HomeMy WebLinkAbout20041428.tiff RESOLUTION
RE: APPROVE AMENDMENT TO MINING LEASE 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, based upon the recommendation of Lee Morrison,Assistant County Attorney,
the Board deems it advisable to amend Page 1, Paragraph 1, Line 6, of said mining lease prior to
it being recorded, with said amendment to reflect 250,000 cubic yards per year, and
WHEREAS,after review,the Board deems it advisable to approve the amendment to said
lease, an amended 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 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 be, and hereby is, approved.
BE IT FURTHER RESOLVED by the Board that the Chair be, and hereby is, authorized to
initial said lease, as appropriate.
The above and foregoing Resolution was,on motion duly made and seconded,adopted by
the following vote on the 17th day of May, A.D., 2004.
BOARD OF COUNTY COMMISSIONERS
W LD�C�OUNTY,, COLORADO
EL
t" ����'� l/��!/✓GC Qs V �. �'11121 E
,.�! -.t Robert D. Masden, Chair
1861 'i `rk to the Board
William H. ePro-Tem
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Clerk to the Board
M.D A il.1 cc
APP S M:
Davi . Long
my ttor ey
Glenn Vaad
Date of signature:
2004-1428
EG0050
Q% MINING LEASE FOR"DERR" PROPERTY FOR SAND GRAVEL AND AGGREGATE
THIS LEASE made the tx day of 'M itL`` ,2004 between Darwin D. Derr and
Broken Arrow Investments LLC,A Colorado Limited Liabilitytbmpany 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 - Consideration for this lease in hand paid is hereby acknowledged in the
amount of$10.00. Royalties under the lease shall be$.40(forty cents)per ton removed from
the property. In addition to the .40 per ton, the royalty payment shall be$1.40 per cubic yard
C� i� t for any materials mined, and stockpiled by DERR within the four years of mining and then
`k III removed from the property by COUNTY which amount shall be not less than 250,000 cubic
yardsoX?&exceed a total of 1,000,000 cubic yards. COUNTY shall maintain and make
MAY 1 7 2004 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
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,
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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
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.
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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
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.
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11. SURRENDER —After the 1St 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
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.
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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.
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.
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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: COUNTY OF WELD, STATE OF
dish/ ,I; ��� COLORADO by and through the
' ./ Iis,. Board of County Commissioners of
Weld County Clerk to t ;^`I • , . 0 the County of Weld
/r.•t I4
1
'C. ;+*
� \ �� �BY �h�L �. 2,41
I By:
Deputy Clerk to the Board Robert D. Masden , Chair
MAY 0 5 2004
Broken Arrow Investment, LLC
CD By•
Kgar(S/l rr 4A a-
D WIN D. DERR
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STATE OF COLORADO )
) ss
COUNTY OF Weld COUNTY )
The forgoing instrument was acknowledged before me this /9-Jday of ,
2001, by Darwin D. Den and Darwin D. Den for Broken Arrow Investment LLC.
.\PRY
Witness my hand and official seal. D Pus
ii IA K
?N ary Public
yl`q4.o"O*OPPOi
My commission expires: ,1-4/7/41/44y Commission Expires:10-07-2004
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^EXHIBIT A
LEGAL DESCRIPTION
•
A tract of land located in the Northeast Quarter of Section 4, Township 5
North, Range 65 West of the 6th P.M., Weld County, Colorado, and being
more particularly described as follows:
Commencing at the North quarter corner and considering the West line of
said Northeast quarter to bear South 01 degrees 24 minutes 41 seconds
West with all other bearings contained herein being relative thereto:
thence South 01 degrees 24 minutes 41 seconds West, 1150.00 feet along
the West line of the Northeast quarter of said Section 4 to an existing
fence line and the true point of beginning:
thence along said fence line by the following twelve (12) courses:
South 82 degrees 26 minutes 00 seconds East, 509.80 feet;
North 77 degrees 17 minutes 00• seconds East, 589.30 feet;
South 01 degrees 07 minutes 00 seconds West, 82.20 feet;
south 28 degrees 44 minutes 00 degrees East, 39.30 feet;
South 00 degrees 46 minutes 00 seconds West, 226.70 feet;
South 83 degrees 16 minutes 00 seconds East, 201.80 feet;
North 09 degrees 03 minutes 00 seconds East, 164.80 feet;
North 88 degrees 31 minutes 00 seconds East, 218.50 feet;
South 21 degrees 46 minutes 00 seconds East, 481.30 feet;
South 00 degrees 30.minutes 00 seconds East, 353.50 feet;
South 44 degrees 55 minutes 00 seconds East, 237.00 feet;
South 26 degrees 57 minutes 00 seconds East, 415.57 feet to a point on
the South line of said Northeast quarter thence North 88 degrees 14
minutes 05 seconds West, 2112.20. feet along said South line to the
Southwest corner of the Northeast quarter of said Section 4;
thence North 01 degrees. 24 minutes 41 seconds East, 1410.09 feet to the
True Point of Beginning.
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