/2004 04:10P Weld County, CO 2004-2745 1 of 7 R 0.00 D 0.00 Steve Moreno Clerk& Recorder FINAL 2.1, DERR Lease page-2 with DERR who shall maintain and operate their own mining,crushing and washing operation on the premises concurrently with COUNTY and COUNTY agrees to provide general permitting for such operations. General permitting shall include Division of Minerals and Geology and Weld COUNTY Use by Special Review permits but is not intended to include special permits including by way of example not limitation, CDPS(discharge)permits,building permits, air emission permits or notices and well permits. Special permits shall be the responsibility of the party generating the need for the special permit In building such roads, COUNTY may use materials from the leased area, and shall not be required to pay any additional royalties for materials so used. COUNTY may maintain and operate rock crushing, washing and screening equipment on the leased premises, if it should so desire, to process materials thereon. Neither party shall have the right to operate or maintain any concrete or asphalt batch plant on the premises. COUNTY may, subject to the provisions contained herein, also erect such buildings and install such machinery and equipment as may be useful in connection with its operations hereunder. COUNTY shall conduct its mining operations in a manner which does not interfere with DERR's operations on the premises including DERR's operations to install a liner. COUNTY agrees to grant reasonable easements to protect the liner. 4. WATER - DERR intends to line the gravel operation, at its own cost, and obtain a determination from the State Engineer that the lining is of low enough permeability to preclude consumption of ground water by evaporation. DERR agrees to dedicate sufficient water rights to the COUNTY to satisfy State requirements for a well permit supported by a plan of augmentation,substitute supply plan or replacement plan for all consumptive uses associated with the mining operation including consumptive evaporative water loss,water consumed in the mining and processing of the material including dust suppression dust abatement for the premises and access roads to the premises and domestic use. The water will need to be sufficient in terms of volume of replacement water and replacement flows to the river system and must be timed to meet state requirements including winter replacement which may require storage or recharge. DERR agrees to convey an ownership interest in water rights along with any dry up covenants and transfer documents to transfer shares and to cooperate to provide evidence of prior water use and testify in water proceedings as may be deemed necessary by the COUNTY. COUNTY will be responsible for obtaining any necessary engineering to support a substitute supply plan, augmentation plan or water supply agreement. COUNTY will retain the services of a competent water resource consultant licensed as a professional engineer in the State of Colorado to determine the adequacy of the water rights proposed by DERR and to provide information to DERR as to the basis of the determination should DERR wish to retain its own consultant to review the determination. To accomplish the foregoing, the parties agree that DERR will dedicate to the COUNTY and transfer title thereof of sufficient water for the first phase of the mining operations prior to the commencement of any mining. The first phase shall be the first three years of the term of this lease, will occur prior to the liner having been approved by the State Engineer and will result in approximately 20 acres of exposed water surface. Second phase will either require the dedication of additional sufficient water to complete the project or approval of the liner by the State Engineer. Should there be excess water as a result of the lining at the end of the first term, COUNTY will convey back to DERR the excess water. Failure to provide adequate water rights by DERR shall constitute a material breach of this agreement and, in addition to other remedies provided for herein, DERR shall be liable to COUNTY for liquidated damages in the amount of $100,000 and not as a penalty. In addition to any water dedicated or conveyed in accordance with this section , DERR also agrees to make water available during all mining and reclamation operations for the purposes of reclamation and dust abatement for the premises and dust abatement on access roads to the premises. 5. PERMITS - COUNTY shall be responsible for obtaining all necessary State, COUNTY, and 1 111111 11111 11111 111111 I'll 11111 1111111 III 11111 llll IIII 3221799 09/23/2004 04:15P Weld County, CO 2 of 7 R 0.00 D 0.00 Steve Moreno Clerk& Recorder FINAL 2.1, DERR Lease page-3 Federal permits for the mining operation on the subject premises at its own expense which permits will not include asphalt or concrete batch plants but may include wash plants and discharge to waters of the state pursuant to a discharge permit(CDPS). Weld COUNTY shall consult with DERR during the permitting process and to exercise reasonable diligence in obtaining all necessary permits in a timely fashion. The operation on the premises by DERR and COUNTY shall be conducted in compliance with those permits as may be determined by the agency legally responsible for enforcing those permits. COUNTY shall cooperate with DERR in the event DERR seeks to assign, renew, modify or expand any permits which are granted to any party to prospect and/or remove materials of any nature from the Property. DERR agrees to cooperate with Weld COUNTY and to execute any necessary documents to assist Weld COUNTY in obtaining the necessary permits. DERR will be responsible for any of the construction, improvements and ongoing operations necessary to comply with an approved CDPS permit. 6. PROTECTION AND RESTORATION OF SURFACE - COUNTY and DERR will each be responsible for restoring the portion of the premises disturbed by each of them in accordance with a reclamation plan approved by the Colorado Mined Land Reclamation Board or Division as determined by that agency. DERR shall be consulted by the COUNTY in the preparation of said plan . 7. REMOVAL OF IMPROVEMENTS AND EQUIPMENT - All improvements and equipment placed on the leased premises by COUNTY, except fences, and gates, shall remain the property of COUNTY and COUNTY shall have the right to remove such property prior to the expiration of this Lease. 8. INDEMNIFICATION - COUNTY agrees to indemnify DERR against liability on all claims for damages and injuries to third persons or third persons'property claimed to have resulted from the acts or omissions of COUNTY or its agents or employees in conducting the mining operation during the term of this lease. COUNTY further agrees to defend and indemnify DERR from and against any governmental agency investigation, complaint, suit, or other formal or informal proceeding, including remediation requirements and penalties,caused by or resulting in any way from COUNTY's operations under the Lease. DERR agrees to indemnify COUNTY against liability on all claims for damages and injuries to third persons or third persons'property claimed to have resulted from the acts or omissions of DERR or its agents or employees in conducting the mining operation during the term of this lease. DERR further agrees to defend and indemnify COUNTY from and against any governmental agency investigation, complaint, suit, or other formal or informal proceeding, including remediation requirements and penalties,caused by or resulting in any way from DERR's mining operation. 9. FENCING - COUNTY shall have the right to remove any fencing on the property during the course of the operation,. COUNTY agrees to restore the three strand barbed-wire fence along the west property line of the premises once operation is completed unless such requirement is waived by DERR. 10. USE OF PROPERTY BY DERR-DERR may inspect premises to determine compliance with this Lease provided such inspections do not interfere with the operations or create a safety hazard for COUNTY or its agents or employees or the DERRS.- DERR shall have access to the surface in order to install the linings surrounding the excavation provided that the actions of DERR in installing the liner shall not unreasonably interfere with the recovery of the gravel resource or decrease the amount of surface area available for mining by more than 20% or interfere with the operations or create a safety hazard for COUNTY or its agents or employees or DERR. For the duration of the Lease, including any extension to remove stockpiled material, DERR may conduct mining operations under any permits obtained by COUNTY,and may screen, wash, stockpile and subsequently remove those materials provided such operations do not interfere with the operations or create a safety hazard for COUNTY or its MID 11111 11111 111111 IIII VIII 1111111 III VIII IIII IIII 3221799 09/2W2004 04:10P Weld County, CO 3 of 7 R 0.00 D 0.00 Steve Moreno Clerk& Recorder FINAL 2.1, DERR Lease page-4 agents or employees or DERR. The DERR mining option shall be considered secondary to the COUNTY's mining operation and must be conducted in accordance with the permits obtained by COUNTY provided such permits allow at mining of at least 500 cubic yards per year. DERR may also stockpile materials exclusively for itsown use in an area designated by COUNTY and may remove those materials as required by DERR provided the amount per year to be removed by DERR shall not exceed 500,000 (FIVE HUNDRED THOUSAND) cubic yards. DERR is also granted the right to weigh, at its option, each vehicle coming onto the Leases premises and/or leaving the Leased premises. This right shall not relieve COUNTY from maintaining records of material removed required under section 2 of this agreement. 11. SURRENDER —After the 1s` four years of the lease term, COUNTY shall have the right to surrender this Lease at any point to DERR upon written notice provided that all restoration, other than planting, pursuant to paragraph 6 herein, has been completed in accordance with the Mined Land Reclamation Permit. Upon surrender under this paragraph, COUNTY shall transfer back to DERR all shares of water not required to augment the water loss from the excavated ponds. Notice must be provided no less than ninety days prior to the day COUNTY intends to surrender the premises. COUNTY further agrees to either assign any permits it was operating under at the time of surrender, or if such permits are not assignable,cooperate with DERR in obtaining substantially similar permits. 12. DEFAULT BY COUNTY-In the event that default occurs in the performance of Sections 2,3, 5 or 6 of this Lease by COUNTY, DERR shall have the right to give a 180-day notice in writing to COUNTY,demanding the correction or removal of such default. In the event COUNTY fails to correct or remove such default within such period, DERR may, at its option,terminate this Lease by written notice. In the event of such termination,COUNTY shall have no rights to any of the materials stockpiled on the premises. COUNTY further agrees to either assign any permits it was operating under at the time of termination,or if such permits are not assignable, cooperate with DERR in obtaining substantially similar permits. Except as described above,if this Lease is terminated by DERR pursuant to this section, DERR shall have no further right to remedies against COUNTY. COUNTY shall have sixty days after such termination within which to remove any plant, structures or equipment placed on the leased premises by COUNTY. 13. DISCHARGE OF WATER-DERR shall have the obligation to provide the means to discharge waters pumped from the ponds created by the mining operation on the premises over and across any adjacent property held by DERR,to the Cache la Poudre and DERR agree to grant an easement in gross for that purpose. COUNTY will obtain any additional easements other than those for crossing DERR property and DERR will reimburse COUNTY for reasonable costs in obtaining such additional easements including costs of condemnation if necessary and appropriate. The COUNTY will provide a permit to construct a culvert under Balsam Avenue. DERR will be responsible for any installation or maintenance associated with said culvert, or any other construction contemplated within this agreement. 14. ACCESS-COUNTY shall access the property from the West along the existing oilfield access road to the extent practicable. 15. NOTICE-Notice required to be given under this lease shall be accomplished by mailing, certified mail return receipt requested, to the following addresses: COUNTY: Board of COUNTY Commissioners P.O. Box 758 Greeley, CO 80632 IIIIII1111111111IMAM 111111111111 III11111IIII IIII 3221799 09/23/2004 04:15P Weld County, CO 4 of 7 R 0.00 D 0.00 Steve Moreno Clerk& Recorder FINAL 2.1, DERR Lease page-5 Copy by First Class mail to: Weld COUNTY Attorney 915 Tenth Street P. 0. Box758 Greeley, Co 80632 DERR: Copy by First Class mail to: Broken Arrow Investments LLC PO BOX 898 Greeley, CO 80632 Change of address shall be given by mailing of notice of such change. 16. Reservation of Other Minerals to DERR - This Lease pertains only to the removal of sand, gravel, and aggregate. All other minerals located on the property are reserved unto DERR. 17. Warranty of Title to Sand, Gravel and Aggregate - DERR warrants that it possess an indefeasible estate in fee simple in and to all interest in the sand,gravel,and aggregate on the subject property and has good right and full power to lease same. DERR shall indemnify COUNTY and pay all claims and costs of defense for any causes of action arising out of any third parties' claims to said materials, shall warrant quiet and peaceable possession to the COUNTY under the terms of this lease, and will defend title thereto against all persons who may lawfully claim the same. Further, DERR states that the property is free and clear from any encumbrance affecting the right of the COUNTY to remove materials. This lease is contingent on COUNTY's obtaining satisfactory title insurance at COUNTY's sole expense. DERR makes no warranties as to the quality or quantity of sand, gravel,and aggregate at the property. 18. Waiver of Trespass and Nuisance Claims - DERR recognizes that the operations contemplated by the lease may, even when conducted in accordance with regulatory requirements, cause interference with adjacent land uses. DERR hereby waives any tort including trespass and nuisance claims based upon such interference but, in so doing, expressly reserves any cause based upon this Lease and the right to seek administrative remedies from the agencies responsible for regulating such operations. Notwithstanding the preceding, DERR does not waive any trespass or nuisance claim based upon the willful and wanton or grossly negligent acts of the COUNTY or its employees. 19. Other Operations- COUNTY acknowledges that DERR intends to work with landowners that adjoin the leased premises in order to consolidate and expand potential mining and storage opportunities. COUNTY agrees to cooperate in DERR's efforts of expansion and consolidation, including but not limited to boring under Balsam Avenue to connect to adjacent properties. 20. VENUE-Venue for any dispute arising under this lease shall be proper in and for the District Court in and for the COUNTY of Weld, State of Colorado, 19th Judicial District. 21. OPTION for STORAGE-DERR anticipates creating a storage reservoir of approximately 3000 acre feet, unless DERR has an opportunity to sell such storage rights elsewhere. DERR grants COUNTY a option to purchase up to 20 percent of any storage capacity located within the physical boundaries of the Lease created by DERR at market value. Said option must be exercised on or before March 1, 2007. Market value shall be determined by a mutually acceptable MAI appraisal or by matching a bonafide offer on a unit basis for the storage rights. Market value shall be established as of the date COUNTY exercises its option, or March 1, 2007, which ever date is later. 1111111111111111 IBM 111111111111 III 11111 Ell IIII 3221799 09/23/2004 04:15P Weld County, CO 5 of 7 R 0.00 D 0.00 Steve Moreno Clerk& Recorder Final 2.1 DERR Lease page-6 22. ASSIGNMENT and DELEGATION. No obligations or benefit of either party may be delegated or assigned without the express written agreement of the other party. Currently the property is titled in the name of Darwin D. Derr who intends to transfer the subject property to Broken Arrow Investments LLC, A Colorado Limited Liability Company, formed by Darwin Derr. County consents to the assignment and delegation to Broken Arrow Investments LLC, A Colorado Limited Liability Company. 23. ENFORCEMENT. In addition to any other remedies set forth herein,this agreement may be enforced by any appropriate equitable or legal remedies, including injunctive relief, specific, performance, and damages. 24. LEASE BINDING. This lease is intended to be binding on the heirs,personal representatives, and successors in interest to the parties hereto. 25. CLOSING. Closing shall occur within ten days of final execution of this agreement at a mutually acceptable time and place. ATTEST: A�� COUNTY OF WELD, STATE OF ^^''^^77 n� COLORADO by and through the Board of County Commissioners of ,Clerk to the Board the County of Weld 1 f♦l ;%6' tt�GGl � q` g !'` By: t->S0 09/15/2004 Deputy Clerk to the Board-- 'William H. Jerke, Pro—Tem M:\WpfilesMATER\BrokenArrowleasederr.doc 111111111111 11111 OE M MO 1111111 MINI IIII IIII 3221799 09/23/2004 04:15P Weld County, CO 6 of 7 R 0.00 D 0.00 Steve Moreno Clerk& Recorder L y - <;2:71,5- Final 2.1 DERR Lease page-7 Broken Arrow Investment, LLC DARWIN D. DERR STATE OF COLORADO ) ) ss COUNTY OF Weld COUNTY ) The forgoing instrument was acknowledged before me this /6 y of 200Y,by Darwin D. Den and Darwin D. Den for Broken Arrow Investment LL . Witness my hand and official seal. i..�sT...PUBe )rr,'DiralPBt tir otary Public Qo ¼k OF CO\--6= My commission expires: /0/7/Oz/ ` My Commission Expires:10-07-2004 M:\W pfiles\WATER\BrokenArrowleasederr.doc 11111111111111111111111 I I I 11111 1111111 111 11111 I I I I I I I I 3221799 09/23/2004 04:15P Weld County, CO 7 of 7 R 0.00 D 0.00 Steve Moreno Clerk& Recorder Hello