Body
Department of Utilities
Reference: A Resolution of the City Council of the City of Brighton, Colorado, ACTING BY AND THROUGH ITS WATER ENTERPRISE, Approving THAT CERTAIN SURFACE USE AND MINING AGREEMENT BY AND BETWEEN THE CITY OF BRIGHTON AND READY MIXED CONCRETE COMPANY (“RMCC”), for THE MINING OF APPROXIMATEly 9.708 ACREs OF CITY-OWNED LAND LOCATED IN KEN MITCHEL LAKES CELL NO. 1, AND AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE THE AGREEMENT, AND SETTING FORTH OTHER DETAILS RELATED THERETO
To: Mayor Richard N. McLean and Members of City Council
Through: Manuel Esquibel, City Manager
Chontel Trujillo, Assistant City Manager of Operations
Prepared By: Curtis Bauers, Utilities Director
Date Prepared: October 5, 2015
PURPOSE
To consider the Surface Use and Mining Agreement to allow the Ready Mixed Concrete Company (RMCC) to mine up to an additional 10 surface acres adjacent to and incorporated into, the existing Cell #1 of the Ken Mitchell Lakes Storage Complex. This Agreement would generate royalties from the removal of salable aggregates through RMCC as well as result in additional water storage capacity in Cell #1.
BACKGROUND
Gravel mining at the Ken Mitchell site began in the early 1990’s and has gone through many iterations over the years. As the storage has been completed, various additional projects have been necessary to bring it to operational status. The Ken Mitchell Storage Complex currently consists of 1,800AF in Erger’s Pond, 2,400AF in Cell#1, and 2,500AF in Cell#3. Cell#2 was mined and then filled in with overburden from the construction of the other cells, and is no longer a water storage vessel.
Staff has received a recent request from RMCC to do additional mining in Cell #1. A Permit referred to as a 110 Permit, authorizes minor gravel and aggregate mining on properties less than 10 acres, in an expedited fashion. RMCC has identified a 10 acre piece of property which lies within the slurry wall surrounding Cell #1, in the SW corner of Cell #1, which has very good sand and gravel content and is attractive to them for additional mining. Allowing RMCC to mine this property could produce as much as 300AF of additional storage space, provide additional revenue of as much as $200,000 to enhance the Storage Complex/Park property, and possibly results in a more beneficial swimming beach design for the future park. RMCC has agreed to a term from us requiring the mining there be complete by the end of this year. RMCC as a result may also be able to modify the mining plan on the rest of the site, where the swimming beach and ‘brick house’ are located. Additionally, there is an oil and gas well existing on the 10 acre parcel in question. This well could be a significant liability to a future park, but allowing it to be mined out at this time, would be a big benefit. There is some question as to whether the Oil and Gas Commission will support our desire to have this well capped and abandoned, but preliminary indications are good that we will be able to have it removed as part of this mining effort.
The 110 mining permit application (attached) has been submitted and approved pending an Agreement with the City of Brighton to detail the terms of the mining plan and royalties to be paid. That attached draft Surface Use and Mining Agreement (SUMA) provides those details.
CRITERIA BY WHICH COUNCIL MUST CONSIDER THE ITEM
FINANCIAL IMPACT
There is no budgetary impact to the proposed 110 mining permit or the Surface Use and Mining Agreement. There is, in fact, a revenue to be generated by the royalties. That revenue is currently proposed to be held in an account with RMCC allowing the City to draw against it for additional work that may be required as mining is completed, but while additional earth-moving activities may be necessary and easily provided by RMCC while on-site. In addition to the direct revenue benefit, the additional storage capacity could have a value well in excess of $500,000.
STAFF RECOMMENDATION
Based on the benefits outlined, staff supports the request by RMCC to mine 10 additional acres in Cell #1. Staff and the City have worked successfully with RMCC for many years and feel that the additional mining will facilitate the overall successful completion of the project and that the resulting Park and Storage Complex will serve the City well for many decades into the future.
Therefore staff recommends approval of the Resolution authorizing the SUMA with RMCC.
ATTACHMENTS
• Surface Use and Mining Agreement
• 110 Mining Permit Application
• Resolution Approving SUMA