Town Council - Regular Meeting

Alright. We're gonna get started. I'm gonna call to order the town council's special meeting on 04/21/2026. Will you please rise and join me in the pledge of allegiance? Alright. Will the town clerk please take roll?

Mayor Pro Tem Bell?

Here.

Council Member Baer? Present. Council Member Mortolero?

Here.

Sorry. Council member Pesamorelli? Present. Council member O'Connor? Present. Council member Hoback?

Here.

That's it. Council member Mortalero?

Here.

And Mayor Moore?

Here.

Mayor, you have

quorum. All right. Thank you. We'll see if we have a motion to approve the agenda tonight.

So moved. Second.

All in favor, say aye. Aye. All opposed, say no. All right. We have an agenda, and we have one item on the agenda tonight, and that is an informational item for the potential sale of the town's mineral rights. There will be public comment after that. Normally, do public comment before items on the agenda, but we're gonna reverse it tonight so we can get this information out. Alright. With that, I will turn it over to David Franks, and he'll take us on a journey.

Thank you, mayor. I'm David Frank, the director of environmental services for the town of Erie. And tonight, we're gonna have an informational meeting about the potential sale of a portion of the town's mineral rights. This is just informational. There is no decisions being made tonight.

And I need to stress that though broad broad terms are are in place, negotiations are still underway. And so because of the nature of that, there may be some information that that we can't disclose tonight. But there will be, assuming that a deal is brought before this council, another public hearing, another meeting where information that's unavailable tonight will be shared with this council and with the public. Oops. So a quick agenda.

I want to talk about where we where we are and and a really brief where we're going, the policy decisions that are at stake here, what the next steps are, and where we're where we're going. Then, of course, the the real reason we're here for public comments, and then we'll we'll wrap this up. I will say staff intends to be extremely brief tonight because the the point of this meeting is is to hear from the public and to give the public space to speak. So those who have been following along, following an initial hearing in November 2024, which was continued until March 2025, ECMC, the State of Colorado Energy and Carbon Management Commission, approved the Draco pad. That was for 26 wells that are located near north of the landfill near the westerly development off of County Road 7.

That site is in unincorporated Weld County. Those that have followed the process know that Erie, though not the local government with relevant land use authority, did participate actively in the Weld County process and the state process. In the last spring, there began talks about about acquiring the town mineral rights, either through lease or sale. So this has been an ongoing process for for about a year now. And and any decisions, of course, what to do with town property, which would include mineral rights, is a policy decision for this council.

And again, just to stress to everybody, no agreement has been reached or any decisions made, and that's not what's happening tonight. Oops. Sorry. I'm a little quick on draw here. So just to kind of orient ourselves where we're talking about.

So as I said, north of the landfill near Westerly is where the Draco facility will be built. That is north of the what's called the Liquid Handling Hub. If So you've ever driven down County Road 7 and you see the the gigantic white tanks out there, that is a facility where regionally oil and gas wells report fluids to, and then they're distributed from there for refining. That facility will be drilling over four miles to the west to nearly Highway 287. That's what you see on the the very far left of this of this map is Highway 287.

And the the blue or the purplish box here shown is what's called the spacing unit being proposed for Draco. There is a spacing unit that was that was approved with the oil and gas development plan in March. This one is very slightly modified from that, basically shaving that last quarter mile off of the western edge. This is currently under review by ECMC, and no decision has been reached on this amended spacing unit. But I fully expect them to adopt this to be the area of production for Draco.

So this includes production under portions of Vista Point, Erie Commons, Baxter Farms, Canyon Creek, basically the neighborhoods within this map here, so just to give you kind of a sense. This production is from very great depth, mile and a half down. The units being targeted are between 7,508 feet below the surface. So if you imagine they're going to drill sort of diagonally down from Draco, splaying out in a fan and then across this area. So some some questions that have come up, and I think these are the most poignant ones.

So what happens if the town decides not to sell its minerals? As people are aware, there was a a senate bill in 2024 that states that municipally or local government owned minerals within the boundaries of that local government are not subject to to forced pooling. Normally, process for a mineral owner is if your mineral interest is within the spacing unit, you're approached and offered lease or sale. You're free to negotiate that, accept it, decline it, whatever you'd like to do. If you do decline the those terms, then they have made you a a a good faith offer.

And provided that they can establish that they control 45% of the minerals within that that spacing unit, they can pool the rest of the minerals in forcibly under under terms that are dictated by Colorado statute. Municipal government local governments are exempt from that forced pooling provision. So if the town were to not sell, we do we do no deal at all. We do have mineral rights which are under the current subject of lease. Those already leased minerals would be produced per the terms of those lease.

Those leases can't just be broken willy nilly as long as all parties are abiding. And we would receive whatever royalty payments are are outlined within those individual leases. The majority of those leases were tied to the land when the land was deeded to the town. There were some that the town elected to lease after the fact. I think the last lease that was signed was in, like, 2012, so none recently.

But this is something the town has done on again, off again throughout history. The unleased portions, of course, could not be forcibly pooled. And the unleased portions, we're we're not talking about a huge amount. It's something like three and a half percent of of this entire area. But it but it does have have an impact.

So can the town's minerals be avoided if they're in in this area, if they're in line to be drilled. And the simple reading, if you read the statute, is that they must be avoided unless they are least purchased or voluntarily pulled. Now, what avoided means? We don't know at this point. We are in somewhat uncharted territory in that this provision passed by the Colorado legislature in 2024 is a bit untested.

Breena, do you want to did you want to speak for a moment on the actual I won't say details.

Could we go back a few

Sorry. Slides,

In your excitement to get to the map

Of course.

So there is an agreement that is still being negotiated between, Erie and Civitas or, SM. There are some, broad pieces that I'll bring forward tonight. But, like all negotiations, this is not final until there is an agreement on a council agenda. Meaning, anything that we might talk about tonight may still change. And but broad strokes, we are looking at some additional safety measures. We're looking at plugging and abandoning 16 or 17 wells. Those are in excuse me, in addition to the ECMC's 03/26/2025 order to plug and abandon. There is some additional oversight that we've negotiated, monthly inspections. If there's a safety concern, we will be able to report that to the ECMC. And then additional compensation.

We're looking at three parcels out by County Line Road. We're looking at production revenue, meaning a percentage of the production would be, remitted to the town, and then a cash payment, roughly 4 and a half million dollars. At this point, there is no agreement that is final. There is nothing, that is available public because we are still in the negotiation phase, which brings us to next steps. So in terms of next steps, if there is an agreement, it would come forward for counsel.

Nothing could happen without counsel approval. It would have to be in public at a public meeting, and then counsel would have vote either to affirm the agreement or to reject the agreement. If there is no deal that is reached, then, there would be nothing to bring forward because there would be no minerals that would be sold or leased by the town. And then, anything that, would be available, that would be public would be part of that public meeting on a future date. No decision is happening tonight.

And I want to stress that prior to that meeting, it is certainly staff's intention to share much more information, detailed maps, etcetera. While negotiations are are underway, I I don't think it's appropriate to share those things. And I also think it's important to note that when when the state of Colorado approved Draco in March 2025, they approved a facility to drill up to and including 26 wells. I would fully expect, no matter what action the town takes, that 26 wells will be drilled at Draco. The exact nature of what what units may be spaced, what what areas will be produced, that is not something the town knows or could know until that path is ventured down.

But I I'm under no delusions that that Draco will not go forward with with 26 laterals.

Okay. That concludes the presentation. Let's see. Council is going to have two opportunities to talk tonight. One is right now, if they have any clarifying questions to what's just been shared. And then at the end of public comment, we'll also have a chance for counsel to ask any clarifying questions. Councilmember Baer, and if this often happens, we'll start with you and we'll just work our Okay. Way Great.

Thank you for the presentation, and thank you, everyone, for coming out so we can all operate hopefully on a level set of information and understanding. Rina, guess my question is for you. You mentioned an additional 16 to 17 wells on top of the 22 wells that are included in the conditions of approval for Draco with the state. The conditions of approval are above and beyond the floor that the state has for safety measures that must be met. So the additional I hear our middle schoolers all over town going sixteen, seventeen wells.

I'm disappointed I didn't think of that one. My middle schooler will be disappointed in me as well. Well,

then gold star for me. So in addition but it's my understanding that those 16 or 17 wells will be plugged and abandoned out of necessity. But what we're talking about really is an expedited process.

I think that's accurate. Yes.

Okay. Thank you. I just wanted to clarify that. And then the the additional monitoring. So that so there is a floor of safety and monitoring that occurs and happens. And part of the approval criteria or the condition of approval approval was that the town would or there would be air quality monitoring surrounding the pad. So this would be different than that?

Potentially. That pad, my understanding, I'm looking to mister Frank, is not located in the town's boundaries. So we would not have jurisdiction over anything that would happen, obviously, outside of our our boundaries. This would be getting us a right to come onto monthly to do an inspection outside of our boundaries.

Rather than asking permission?

Yeah. So we currently don't have a right to inspect facilities which are outside of Erie beyond, like you said, asking and hoping for the best. This would codify our ability to inspect that site. We just actually finished our first quarterly inspection of our inspection program. Very excited. We've already inspected every facility in town. This is obviously a big one that would be outside of town and and having access. Obviously, the state would do its its routine inspections as well as Weld County, but I think it's pretty critical that the town also be able inspect the site. If you read the report, we found a few things that the state had missed at other locations.

Okay. Thank you. Those are my questions.

Alright. Thanks. Councilmember Mortolero.

Alright. Thank you. And, you know, thanks everybody for coming out. And and David and Marina for all your work on this. I just have a couple questions. Obviously, we've been talking about this for a little bit. You said that they're looking at not going all the way out to February and stopping short of that. Is there a reasoning behind that?

There was no reason listed in the amended application. Okay. Simply that they want this configuration rather than that. And I don't really want to speculate because I don't know.

Okay. Thanks. And then one of the things that you brought up to ECMC were the there were six wells that you were concerned about that were plugged in and abandoned already. You got agreement, to that they would test the soil before and after the drilling operations, for those wells. Would you also add those to your quarterly inspection with your imaging to make sure there's no gas leaks? So

it's a larger question than it appears on the surface, no pun intended. When you have a plugged in abandoned well that's leaking, you may have methane in the soil, but you're not going to have detectable amounts of methane. You're not going be able to see that at the surface with an OGI camera. Okay. We are hopeful that this summer, we plan to begin a pilot program to investigate plugged and abandoned wells to collect soil vapor samples.

Depending on how that pilot program goes, we're going to bring to council the proposal to do to test every well we can get access to in town, the 100 and some plugged in abandoned wells. That's going to be a big lift and isn't directly related to this other than these six, which are a condition of the state's permit and and will have to be done regardless of what action council takes on this matter.

Okay.

Great. And you also mentioned at the the town hall meeting about the air monitoring. We're not just relying on SM or the state to do the air monitoring. We have our own equipment. We have one stationary and five mobile ones.

So the state's requirements for air quality monitoring, both what they what the state provides and what the operator is required to provide, is through the duration of preproduction activities, the construction, drilling, hydraulic fracturing, flowback, and then for a period of not less than six months after the initiation of production. That's the most volatile time for an oil and gas facility. That's not to say that's the only time you can have emissions. So after that six month period, neither the state nor the operator is required to continue doing that air quality monitoring. And so that is why it's critical that the town deploy one of its polar air satellite stations as near as is feasible.

And we're working with the Westerly developer to figure out where's the most appropriate place between that development and this facility to put that location. Obviously, with construction ongoing out there, we need to be able to access the site so we're just trying to work out the details on where exactly that thing's gonna go. But we will have that deployed prior to construction.

Great. Thank you. Alright. Councilor Hoback.

Thank you. I have a number of questions about the process that got us to the point that we're actually negotiating a contract. And to my recollection, my notes, counsel found out about this offer in September. This presentation is the first I've seen that we were contacted in the spring of twenty twenty five. So Andre, can you tell us who it was that contacted the town about our mineral rights and who they first contacted?

I believe I'm trying to remember back. This is quite a while ago now. The the initial phases of this were our economic director, Julian Jacqueline, came to me and said, do you know who this seven n company is? We're We'd like to approach them with a cash offer for this parcel of land along County Line Road. I said, yes, 7N is a division of, at the time, Civitas, now SM Energy.

And I said, if you're interested in purchasing land from this company, here are some contacts for you to call. He then reached back out and said, well, we actually had a brief meeting with them where they said we made them a cash offer slightly above appraised value. They said, no, we won't sell our land, but we would exchange it for some town mineral rights. And that's what initiated the conversation. At the time, it really didn't appear we were talking about a single parcel that that was an equitable exchange.

And it took quite a while for it to develop to the point where, like, okay, this might actually be a serious offer. And that's when we brought it to council.

Okay. That makes sense.

And how did similar question. How did the contact come about with Matt Owens of Alameda Minerals?

I think it was in September after that after that meeting, mayor Moore sent me an email and said, here's some contact information from a gentleman. I think it would be a good a good idea to to reach out to him and and hear him out. I gave him a call. He gave me his pitch. I said, that's that's a in that's intriguing.

Certainly, he's got a lot of industry knowledge. He he knows how these things work. Essentially, what Alameda Minerals, they act as a real estate broker for private mineral holders. Normally, and maybe some folks in this audience, certainly folks across town, when you're approached with a mineral lease offer, you read it and you go, boy, I have no idea what this says. There's not a lot of resources. Typically, you go hire an attorney to say, is this? Should I sign it? Is the first question. Is this a fair deal? What is the market value of these minerals?

And that's sort of the service that he was offering. So I said, draft us a proposal. We'll bring that to counsel. We'll consider a contract.

Okay.

Was there any discussion? And I know counsel didn't give direction to issuing an RFP or some sort of a competitive bid for this?

No. There wasn't an RFP process. I'm not aware of any other companies that do this exact work.

So

you mentioned 3.5%

of the

land, I guess, within the Draco area. How do you come up with that? I've seen, I guess, Mayor Moore's post on the internet was 2.8%. We haven't seen any maps. The residents haven't seen any maps that go to that kind of detail. How close are we to knowing how much we're really going to sell?

I might turn to the town attorney. What exactly we're talking about here is still being talked about?

It is still being talked about. We are in the process of identifying the minerals that we do own with a title company and a land man. And so that process is still undergoing. And I suspect that's why you're hearing different numbers, is because we're trying to figure out what exactly we do own and going back in some cases a number of years to figure out what title, who had, and transferred to whom at what point.

We're talking like Union Pacific deeds from like the eighteen seventies. Okay. Yeah. No. Riveting riveting reading in in like fancy cursive.

So that number may have changed from two and a half point 8% to three and a half percent?

Yes, depending on, again, we're tracing the ownership, which, as you can imagine, takes a minute. Have

we been in touch with in contact with any other companies or individuals in the last twelve months about selling our mineral rights?

We've received a number of unsolicited lease offers.

And is there a reason those have not been brought to counsel?

Frankly, they're nowhere near the quality of this offer, frankly, exponentially. They're pretty standard lease terms as far as, yeah, royalty interest. Yeah. Or orders of magnitude. Okay.

So maps and precision aside I know we can't talk that. To make generalities for all of us, is it safe to say that short of a few outliers, some things that are already leased that sort of thing, what Erie owns are the mineral rights underneath Erie properties? Facilities, streets, parks, open space, random commercial lots. Is that an accurate statement?

I think that's accurate.

By and large, yes. Occasionally, depending on when title was transferred, sometimes the title only is the surface, the the top, and the mineral rights have been severed. But generally speaking, yes, we own rights underneath our parcels and properties.

Okay.

Can you tell us what subsurface trespassing is?

No.

Maybe I can later.

Yeah. I mean, it what sounds like. The nuance of what constitutes trespass, even on the surface, is they're differing opinions. Ever If gone to court for a case like that, when someone is trespassing and in what nature, what constitutes trespass is difficult part of that question. And I'm not a lawyer.

Thank you very much. No more questions. All

right. Come around, Councilman Pastor Amelli.

Thank you, David. I had one question. So does DRECO have to start and finish in the timeline?

Yes. As part of the oil and gas development plan approval, when hearing was being scheduled, obviously interested persons can petition for affected party status. One party who did so was adjacent landowner, the Westerly development, by a Southern Land Company. A negotiated settlement, if you will, was reached between Southern Land as a company and Civitas, now SM Energy. And one provision of that was a truncated occupation for this preproduction activity.

Initially, that agreement was two years from when the permit would be granted, which was expected to be, at that time, October 2024. Sorry, not two years, three years. And, of course, since it was delayed until early twenty twenty five, What's in the agreement, what's in the oil and gas development plan is May 2028. However, I would encourage anyone to go listen to those couple of ECMC hearings. Commissioners made it very clear that all efforts possible must be made to have all of the wells finished and in production by October 2027.

So that is not a hard deadline. It is May 2028 is the hard deadline, but the commission was very clear that the target for the end of preproduction should be October 2027.

So delaying or moving the project with this leasing or selling of the minerals, would it have any effect on Braco implementation? Is there any chance?

I don't know their precise development timeline. Obviously, they haven't started construction. But, yes, I mean, there is it's a it's a tight window to drill 26 wells in this amount of time.

The reason why I'm asking is there was a lot of urgency and there was a lot of pushing. There was a lot of, you know, make it fast kind of thing which happened in this deal, which makes me think why it's being so rushed. And even all the negotiations, I mean, were just pushed is what I felt. So that That's why I'm asking, is is there a reason for them to finish that so that the Draco project won't be affected?

I I'm sure internally, they certainly have a date on the calendar whereby they're like, we we have to have earth movers out there. We have to we have to have drill rigs mobilized by this date in order to meet those those committed timelines. I I have no idea what those dates are. I can do my own math on on how long I think it takes to to drill and frac a well and say it's probably soon. It's got to be Mhmm.

If not if not this spring, this summer, where they're going to have to make a decision point on whether they move forward with our minerals or without. At some point, they have to call for a pooling hearing with ECMC, and they'll need to know what minerals they're trying to pool, what minerals they own, and what minerals they need to exclude.

So will the minerals that we sell give them any leverage or anything?

So the town has a lot of very unique leverage right now in that since our mineral interests that are unleased can't be pooled, the only way to acquire them is through direct negotiations with us. However, at some point, the company will need to move forward and then we'll have no leverage. We'll just be out. They'll say, we're going with plan B. That doesn't include Erie, and that's what we're doing.

And also the fee, 700,000, is that standard or?

I I don't know what standard. This is a this is a an odd space. This circumstance has only existed since 01/01/2025, when that legislation came into effect.

So if we don't sell, we don't pay anything?

Yes. The so the the fee to Alameda Minerals is not 4 and a half million. It is seven and a half percent of

7 and a half.

Whatever whatever is gained by the town, not to exceed 4 and a half million.

So another last clarification was last time, Mayor Prodham, on record, said that the contact mat was bought by the council sorry, by the staff to the council. Today, I'm hearing a different one.

No. It was I'll clarify that. The CEO of Alameda Minerals reached out to me. I immediately just sent his contact information over to mister Franks. The email is very short. I just

It's like his LinkedIn profile and his phone number and his email. I think that's the entire contents of that

Subsequent to that, he reached out to me for the contact information for the mayor of Frederick. So this is what he does. This is his his deal. But I wasn't involved with the negotiations or the contract in any way. It was simply getting the information over to staff. Correct?

Yeah. The reason why I'm asking is Mayor Protehm, last time, he said staff brought the contact to us. But here, it is a different version.

But I wasn't aware

of that.

So So what you said was misunderstanding. You don't know, but you said something? Or I believe that

contact was through David Frank. It turned out to reach out to Mayor before. The Mayor passed on the contact information to David Frank. So it was, yeah, misunderstanding.

That's all.

Okay. Council Member O'Connor.

Thank you. So it's the if we don't lease or sell the mineral rights, they must they must avoid them. But does that mean like, I had sent in a question regarding that a couple weeks ago. And the first understanding was that they were going to completely just steer around the middle rights. But there's also at least another way that they can do that and still avoid it, but possibly go through our mineral rights?

I hate to speculate. I don't know what they will propose. Okay. I don't know what the state would be amenable to accepting. And I don't know what the town would object to should should the state make a ruling that isn't in our interest.

But they but one one one option that they could try to push forward is to go through our mineral rights but not perforate the pipe and

I mean, if we let's let's let's aside legalities and state statute and ECMC rules, because there's a lot of nuance there. You could physically avoid producing a section of a lateral. There is casing, steel casing, driven all the way down the hole, all five miles of it. And then in stages, from the toe, you work backwards. You will set a packer.

You will perforate the casing with small explosives and then pressurize that section of casing to hydraulically fracture the rock. And then you then you move back and you do the next segment. If you if you didn't do a portion of the casing, you would have solid steel casing and no way to draw oil into the pipe from that section. So it's physically possible, certainly. Whether that relates back to the question of mineral trespass, I'm not a lawyer.

And I don't know what the state how the state would approach something like that. You could also simply geo steer your boreholes in a way to just avoid those areas as well. That's another way to physically avoid production from a certain area or parcel.

But we don't know until the think you had mentioned that until they do a Form two submittal that we wouldn't know if they were going to attempt to go through our mineral rights or not.

Correct. The Form two is an application for permit to drill. And that's when that's when you propose to the state of Colorado, this is precisely the alignment that we intend to drill. And this is where our boring is is going to go. And this is the pressures at which we're going to frac. These are the intervals that we're going to perforate, etcetera. And so, yeah, until that application goes to the state, we're completely speculating on what any given operator would do with any given borehole. And if they do get that method through,

where they go through our mineral rights, that pretty much interrupts our mineral rights that if we ever wanted to pursue it in the future?

Or how much would it interrupt if

the town ever decided to pursue it

in the future? So part of the review of a Form two is conflict. Are you going to potentially drill into somebody else's well? And so you have to avoid existing borings, existing laterals. Yeah, if they were to drill straight through our property, it'd be pretty difficult to then locate a well back into that. Yes.

Okay. Thank you.

Mayor Proton.

Thank you. Some of those questions I think were answered. I guess elaborating on what you just said there, can you talk a little bit about what you mean by geo steering and what that looks like?

Nobody knows what that looks like. It's 7,500 feet down. No. Essentially, you it's a so a modern a modern drill bit is a pretty complex thing. And you essentially use differential fluid pressure on one side of the bit or the other to to push it left, right, up, down.

And you're and you're recording real time what where it is, what direction it's going, and making constant corrections. Yeah. Modern drilling is a is a pretty engineered and remarkable thing. The fact that you can go down a mile and a half and then stay within a, you know, 30 foot wide piece of rock and end up where you intended is pretty amazing. It's been going on for twenty, thirty years. It's a pretty sound and tested science.

Thank you. So going back to what you had said at the outset about you fully expect that there will be 26 wells that will be drilled at Draco. So with the geo steering, so if there's not an agreement reached and SM has to go back to ECMC to exclude the town's mineral rights in the drilling and spacing unit, theoretically, they can reach the minerals that they would need to well, I I mean, I know I know we don't know what that exactly looks like. But We

we don't. The the stat the statute says we can't be pooled. It does not say we can't be spaced. Okay. So the the town's unleased minerals could certainly be part of a spacing unit as long as they're not

They're not produced. Okay.

Whether they would drill all 26 into the currently proposed spacing unit or drill north or to the south. There are other unproduced minerals in various parts of Erie that could certainly be reached from Draco. Okay. Okay.

For the property, and I want to see what we can and can't. Are we allowed to talk about the parcels that may be potentially part of this?

I think so with the understanding that that may change Sure. Depending on how we get to a where we get to in our formal negotiation.

Okay. Can we talk about the three parcels and why they are of interest to the town? You want to whoever whoever is okay with answering that.

I think I think broadly we can say that they're they're a long County Line Road Mhmm. South Of Bunnell and and north of the airport. Okay. I think if you look at that those large undeveloped fields, more or less in the center of town, you can it doesn't take a lot to see why the town would be interested in not just development along county line, but why the town would be interested in being in the driver's seat of what sort of development occurs. I can elaborate, but I think it's So fair and

we've talked a little bit about Alameda Minerals, but in addition to that, think for the public, we have in addition to Bredo, we have Oil and Gas Council, right, that we employ. And can we say they've been have they been involved in this process? Can we

Yes. They've been involved at at nearly every step in the process.

Okay. Thank you.

I review those invoices. They've been heavily

can imagine. Is and and you're working with them, and I guess, you know, I speak to you. Has Alameda Minerals negotiated in any way that you feel is in conflict with the town? Or have they generally advocated for the town's interests?

Yeah. I mean, the nature of the contract is if if we get nothing, Alameda gets nothing. Right? It's a it's a pure percentage base. So, obviously, Alameda's motivation is to maximize the return to the town. That maximizes their cut of it. And that's the only thing I've seen is that Alameda has pressed very hard to to maximize return for the town of Erie.

Okay. Thank you. Can you speak to a little bit one of the questions I've seen online is why are we looking to sell these versus lease these? Can you talk about as far as the production revenue, why is there a benefit over the other? Or is that Yes.

Typically, if I were a private mineral holder and I was considering what to do with my mineral estate, generally, the preference of lease versus sale is do you want money up front today or would you like money over time, a cut of the production proceeds? As a private mineral owner, it's often very much in your interest to take the longer cut for a couple of reasons, primarily of which is tax based. If you get a huge bunch of money in one year, you get taxed to high heaven. That is, that takes your income and it skyrockets at several brackets. Whereas if you spread that out over a twenty year term, your overall taxation burden will be much less.

In the case of the town of Erie, we don't pay taxes, so that's not as much a consideration. So from the town's perspective, lease versus sale is much less a distinct one. And it basically came down in back and forth negotiations that we were going to see a lot more through a sale than we were through a lease. Basically, the the lease terms were simply not near as favorable. So that's the that's the direction the negotiations took. Okay.

Thank you. That's all I have. Thank you.

Alright. I have a couple questions. Water comes up. Fracking is known to use a lot of water. There have been comments made that Erie is providing the water. Can you please address that particular topic?

No. I don't I wanna speak for utilities director, Todd Fessenden, but the town has not sold water for the purposes of hydraulic fracturing, and would not. We view it as a very precious resource. It's expensive enough as it is, let alone to open up some sort of bidding war on municipal water.

All right. And then on the wastewater side, as they're doing the drilling, how do they protect against our water tables and just keeping everything underground from getting contaminated.

Sure. So so one thing to note is that Erie doesn't source its municipal water from from groundwater supplies. So we can talk broadly about aquifer protection, but that is a sort of a separate subject from protecting the town's water interests. I just want to make that distinction. So when an oil and gas well is drilled, it's drilled sort of in stages, like telescoping stages.

The initial hole is quite large. And it goes from the surface all the way down through any viable aquifer. And in this area, that's going to be to the top of the the ancient Cretaceous shale that's here. And then there's about a mile of of shale, and none none of that has any potable water anywhere in it. But all of those upper units, from the alluvial stuff down through all of the the sandstones, they run large steel casing, which is then cemented in place.

So there's cement between the casing and the borehole, and then that is logged with a with what is called a sonic bond log. It's basically an ultrasound, same exact same technology, where you look through the casing to see if there's any voids in the cement, to make sure that there's solid cement bonding the casing to the to the rock so there's no channel for for migration upwards. And then you go inside that casing and start drilling a smaller hole, which is which is also then separately cased down through all the shale to the production zone. It can get more technical, but that's kind of the big picture.

Yes. No, I think it's just the big picture that there are there's engineering that happens to protect the water table is what I wanted to make sure was out on the public record. Can you tell us in Erie, there's wells all over the place. And I'm I wanna make the assumption, but I don't know this to be true. I'm assuming those wells don't just go straight down, but are likely horizontal to some degree as well. Is that If

you're if what you're looking at is, like, North Of Old Town, there's a there's a nice little horse field right at the bottom of of Morgan Hill, and there's a large array of many, many wells in one tight configuration. Those wells go down a mile and a half and then splay both north and south under this building. They extend about two, almost two and a half miles, to the north and to the south. Those facilities are all horizontal. If, instead, you're looking at a single well, maybe with a tank next to it, that well will almost certainly be just a vertical hole straight down.

Between those two technologies, there was a period in the early twenty first century, say 2005 through about 2015, where the what was in vogue was drilling what's called a highly deviated well. So this is if you if you see a facility that has three or maybe five wells on it, they will will drill out almost diagonally in like a starfish pattern, but are essentially vertical wells. Once they reach the production zone, that's the end of them. They're just a vertical stick. And they don't then then sway off horizontally. So we've got all three. Lucky us.

Got it. Okay. And so a mile and a half deep for the ones you were talking about by Morgan Hill. So likely under Morgan Hill, guessing, under Old Town or

Yeah. They they come under Old Town and then north up to about Highway 52.

Okay. And then south to

Yeah. About the edge of Old Town. Okay. So right about Erie Parkway.

Alright. And are there other are there any other of these large pads that have done horizontal drilling under Erie at this Yeah.

Certainly. Many folks are probably familiar with the Occidental facilities, Papa Joe, May J, and Yellowhammer, which are all just north of Knot Eerie Highlands.

Colliers Hill.

Colliers Colliers Hill. There's too many hills. Now we've got Spring Hill. Those are three very large facilities. Was it three years ago now? Costla East, which is out at Erie Parkway and I-twenty 5, was drilled. There's the south and west of that is the the Badger facility. There's a there's a multitude of these. Alright. Of course, Coyote Trails, another one.

Alright. So Colliers Hill then, is it fair to say that's been horizontally drilled under?

I I could pull up the map, but, yes, most likely.

Okay. And do you know if it goes across Erie Parkway to Erie Highlands? I'm going to have to get the map. Okay. I'm asking these questions because I think there's at least a narrative out there that somebody has started that all of our housing values are going to go down by $80,000 each. And yet we have all this drilling already in town. And to my knowledge, we haven't seen that impact on our housing market. So I just want to make sure that I understand what is already here totally outside of Draco.

So yes, Colliers Hill drilled under from the waste connections in the Pratt facilities just north of Vista Ridge. Of course, Vista Ridge, as well as big portions of Anthem to the south, were accessed from Coyote Trails back in 2017, 2018.

And Anthem is South of Highway 7 in Broomfield. Correct? If you could say yes for

the Yes. Yeah. Yeah. And Erie Highlands was accessed from the Morgan Hills Pad in the Northeast corner of that development. Okay. It's the vast majority of town, has been drilled under in the past decade.

So then why do we need Draco? You know, if the majority of town and if I looked at the map, maybe you can go back to the map for a second here. You know, the drilling area, I guess Old Town is to the north. Is that right? Mhmm. Yeah. So, okay. So this is to the Southwest of where the drilling is at today. Is that right? Yes. Yeah. Okay. Okay. I think that's all the questions I have for now. We'll have one more chance to be able to ask questions. And we'll move on to the public comment portion.

One related last question to the same thing so that we can can I ask one related question?

I'm just conscientious that I don't wanna necessarily go around. Could it wait until we have a chance? Yeah. Sure. Okay.

But I thought because you talked about the horizontal drilling, as a chemical engineer, I have one We'll

have a chance. I'm I'm just trying to keep the meeting moving, and I don't wanna open it all the way back up, knowing we're all gonna have another chance to ask our questions. Alright. It's now time for public comment. Please remember that public comment is not an interactive answer forum, but rather a time for you to state your comments on a particular item or issue, in this case, specifically about the Draco pad. Public comment provides the opportunity to discuss items that are not in a public hearing. This is not a public hearing, and no decisions will be made tonight. There's a way to sign up at the kiosk. If you'd like to speak tonight and haven't signed up, you can sign up in the lobby out there. Let's see.

If you have a handout for us, please hand it the town clerk. She'll make sure that we each get a copy of it. When called upon, please state your name and your location, whether you live in Erie or not, for the record. Tonight, public comment is going to be limited to two minutes per person. You'll be given a twenty second warning. At the three minute at the two minute mark, you'll be asked to wrap up your final sentence. We're doing two minutes because we have over 20 people that have signed up for public comment. And it's okay if somebody speaks in front of you to just come up and say, I agree with that person, if you'd like. All opinions are welcome. Please be respectful of each speaker.

And to ensure everyone feels welcome to share their comments, please refrain from any cheering, clapping, booing, or otherwise disruptive behavior. And with that, I'll look to our town clerk to call up our first speaker.

Our first speaker is Jennifer Ott, and she is online. Hi.

Hi, Jennifer.

Yep. Can you hear me

okay? Yes.

Great. Thank you for the opportunity to speak. My name is Jennifer Ott, and I am an Erie resident in Boulder County. So first of all, I want to state the the Draco pad will happen whether we like it or not. So I think that what the town of Erie needs to do is take advantage of that and do what's best for our town and gain revenue from this process.

I think it would be negligent of our town council to have, let's say, roughly 3% in the drilling and spacing unit unleased. The town of minerals would be held hostage, and they wouldn't be able to be further developed. Horizontal drilling is the current drilling. That's how drilling happens. Someone's not gonna come drill a vertical well for your 3% of your unleased minerals.

So, essentially, council member Dan was talking about subsurface trespass. And, basically, what they're gonna do is try to not fracture stimulate or fracking as others call it, the rock of where our minerals are. But I highly doubt they're that good, and they're they're going to be able to not drain our minerals. So if you saw the I drink your milkshake movie, and, basically, what's gonna happen is our town of minerals are going to be drained, and that's an asset to us, and it will be gone. And we will not have it, and we won't be able to drill it.

As mayor Moore was saying about the value going down of homes, I would like to counter that argument and say the value of our homes will actually go up. There's going to be 38 to 39 wells all over Erie that are gonna get plugged and abandoned. And that land has to, by a state law, get reclaimed to its natural state. Therefore, our values are gonna go up, and this is a positive. And wells that would leak into soil or water are going to be these old vertical wells that are getting plugged and abandoned. So I encourage the town to move forward, lease or sell our minerals, and get some value for our town residents and make Erie even better place to live. Thank you for your time.

Alright. Thank you.

Okay.

So next we have Elizabeth Fisher.

Welcome.

Let's see. Let me get my bearings here.

Good evening. I'm Liz Fisher. I live in Old Town, Erie. I wanna thank you for setting up this meeting to share information, take take public comment. From all I know, I think it's time to step away from the negotiating table and instead establish policy clearly stating that town owned, unleased mineral rights are not to be leased or sold.

Erie is not up for grabs. Erie has been put under pressure, pushed around by the oil and gas industry going back many years. We've been heavily exploited. At one point, Erie was the most fracked community in Colorado. SM Energy's offer is a bold and aggressive move. It should be recognized and treated as such. Our town leaders have struggled in the past, just as you good people are struggling now, to do the right thing. What is the right thing? You gotta draw that line in the sand. You have community support and the weight of Colorado law to back you up.

I'm not sure what else is needed. I think it's the best and possibly the only solution here that restores our dignity, reflects our values. Come what may, let us proceed with integrity intact and keep Erie strong. Thank you very much.

All right. Thank you.

Next we have Alyssa McLean.

She's online, Debbie.

Oh, she is.

Let me check here.

She

is.

Do you wanna go on to the next speaker here and then we can come back?

She's disappeared from both places. So let's go to Tim Larson.

Tim Larson. Tim

Larson. No okay next we have Cole Kelly and Amore.

Good evening, mayor and council. Thank you so much for your time this evening. My name is Cole Kelly with Finamore Craig, and I'm appearing tonight on behalf of a group of mineral rights owners within the Draco unit. One key factor that you guys heard about and I would like to reiterate is that the development itself has already been approved at the state level with the exception of the reduction that's currently pending in from the ECMC. The question you have before you is whether the town will participate in a way that captures value for its residents or whether it will take actions that diminish value.

Based on your own materials, the town is evaluating a transaction that could include surface land, tax base expansion, lease consideration, and ongoing royalty revenue. Those are not theoretical benefits. They represent a substantial economic opportunity tied directly to the unit. From our analysis, the total royalty stream attributable to the Erie town and mineral owners and the other owners in the Draco unit could exceed $200,000,000 over time. Under current Colorado law, as you heard, if the town chooses not to lease its minerals, those interests must be avoided rather than developed.

That means your decision has a direct impact on whether a meaningful portion of the value is realized or permanently lost. If the town declines to move forward and in doing so impairs the ability of mineral owners to develop and realize the value of their property, that creates foreseeable economic harm and raises serious legal concerns, including potential claims related to property rights and interference with expected development. Our clients are monitoring this process closely and will take appropriate steps to protect their interests if necessary. Our clients expect their property rights to be treated with the same consideration and any other as any other class of property in this town. We would strongly encourage you to pursue a path that captures this value, treats all stakeholders fairly, and avoids putting your residents' economic interests at unnecessary risk.

Thank you all very much.

All right. Thank you.

Alyssa McClain declined to be a panelist, so I did it several times. So I'm assuming she doesn't. It's okay to hear you. Alyssa McClain declined to be a panelist. Okay. Let's see here. Next, we have Bill Jones.

Good evening. My name is Bill Jones. I live in Orchard Glen in Boulder County. Good evening. I'm Bill Jones. I live in Orchard Glen in Boulder County. I've been a resident of Erie for twenty two years. I'm here to encourage the town to continue looking at opportunities to capitalize on this opportunity in front of us. If we take a passive approach, we lose the opportunity to both control some of the activities of the well, and we lose the opportunity to capitalize on some of the assets the town has had. I know the town's position has been to reduce oil and gas activity in Erie.

Those rights will never wanna be developed in the current status of avoiding those continuing development of oil. I understand there's a lot of valid concerns, But my position is that those concerns are gonna be here whether the town acts or not based on what has been passed already and dictated by the state. I respect everyone's position, but this is the only opportunity we'll have to negotiate with this agreement. I, I think it's important for the town to be proactive, and this action is doing that. So I thank you for your time, and thank you for all of your service to the town of Erie.

Alright. Thank you.

The next speaker is Carol Campbell.

Well, I changed my talking points after listening to some of the stuff. But so mayor and town council, my name is Carol Campbell, and I've been a resident of Erie residing in Morgan Hill since December 2024. I'm a former senior executive for the United States Environmental Protection Agency. As such, I was responsible for the National Environmental Policy Act program in Region 8, which oversaw land decisions on federal lands, including oil and gas development. So I'm very familiar with oil and gas development operations and consequences.

I reviewed the Draco oil and gas development plan, and there's lots of best management practices in it. The Front Range already is a nonattainment for ozone, including Erie. So the operator is supposed to carry out a lot of mitigation actions to try to keep the ozone down, and that's gonna need to be monitored. I'm glad to hear that the city is gonna be monitoring even though it's outside of the city. We're gonna probably have more dangerous air quality days in Erie due to this development in the summer and early fall.

I think Erie needs to ask for dedicated staff paid for by oil and gas to monitor implementation of best management practices and air quality, additional air quality monitors related to the development of this plan. None of the state or federal agencies will have the resources needed to pay as close attention as Erie should want in our area. There's some concern about a conflict of interest with the town hired consultant and its previous relationship with Civitas, mainly because the consultant receives benefits if the sale of rights goes through. I'm unclear why the town isn't looking at three options. No action, leasing, or selling versus just selling.

Our note negotiating power is now and in the future, and leasing allows that. Selling it is a one time deal. Why would our town and its citizens want even more of the town disrupted by this drilling and potential effects? In conclusion, I'm for no action or leasing versus selling. I think the town residents deserve more information on the pros and cons of those three alternatives before a decision is made thank you

all right thank you

our next speaker is Julie Friday

Good evening. My name is Julie Friday and I'm here on behalf of incline energy partners. They are a taxpayer to the town of Erie. We believe the information presented tonight does not fully reflect the value of the proposed transaction involving the sale of Erie's mineral assets. Based upon review of the assessor site, it appears that the three surface tracks that SM subsidiary would convey to the town of Erie roughly total about 158 acres.

Comps in this area are currently valued between 400,000 and $475,000 per acre, implying a service value alone of roughly 63,000,000 to $75,000,000 That's a meaningful benefit that could positively impact Erie taxpayers. The service tracks alone equate to Erie receiving somewhere between 1,700 and 1,900 in value for every citizen in Erie. Importantly, this estimate does not include the additional value from the sale of the actual mineral rights themselves, the ongoing production revenue, and future ad valorem tax contributions the city would receive from this transaction. When considering the full scope of value being conveyed, we believe this transaction represents a strong outcome for Erie. The city has a fiduciary responsibility to act in the best interest of its residents and based on the available data we believe that approving the sale is consistent with that responsibility.

Thank you for your time.

All right. Thank you. Our

next speaker is Dan Rasler.

I'm Dan Rasler. I live in Erie. And I'm here to speak against the lease or sale of mineral rights owned by the town of Erie. Dracoll's a foregone conclusion, but there's a possible consequence to Dracoll's fracking that may still be averted, and that is potential damage to homes in this area. I bring that up because I don't know the level of risk posed by fracking under the hundreds of houses built over abandoned mines in this community.

When I think about one of those mines, Lehi, I imagine that caverns that are from five to eight feet high and just 30 to 40 feet beneath the surface. Its roof was supported by thin pillars of crumbly lignite that miners left after excavating the rest of the coal from the seam, pillars those miners hoped were just strong enough to keep the roof from collapsing as they worked. The coal that they mined formed not in solid rock, but in a 300 foot deep formation of alluvial deposits, an unconsolidated mix of clay, silt, sand, and gravel that eroded from the Rocky Mountains. Without knowledge of what, if any, subsidence mitigation was required of site developers before permitting them to construct housing above that or other abandoned mines in this area, the question that looms is, what is the threshold of subsurface disturbance that, if exceeded, causes subsidence that results in structural damage to homes built above those abandoned mines? If the town owns the mineral rights under mined areas, and as we've been told, that ownership gives the town the right to ban fracking in those or other locations, then I urge each member of this council to vote against any further lease or sale of the town's mineral rights.

Thank you.

Thank you.

Next, James Floyd.

Good evening, mayor and council members. My name is James Floyd. I'm a local resident outside of Erie Proper. I'm here tonight in support of the town Erie moving forward and selling its unleased mineral rights to SM Energy, also known as Civitas. Let's be clear about the situation. The Draco wells are already approved and are going to be drilled. This is not a question on if development happens. It's a question of whether the city of Erie participates in the value or walks away from it. The town if the town chooses not to lease or sell, you are not stopping development. You are choosing to receive nothing.

There is real substantial compensation being offered and additional safety measures in place, and I believe the council has the obligation to disclose those terms immediately. The people of Erie deserve full transparency on what is at stake because of because this revenue could have meaningful impact on the town. I'm also here on behalf of Bluebird Energy Partners, a local company. Last year, Bluebird leased eighty minute net mineral acres from a local Erie family. If the town's minerals are not included in the Draco wells, there's real risk that this family could be excluded could be excluded from the pad as well, putting $68,000,000 in future revenue at risk to that family.

So this this decision has real consequences, not just for the town, but for local residents. Again, this does not stop drilling. It only determines whether Erie reaps the benefits or not. I urge you to act responsibly, be transparent with the public, and move forward with selling these mental rights. Thank you.

Alright. Thank you.

Next is Emily Brecht.

Do we have the right person?

It's her. I'm Emily Brecht.

Okay, just making sure.

Happens all the time.

Try to be really fast.

My name is Emily Brecht. I live in Erie at Brennan By The Lake. My neighbors and I live directly over the path of Draco's wellbores. And if the packets we've received by courier from Cibitas are any clue, Cibitas will drink our milkshake, whether we consent or not. We will likely be force pooled. We don't have a choice. You do. And I publicly ask, no, don't do it. Do not lease our town's mineral rights. Don't give oil and gas more, even more, of a foothold in Erie.

Your constituents are asking good questions about the consequences of any deal. They're asking whether there's a conflict of interest with your hired consultant. In response, we get hand waving. We get just trust me. We get shouted down in online forums that there's nothing to see here.

Well, I'm not sure if you're familiar with the Streisand effect, but the more you try to suppress information, the more it seems like you have something to hide. On March 10 I know this was sort of covered, but I want to say it when the public first questioned hiring the recent COO of Civitas to negotiate with Civitas, council member Bell insisted that Matt Owens his name came from staff. It was a recommendation by staff. The council had nothing to do with it. He said nobody personally advocated for them, nobody on counsel.

I just want to make that perfectly clear and transparent. Today and April 2, Mayor Moore clarified that Matt Owens reached out to him directly, and then he was passed on that information to staff. If this was a Q and A, which I wish it was because I have questions, I would be asking what story is true. That was clarified today. I would say it's a warning to not clarify things that are not true and double check when you're being transparent. Other questions are there any unleased town owned lands in the path of Draco's planned wellbores? If so, if the town

I have

more questions. I'll ask you later.

All right. Sounds good.

Okay. Thank you.

Next, we have Steve I don't know how to say your last name. There you go. That's you.

Good

evening. Thank you, Town Council, for allowing me the opportunity talk about the Draco project. My name is Steve Hoeksein, and my wife and I are new residents of Erie. My background is in the sale of water and wastewater treatment chemicals to industrial mining and oil drilling applications. I believe we should all continue to be completely against the Draco project for the following reasons.

Well blowout risk can never be completely mitigated. For example, the Chevron well blowout in County, a blowout which spew significant amounts of oil, contaminated water, and gas into the air and onto the ground 2,000 feet from home. So I have seen this. The Draco project will use an average of 6,000,000 gallons of fresh water per day. It's the same as Erie.

None of Draco's wastewater will be reused or recycled. If there is leakage from wastewater piping, it will be an EPA reportable spill as drilling wastewater is very highly aquatic toxic toxic. Total VOCs estimated to be emitted from the site will be 88,000 pounds, 44 tons. This is high for a neighborhood 2,000 feet away. We'll continue its air monitoring and reporting back to Erie be in place.

The project will drill 7,000 feet down through aquifers. Will water in these aquifers be monitored and tested to show Erie that contamination is not occurring? The project will laterally drill for five miles under Erie neighborhoods with a number of existing wells and in between those neighborhood.

Twenty seconds.

I don't see how the complications with existing wells will be completely eliminated. Odor is also an issue. How will that would be regulated? Lastly, if the sale of minerals Erie's mineral rights give up one iota of Erie's oversight and control over Erie's ability to improve the safety of the Draco project, we should be completely completely against against the sale. Also, no testing, monitoring, and reporting requirements of Civitas to Erie should ever be relinquished.

Thank you. Alright. Thank you.

Next speaker is Lori McAllister.

No? Lori McAllister. No? I see.

She's on mute.

My name is Lori McAllister. I am a resident of Erie, and I believe that it's incumbent upon the town council and the mayor to ensure that our residents understand the answers to the questions we are asking and what the costs and consequences are for moving forward. I would like to see the results of monitoring and oversight being required to be reported to the CECMC and Boulder County and Erie in a timely fashion. And I want residents to understand what happens if there's a problem. What are the consequences?

Not just informing Erie, but what are the penalties for a problem with our air or our water or our odors? And who pays for monitoring and oversight? And who is currently required to be notified of monitoring results. And second, this project has inherent conflicts of interest. Town council and the mayor, Alameda mineral advisers, former Civitas Resources COO Matthew Owens, and any other future advisers and consultants should be required to reveal and divest themselves of any financial interest in Civitas, Draco, and any other gas and oil entities operating in Colorado.

Those with conflicts of interest should be required to recuse themselves or not participate in negotiations or decision makings. I would like to see Erie make public every expenditure made

Twenty seconds.

Any advisers. And lastly, I wanna tell you that we were very keen on moving to Colliers Hill until I looked at the maps of oil and gas. And so I believe that understanding the effect on housing values is more complex than council on the mayor have represented. Thank you.

Alright. Thank you.

Our next speaker is Ben

Good evening, town council. My name is Ben Hemphill. Hemphill, and I live in District 2 Of Erie. I wanna speak tonight on my history of communication between me and the company now known as SM Energy, formerly Civitas. In October 2024, I submitted a question through Civitas' web form asking about their experience drilling five mile long laterals under highly populated areas. I received no response. I raised this publicly in October 29 at the ECMC hearing at the Erie Middle School. Still nothing. After the 11/13/2024 hearing, I sent a direct email and discovered that the email address on their own community website was never properly set up. It bounced with a delivery error.

I tested it again today, and it still bounces. It took me escalating directly to all of the ECMC commissioners before SM Energy finally responded to my relatively simple question. That's a communication track record of the company you are now negotiating with on our behalf. Based on the 03/26/2025, ECMC hearing, SM Energy has until 05/13/2028, to complete these wells. At that hearing, SM Energy stated that three years was already aggressive, and there's only two years left.

We all know what

happens when projects get rushed. By leasing or by, I selling the town's mineral rights, you would be incentivizing that rush. From my understanding, the town has no obligation to sell our mineral rights. And then on local oversight, the Draco pad was deliberately sited just outside of Erie's boundaries, which means the town can place its own monitoring equipment without any input from SM Energy. If that if you continue down the path of selling our mineral rights, I urge you to have a provision that the town of has authority to stop work for any reason for any length of time. Monitoring without a stop work authority is just watching. It's not protection. When you go to vote on this, please remember you represent the town and the residents of Erie, not the shareholders of SM Energy. Thank you.

Alright.

Thank you.

Our next speaker is Mike Foote.

Is he alone?

No, he's not. Let me double check. He doesn't list him online, but let me double check here. Next speaker is Siobhan Blades.

May I ask a clarifying question before I begin my time? I just want to clarify before I start my time that you'll Yuri would get 25,000,000 if we sold our million rights. Is that about an accurate estimate?

We we have not announced any numbers. I'll look to our attorney.

Just said that. Okay. So lawyer. So I guess I can start my time now. I have some questions I was told was given to ask, but I see that the oil and gas industry has already shown up. I don't if they're paid. They were during 01:12. But Cola has already started off by not telling me the truth. I asked him if he had any association with oil and gas, and he said no. Turns out he's the lawyer for mineral rights owners.

Anyways, I'm not here to debate the health and safety or stopping Draco. We know that's not possible. I'm also not here to have straw man arguments accusing the council of approving Draco. That's not what happened. What people are concerned about is the secrecy for six months before it was brought to the council, and then another three months before the town found out about it through reporting. So that's one of the bigger concerns. As far as how health and safety it is, there's 400 and leaks a year, 450 leaks a year with dozens of explosions a year. So, you know, oil and gas can tell me how safe it is all day long. The other issue is there's 2,000 orphaned wells in Colorado, of which what did I say? 239 in Erie.

So we're gonna cap 22 plus 16, and I believe there's, like, 50 or 60 in the pathway of Draco that are gonna half of them won't be dealt with. So there's no logic in selling mineral rights. I had somebody very wise tell me only a fool sells their mineral or water rights. Here we are, Erie. So those are some of the bigger concerns, but the questions that I was asked, one was already answered, the council has not met their terms of their contract for a competitive bid and solicitation process. Wondering if I understood that quote. Correct, that's what it sounded like. Do you have any legal sign off that a competitive business solicitation process was held and that it met the obligations of the council's contract? Do you have his legal sign off that Owens was fully vetted for any conflicts of interest? I don't think we have that.

Do you have any sign up from Sabida's competitors that they were fairly notified by Owens on behalf of the town of the council town of Vireo, the council, for a competitive bid? Do you have a sign off from the Sabita's competitors that they were okay with Owens running an evaluation of their bids? Two of these questions have already been answered. No. We do not have those. So I do not think it's wise to continue to move forward in selling the mineral rights just for roughly $25,000,000.

Alright. Thank you. No. Please.

Just just remind everybody that there are people here speaking on all different views and just out of respect for everybody speaking I don't want to stop the meeting so thank you for understanding that

Our next speaker is Casey Hedrick.

Good evening, town council. My name is Casey Hedrick. I'm an Erie resident. I wanna echo something that somebody else said, which is just the format of this is somewhat difficult and that we got the information. I think you all have some some information that wasn't purview tonight. It's just difficult because we can't ask questions. I have a lot of clarifying questions that might inform my comments, but we're not able to ask those tonight. So just some feedback on that. When the Draco project initially came up, the community came out in droves to oppose it. And there were so many people that said, we do not want this, and yet the decision was made, for us by the state.

So, understandably, how disappointed we all are in that. And it seems like this mineral rights might be our only opportunity to alter, deter, delay, blunt this project. And so I would urge the council not to sell mineral rights. In addition to that, I'm really worried or there seems as though there some sentiment from the council that is, well, if you can't beat them, join them. If we can't beat this project, let's make money from it.

Or if there's already drilling happening in our community, let's just keep that drilling going. That's not the right attitude of what I think our council should take. This is about the health and safety of our children. This is about the health and safety of our residents. When we have our children's hospital citing reports about how kids get sick, how vulnerable health populations get sick the closer that they live to drilling sites, then it shouldn't be something up for discussion. And it shouldn't be something that we should monetary benefit from. Because I think then the question is, how much money is worth a sick kid? And I don't think that that's something that this council should have to answer. So please don't sell our mineral rights. Thank you.

All right. Thank you.

Our next speaker is Emily Ralph.

Hi,

my name's Emily. I live in Erie in Boulder County. I just would like to kind of add my voice to what Casey just said, Carol Campbell, and also Steve Hossein. I've heard a narrative as I'm sitting in this room tonight from the council that kind of says, well, the Draco pad's already done. We're mitigating as best we can. We're trying to create this, I don't know, lemonade out of situation. We're not using any of Erie's water. We're monitoring air quality, all of these things. It's a really beautiful example of the lost cause fallacy, actually. But that's a different problem.

I would like to just state that the risks associated with this project are utterly unacceptable. We just experienced pretty much the worst winter on record for Colorado. We canceled irrigation or watering bans for our yards, like, two days ago, and yet you're proposing a project that's gonna take 6,000,000 gallons of water a day. And then you're saying, oh, but we're gonna get wells plugged and abandoned. Except I learned with a quick Google search that there's a well in my neighborhood that's plugged and abandoned where the soil has recently, within the last couple years, had to be removed.

My main question is, where did that soil go? But also, we're acting like that's fine. I mean, any addition of greenhouse gases to our environment is detrimental, and yet here we are trying to say that we can make this better. Alameda Minerals is supposedly incentivized to work with us because they'll financially benefit. But they're not necessarily going to be sitting here. They're not going to be standing next to their sick child's bedside. I mean, is there a plan? Is the state of Colorado going to cover Medicaid for every child that gets leukemia in association with this project? Is the town of Erie is Civitas? Who's gonna help us?

We already have an issue, which is why this contract exists where we wanna control tracts of land in and near the town of Erie. We're negotiating with the same company that's trying to buy these mineral rights, and yet we are looking into selling them, albeit they're underground rights, but we're just putting ourselves in the same position over again. You're not going to be the council for the town of Erie forever. Don't sell these mineral rights. Don't make a decision that affects future generations. Thank you.

Thank you.

I understand that Mike Foote has returned to the meeting.

Is Mike here?

Mike Foote? Oh. Mhmm. Thank you.

Good evening. Members of council, thank you very much for calling me up. My name is Mike Foote. I'm, I guess, maybe three or four generations ago was your state senator here. And I just mentioned that because I have a bit of a history with oil and gas mineral leasing policy and forced pooling. Probably ten to twelve years ago, I first came across this issue of forced pooling and leasing. And frankly, I couldn't believe it. You could have 100 middle rights owners, 99 say yeah say no. One says yes, the other 99 have to lease. That's how the policy was.

We ran several bills to try to change it. Ultimately, that did get changed in 2019 to where there's a 45% threshold. But still, there was this issue out there about towns being required to lease their minerals against their wishes under the force pooling statute. A number of bills and efforts came and went. And finally, I think, as you know, in 2024, there was a successful bill, not mine. I was out by then, but a successful bill that was passed that gives towns a say. And that's where you are right now. The philosophy is that as town council members, you all understand what's best for the community. You hear from the community. It's like any other kind of development.

Right? It's basically like as a shopping center, residential development, anything that goes on the surface. It's the same kind of situation below surface, where you all can listen to the residents and make a determination about whether or not you want to do it. This was a hard fought, I would say, provision in the law over the last eight to ten years. So I just would urge you to take advantage of it.

And if you determine after hearing from all the folks in Erie that are commenting before you that this is a bad idea, that's not what they want, then I would urge you to follow that and use the authority that you have and the local control that you have to say no. There's nothing in the law anymore that says that you have to say yes. The industry doesn't like that, but that's the way that it goes. I would urge you, in my opinion, to say no, because this is something that puts Erie in business with the oil and gas industry for a long, long time if you say yes. I don't think it matches the tenor of this community.

I think personally, from what I've heard, there's a lot of people that are opposed to it. And I just hope that you'll use your authority that, as I said, a lot of people had to work hard for to be able to say no to something like this. So I'd ask you to say no. So thank you very much for hearing from me and also other members of the community.

I appreciate it.

All right. Thanks.

Our next speaker is Amy Becker.

Good evening. My name is Amy, and I have lived in Erie for eleven years. I am also an oncology PA. And so for twenty five years, I have taken care of cancer patients. In my opinion, both as a citizen and as a medical professional, we should not expand the reach of oil and gas in our town.

For our safety, our health, and wellness, we should reject this offer. For as long as I have lived in Erie, there has been a pushback against oil and gas. And now why would we say that there is a price that could be paid for our health, safety, and wellness? That's hypocritical, and it is negligent. I was actually surprised last week or in a couple weeks ago to learn at the mayor's address that Erie was initially successful at pushing back against Draco.

Initially, we our resistant efforts were successful, and it wasn't going to happen. But the greedy and self serving oil and gas industry forced our hand. Knowing how the town felt, felt, they still pushed forward and forced our hand. And to me, that initiative alone should have been a nonstarter for the council. I urge you to say no and reject this deal.

I do not think that by selling our mineral rights that this will give you additional leverage to hold them accountable. I think you need to use everything that you have to hold them accountable anyway. And as the speaker before me just said, I think that this will extend our relationship with oil and gas when we have been trying to get them out of Erie as quickly as possible. And so I, again, would urge you to say no to this deal.

All right. Thank you.

Our next speaker is James Salvaggio.

Okay.

Is James online possibly?

No, I don't think he is. Next speaker is Stephen Gaines.

Good evening. Thank you for hearing some of us this evening. My name is Steve Gaines, and I do live in Erie. And I just wanted to mention this repeat some of the things that have been said, but perhaps say it a little differently. A municipality is a family. It's a collection, a group of homes, businesses, but most importantly, people. And the current board should not sell assets owned collectively by the community. Leasing them in a short term might allow us to still regain some benefits and have some control now and in the future. My preference would be no sale or no leasing at all. But if we do have to go forward, let's make sure we're going to have control over our destiny in the future, not just today.

Selling a community asset, I think, also should require a community vote, not just a decision of our elected officials. So that's my my thirty years experience in municipal management and government. All the municipalities I worked in, we had a set policy that anything regarding dissolution of assets required a community vote. I apologize for my ignorance. I don't know what the policy is here.

And then I just had a question I wanted to pose. I was unclear what the gentleman spoke to, and he said 3.5% unleased in the target area versus 96% leased. If that's something that's addressed during other comments later, that would be helpful.

All right. Thank you.

Our next speaker is Elliot Russell, and he is online. So hang on just a second.

Hello. Can you hear

me? Yes.

Yes. Perfect. This is Elliot Russell. I am a concerned resident of Erie, in Boulder County. I feel like residents should be provided a map which delineates these 103 acres of unleased town minerals that is the topic for tonight.

It's kinda hard to understand how tonight's informational meeting didn't include, like, this presented map, But it might have sounded like there was some legal issues or some research still occurring, so, kinda concerning that it might be premature to present that information. Quick Boulder County assessor search shows the town has quite a bit of surface property within the spacing unit. I'm not exactly sure how that relates to mineral rights because most times surface properties have severed mineral estates, but still, curious to understand where these minerals are at. If the town hears what it's what seems like the majority of residents' concerns are and does not lease or sell the minerals, then Draco must avoid the town's minerals, which could substantially change or reduce the size of this project, to ensure that they do not have a mineral trespass through either boring through the town's minerals or even draining the town's minerals from nearby, hydraulic fracturing. This is critical information that residents, the town council, and the mayor should all be presented with in a public setting.

With this information, the town will be, will better understand its leverage in these negotiations. I thank council for the opportunity to speak and, again, request additional informational sessions be held once better spatial, presentation materials are provided to the public. Thank you.

Thank you.

Next speaker is Tanya Sharp.

I'm Tonya Sharp. I live in District 2 Colliers Hill. I came over to speak in person today because I think this is important. I wrote down five speaking points. I won't be long.

But sorry to say I was aghast when our expert who presented was not aware of any other company that did this other than Alameda Minerals. When I tried to find Matt Owens online, I could not. I found four or five other consulting companies that did this work. The only thing I found on Matt Owens was his LinkedIn profile. I'm a little embarrassed about the processes going through for Erie right now and worried that we're not doing it with due diligence and with what we could could be receiving.

So that's point one. Erie has doubled in population since the last time we sold any of our mineral rights in 2012, and the demographics have changed. What we're hearing now are people that are opposed. We went from a town of 18,000 to almost 40, and I would want those voices to be heard. Conflicting information on property values.

We had one person say that property values go up when wells are abandoned and kept. She did not say property property values go up when drilling occurs. We are all see already seeing an adverse effect on sales in the Westerly development. They've had to put those on hold and move to other areas. Who knows if they'll come back or or if the developments in that area will ever, you know, come back or sell at what they should be selling for.

Twenty seconds. The last point I have is this is an unprecedented project, and, we have an opportunity to control it by not selling our mineral rights. Drilling five miles under in the project, the the the scope of this has not been done before. This law that was just put in place has not been pushed before. So please take that into account. Thank you.

All right. Thank you.

Our next speaker is Janet Miller.

Hi. Please excuse me if I'm being simplistic here. I have lately come on this wonderful creation of Draco and trying to play catch up. Have we done our own mineral testing and valuation on the open market, or are we just letting them decide what its value is? Number two, the used water that they use in drilling, is it potable, recoverable, and reusable?

Has anyone evaluated the effect of the overall water table long term? I know most of you folks who live in HOA communities all have community water. And I understand that community water doesn't use our local water table. But that's not true of 100% Erie. And we have a lot of wells in Erie. And if our wells go dry, it's very, very expensive. So I'd like you to just evaluate it and keep it in mind. Thank you.

Thank you.

Our next speaker is Charles Dusha.

Good evening. I'm an Erie resident. And my history is in risk management and health care.

Will you just state your name

and Oh, sorry. If you're

in lot of Erie.

Yeah. Eck up.

Thank you.

I'm Charles Doucher. I'm an Erie resident. My history is in risk management and health care. And I feel that we are not using good common sense to protect a precious asset for this community. This is a quality of life issue, as you've heard from so many other people. What I heard from this council is, I was unaware of this. I was unaware of that. It sort of smacks of, hey, we've got this sale going on, and it's for the next fifteen minutes. We'll worry about the details later. That causes me to be very concerned.

This is a quality of life issue for all of us. We need to protect it, preserve it, and take care of our community. This is a wonderful community to live in. And as the mayor pointed out, reiterate his question, why do we need Draco? The answer is not here, not how, not now, not ever. Thank you.

Alright. Thank you.

And our last speaker is, Jana Jacobs, and she is online. Jana, you should be able to unmute and speak.

Hi. Good evening. I I my name is Jana Jacobs. I live in Erie, and I wanted to make a couple points. One is it seems that the council is being pushed to make a a quick decision.

I think that's because the city's mineral rights are very important to the Draco project, and it is on a timeline. The city enjoys a very special privilege as a local government that owns mineral interests, and it is a priceless privilege under Colorado law that you cannot be forced pooled. The community of Erie came out in force against Draco, and so the idea that the the council would turn around and say that it's inevitable, we'll just lease our interest and give up, is is truly appalling. And I think I hope that you'll will give it a serious second thought. It's difficult to put a price on what you would be selling because no other mineral interests in Colorado enjoy the privilege that the city does in regard to its mineral interests.

It's far more than 3% when it comes down to it. It is it is worth much more than that to this project overall. Thank you.

Alright. Thank you. And no one else online?

I have no one else.

Alright. Is there anybody else in the audience tonight that would like to address us? Alright. Okay, come on up.

Name is Josephine Stair. I'm an Erie resident. The one thing that I have not heard is concrete doesn't last forever. So a capped well has a lifespan of thirty to fifty years. So for the wells that we are capping, we're going to have to do it again, not to mention the wells that aren't capped. And furthermore, with the bore that goes straight down through the water table that they're putting in concrete, that doesn't last forever. So I wonder what the actual long term consequences are, because that has not been addressed by anyone at this point that I've heard of.

All right. Thank you. Anybody else like to address this tonight?

All right. Then I'll bring it back

to counsel. We'll sir, would you like to come up?

Bill Rush. Hi. I'm Bill Hughes. I live at 1159 Elkhorn Drive. Okay. But I have worked on, for the last twenty years, half of those properties, doing architecture and planning work. And I was tied into Draco. It wasn't Draco. It was some other company. And we had three sixty acres listed there. To develop that whole area was going to cost millions of dollars. We worked with the city for years. We worked with the engineering department trying to get some stuff done. We couldn't do it at the time. The market wasn't there.

Draco came along. Wasn't Draco? Some other company. Basically, they said, we can do it. If we could buy a little 20 acre piece, we don't have to put all those improvements in. So now we've got a little piece sitting there like that. We don't have finished streets any place around there. We don't have sewer. We don't have water. We don't have anything up in there.

If if the energy companies could somehow be part of paying for those improvements, do you know what it costs to put in sewer and water? Probably half of what houses cost today is sewer and water and septic, name it. But energy companies don't have to do that. And that little piece is right there because it didn't have to require any improvement. And the public works department said, well, heck, you can do that because that's just a little industrial piece.

In the middle of nowhere, we don't need sewer. We don't need water. Well, here it is ten, fifteen years later. You're stuck with that little piece there, and it's setting a bad example of what else is happening. And then to build anything decent around here costs you a fortune. How can we get back those dollars that that those people would be part of it? I'm not too sure what it would be. It would take a lot, but it's a huge cost anymore. And the problem with that one is in order to get the sewer line, you got to run the sewer line to the east, down along the interstate, back up the interstate and across and back over. These are huge costs.

Somehow, and that company is sitting there using it. They're not they're not paying for any of that. But it did comply with the zoning at the time. And it's sitting there now with with it doesn't quite touch the road, so they didn't improve the road. You can see there's a little island in the middle of that.

So twenty seconds.

It's it's got to be fairer somehow, a A fair way to get the city these middle countries should know in no way what they're they're really mooching off of cities. It's terrible. So Thank you.

Alright. Would anyone else like to address this? Yes.

My name is Laura Brecht, and I live in Erie by Brennan By The Lake. And I didn't prepare anything but I want to say that I agree with so many of the opinions that have been expressed this evening very well. And by sitting there and not saying anything, I didn't want to give the impression that I thought this was great and I was in favor of it. I am absolutely not for many more reasons than had been said. So I just want to say that.

Thank you.

Alright. Thank you.

Alright. We're gonna bring it back to the council. This will just be our closing remarks, but what I will say is that if, and that's still a big if, if it gets to the point where there is an agreement in principle, then there will be another date that is set where we'll actually have a hearing and be able to share much more information than what we were able to share at this point in time. Alright. I'll see if anybody would like to start.

Sure. Councilmember Hoback.

Thank you. So tonight was partly frustrating because as much as you, I hate the dark veil of executive session that we have to hide behind. I understand the need for it and appreciate it, but it is frustrating. But this has been a very informative and eye opening four months for me. Above all, I think it has highlighted the deep rooted concerns of town residents towards oil and gas mineral rights.

And not once have I heard anyone indicate there's a price at which they would be willing to compromise on those concerns. I do have several concerns. One is about how the relationship of all the parties involved came about. We found out a little bit more about the initial contact and council involvement tonight, but I have concerns how the the contracts got approved or yet to be present and did not go through a town coordinated RFP or other competitive bidding bidding process as called for in purchasing policies. I'm concerned that this could open up the town to challenges from the competitors of the chosen vendors as well as concerns from auditors.

Needless to say, there are a number of contractual dark clouds hanging over the deal, potential deal. Like many of you have voiced, I have serious concerns about conflict of interest when we hired a c suite executive, the former chief operating officer of a buyer, to negotiate on our behalf as the seller on the back of what is a very lucrative contract for his company, particularly when he introduced himself just weeks or months after the potential buyer contacted us, that certainly indicates to me that he was set on their behalf. I'm concerned that we have not investigated conflicts of interest and any stock or other financial interest he may have as a result of his former employment. Same person who presided over creating the Draco pad Erie fought so hard to keep from being approved. His former employer reaches out to Erie about its mineral rights, and sometime later, he happens to reach out.

That is a heck of a coincidence. Maps of the Draco drilling area, and therefore the drilling and spacing units, which is the basis for final drilling approval by the state, spans westward from the approved pad straight through Erie all the way to Highway 287, and drilling bores follow straight lines. The vast majority, if not all, would go directly under and through Erie, hence the concern of many residents. There's not a feasible means to dodge all the properties owned by the town. That was why I asked about subsurface trespassing.

Using the town hall as an example, the town owns not just the surface rights that we sit on, but the soil beneath it, the bedrock beneath it, all the way down. It doesn't matter if it's five feet or five miles. And that includes the mineral rights, unless they are explicitly severed contractually in a sale or something like that. Talked about forced pooling. Well, there are a couple of other laws that impact us.

And I'm not a lawyer, but I've researched it pretty heavily. We will need to discuss this with our oil and gas attorneys when the time comes in executive session. But as I understand it, specifically since 2024, there's a law in Colorado. Other companies cannot drill through our land to reach other people's mineral rights. So I'll be a bit of the voice of the wilderness and say, yeah, we can impact Draco despite the narrative that's been making its way through social media and tonight's presentation.

The initial approval of the Draco pad was not a rollover and play dead moment. In fact, we should be fighting harder than ever. The inability to drill through eerie land without owning its mineral rights can be a major, major impediment to the ability of Draco to drill much of its planned area, currently approved or not. In fact in fact, without Erie rights, they are required to demonstrate to the state an alternate route of accessing hundreds of currently isolated parcels. This renders the 2.8% or 3.5% figure as rather pointless because large percentages of non Erie owned acreage are taken out of the equation simply due to lack of access.

It's not enough just to tally up the town's numbers. This is the power the town of Erie has, without question, to seriously impact the extent of the Draco pad, possibly to the point of making it financially unviable for the operator. We owe not only fiduciary duty to our residents, but health, safety, welfare, and direction received from them. Finally, irrespective of all of this, without a comprehensive map, we don't even know if open space land is being included. But we also have no indication that it's not being included.

This is possibly the pinnacle of importance because it cannot be included. Mineral rights, by definition, are real property rights. Article 15 of our town charter provides for general authority for council to sell real property. But article 11 explicitly restricts that authority when it comes to property designated as open space. According to the town charter, sale of real property rights must go to a vote of the residents, as this should have anyway.

Council does not have the authority to sell them. That takes open space land and parks completely out of the deal unless we vote on it. Thank you all for showing up. You have heard over and over and over again that you are being listened to. You have all shown up and let us know your opinions. You have emailed your preferences on selling the town's mineral rights at a rate of approximately three to one against the idea. Stay tuned to find out if your make which matters and will remain uncompromised. Thank you. Alright.

Thank you. Council member Pesaromelli.

Yeah. Thank you, everyone, for showing up, and we listen. It's over and over the same thing. And four members of the council want to look at finances, money, and I'm on the other side. I am for the health and safety, and I'll remain uncommitted sorry, committed to keep that going. And I urge everyone to stop this sale.

Okay. Councilmember O'Connor?

Thank you. I am have been frustrated by this process, but hopefully, if something does come forward, we will have enough we will be able to give enough time, and we should. We need to give enough time for the community to review this information and to make provide more informed feedback as to what is being proposed. So if it does move forward,

I

look forward to seeing those maps and all the details and getting down to what is going to either make this deal that should seriously be considered or a deal that should not be seriously considered. So that's it for me. Thanks.

Alright. May present?

Yep. Thank you. Thank you all for coming out tonight. Look. There's this is a very strong issue that that I I know there's a lot of input from the public on this. My job is to tell you the truth and not to tell you something that you want to hear. And what you heard about this impacting Draco is 100% false. And I can tell you that we were told that. So this is a difficult decision. I agree with everything Councillor O'Connor said that we need before we do make a decision, we need to have it before the public.

And tonight was an effort to try to show you as much as we possibly could. We have we need to protect our negotiation process. We need to protect attorney client privilege. So there are certain things we don't talk about because if something considered attorney client gets disclosed to the public, well, we have to disclose all of it, including the people we're trying to negotiate with. And that puts us in a very weak position.

I will just say that my house is not in the the Draco unit, but on the map, they're coming straight under my house. So this affects me as much as it does anyone else in here. So I think we're all residents up here as well as decision makers. And that's something we all keep in mind with this. The last thing that I'd say is just this is a debate on whether in my mind, if this happens to give you an example, the City of Broomfield spent an awful lot of time and energy going to the ECMC trying to fight coyote trails.

Coyote trails happened, and they got nothing back for it. And the oil and gas industry kept on going. If you want us to be martyrs up here, we can certainly do that and we're going to take public interest to that. But

to

my old friend, Tom Van Loan, who was formerly the mayor of this town, when we annexed the landfill and had a philosophy. And it was, if you're going to dump trash in my backyard, you're gonna pay me for it. And that is the mentality that I am going into. It's not it is not to expand Draco. It's not to expand oil and gas industries, and it's not to despite what any rumors have been out there, I'm getting nothing out of this.

Nobody up here is. If we have a conflict of interest, we are required to disclose that before we vote on anything. I don't own any mineral mineral rights. And I truly don't own any here. And as I said, I'm not even in the Draco production area.

So this is a difficult thing because when Draco came up and I will laud our Environmental Services Director for the work that he did going before the ECMC because we were very realistic about what we were going to be able to do with Draco going forward. And he went and he argued on the town's behalf to make sure that we got as much as we could to protect the public. And one of the things, it's not just money to get money here. The the the potential revenue out of this, can be used as a stream of revenue source for our Environmental Services Department to help ensure that we have funding do air quality monitoring, to do those sorts of things. And that is something that's in the forefront of my mind when I'm looking at any sort of deal.

And the last thing I'd say is that it does bother me that we have an oil and gas company owning parcels of land that are strategically important to the town's future. And we want to make sure that we are able to do with that as some of the things that we've done around here, new rec centers, we need expansion to our laws public works facility. We need these things to support the public. And they're not interested in us buying property from them. And that's a lot what led us down this path.

So I hope that we can soon have a full package of what is before us, but we don't even know if that's going to happen and this may fall through. And if it does, then we will disclose all that information.

Right. Councilmember Baer. Thank you.

Thank you all for coming out tonight. I want to address a couple of things in public comment, and then I'll read my statement. But we heard repeated requests for a map, and I am also very interested in a map. And I feel like we don't know really what we're talking about, to Councilmember Hoback's point about where these minerals are located and also letting the community know where those minerals are located, I think, is really, really important. And I look forward to that coming out.

I'm happy to hear that we're working on that. And hopefully, that'll be out soon ish at some point. And then also, we heard from our energy and environment director that the town will be deploying air quality monitoring in Westerly as part of our plan. We also know that as a condition and approval, there's additional air quality monitoring that's included in Draco. And those things are happening without the town considering selling our rights.

And then the additional 16 to 17 wells that will be plugged and abandoned are not additional. Those are wells that are slated to be plugged and abandoned. And what is on the table is expedition. So it could happen faster. It could happen all at once. But I just want to be really clear about that. Because when we talk about health and safety measures, those are set by the state. There are not health and safety measures that will not be enforced if Erie does not consider selling our minerals. So I just want to be expressly clear about that. And then Coyote Trails I'm force pulled by Coyote Trails.

And when Civitas came to the commission, the ECMC, a couple of years ago because they wanted to expand Coyote Trails, I went and knocked on doors in my district and in my neighborhood to make sure that my neighbors knew that this was going to happen. And I was joined by council members from Broomfield. It's not their district. They don't live here. But they came and knocked doors with me.

And we talked to homeowners and just said, we want you to know this is happening, and you have rights. And you can come to the commission and speak if you would like to. The commission denied that expansion. Sabotage sued the state, and they lost. So I just want to highlight that as a victory.

So, yes, we have to take what we can get when we're fighting this. But sometimes it can feel like a David and Goliath fight, but I just, spoiler alert, want to tell you who won that fight. So don't lose heart. We're in this together, and let's keep going. I want to encourage you to tuck two terms in your back pocket real quick, the dominant mineral estate doctrine and implied right.

I have been at regulatory tables advocating for health and safety and oil and gas development through state laws, policy, and rulemaking for the last seven years, from the legislature to legislative committees to regulatory bodies, including the Air Quality Control Commission, the Air Pollution Control Division, the Colorado Oil and Gas Conservation Commission, which is now the Energy and Carbon Management Commission, and also the Colorado Department of Public Health and Environment, and the Public Utilities Commission, to joining neighbors and community members right here in Erie when we rewrote our chapter 12 in our UDC to update oil and gas regulations for the town, applying the strict provisions that were afforded us when we passed Senate Bill nineteen one hundred eighty one that protect health, safety, welfare, and the environment. I say all of this to demonstrate that I am not new to this conversation. There's a reason Dreyco is just outside town limits. Erie's regulations that prioritized public health and safety wouldn't allow it to be approved next to a water source and planned school site and neighborhood. I joined the community and staff during the multiple hearings for Draco at the ECMC here at at the Erie Middle School and also at the commission.

The sentiment from the community was clear. No further drilling under our neighborhoods. We heard data, facts, personal stories, fear, concern, much like we've heard today. In March 2025, in a letter that I sent to the ECMC, I said, a site that drills beneath the entire width of our town with unproven technology as fast as possible, beneath 10,000 homes already existing within the drilling and spacing unit, with 72 more homes planned within the 2,000 foot setback near water, the Fraco Ditch, and in heavily cumulatively impacted community, next to a planned elementary school important to serve our growing community, creates enormous impacts that are impossible to justify. As I said in the previous November, this application demonstrates that our protections for people fall short.

With the proposed five mile laterals, the distance between sea level and the tip of Mount Everest, we cannot presume to know what all of the risks to the good people of Erie are, and therefore, we have not done everything to ensure their safety. I encourage this commission to pause this process, consider the cumulative impacts of air quality and water impacts. With those considerations, this application should not move forward. I humbly ask that you demonstrate your care and concern for the good people of Erie and our beloved community. Please do not volunteer us as test subjects for this unproven drilling.

You can stand on the commission's rules to deny this application. I'm asking you to do that. Now, know that on March 26, the commission voted to approve Draco. They did so with the inclusion of several conditions of approval requested by the town and the neighborhood developer for added protection at the surface level, including and these are conditions of approval that are not affected by the town of Erie's sale of mineral rights or not. They include preproduction completion by 05/13/2028, with every effort to be completed by October 2027, continuous air quality monitoring around the pad and provisions to immediately address negative air impacts, plug and abandonment of 22 wells, 18 facilities, and all of the associated infrastructure in town, and increased monitoring for a particularly problematic six concerning wells that would be included in the DSU.

I think it's important to know where in the DSU these are located and if they could be impacted by the cell or not of the town's minerals. And importantly, paving County Road which is important for keeping vehicle traffic off of County Road 5 and reducing vehicle miles traveled. All of those things are happening. Erie remains approximate local government, and that's status given to us by the state. The state sets the floor for safety regulations.

The aforementioned conditions of approval are above and beyond that floor. To imply there are safety regulations that will go unenforced unless Erie sells its minerals is misleading. Community, I hear your questions and your concerns, and they are valid. One of the questions that I've heard is that can we prohibit a bore from passing through our subsurface estate? So sorry.

I have to switch pages. So and I believe the answer to that is yes. If we don't sell to SM, we'd need a subsurface easement to pass through our subsurface estate, And that would prevent them from reaching minerals in another tract. This adjusts the dominant mineral estate doctrine in favor of residents who don't want their homes to be drilled under by preventing SM the possession of implied right. No operator has an implied right to pass through Erie's subsurface to access minerals.

And I believe process is that if Erie remains the the property owner, we don't sell our mineral rights, then an operator would have to come to the town for an a subsurface easement to drill through our mineral estate. In its regulatory capacity, we may have the authority to regulate surface concerns and risks of a pass through bore. These are untried laws. So sorry, back. Further, with the new legislation that senator Foote mentioned earlier, Senate Bill twenty four one eighty five prevents the forced pooling and taking of minerals without the owner's consent of municipal owned mineral rights.

It prevents it. The town has new authority to offer protections for residents further away from the wellhead. The new law, among other things, states that it prohibits the commission, the ECMC, from entering a pooling order that pools the mineral interests of an unleased owner if the unleased owner is a local government that has rejected an offer. The mineral subject and the minerals to subject are within the local government's boundaries. It also says if a pooling order application proposes to pool local government unleased interest and the local government has rejected the offer to lease, then it requires the commission to deny the application unless the applicant amends the application to no longer pool the local government unleased interest.

So if Erie is the owner, we have the authority to deny a pass through our subsurface estate. So my understanding of these two provisions that the town has the authority to prevent an operator from drilling through our minerals and the ECMC is prohibited by law from approving a DSU that includes local government owned minerals when a lease offer has been rejected. So importantly, when we talk about whether we own 2.8% or 3.5% of the minerals in Draco, that matters less than where they're located. And let's see. So their location is key.

And in discussion, because of the two provisions I mentioned before, the town has the authority to prevent the operator from drilling through our minerals, and the ECMC is prohibited by law from approving a DSU that includes local government owned minerals when a lease officer lease offer has been rejected by local government. This is a complex issue, but I wanna note that the town has recourse here. We have authority as it relates to senate bill twenty four one eighty five that we've never had before. What is required is political will to use it. As I mentioned before, I'm not new to the oil and gas conversation and how it impacts our neighborhoods, our schools, our residents, our families.

The reason my why here, the reason that I am opposed to selling the mineral rights because I have sat with many of you to discuss your lived experiences and mine. And I have amplified the voices of impacted people at regulatory tables for years. When I voted no on the contract with Alameda Minerals in December, I said my principles are not up for purchase, and I mean it. I remain committed to amplifying the voice of my community. One of the important things that I have learned over the last seven years is that it is important to disentangle our budgets from volatile markets.

When portions of the town's budget rely on uncertain and diminishing revenues, it puts services and projects at risk. Also, when oil and gas revenues are entangled in budgets, it's nearly impossible to prioritize health and safety because projects and services rely on those revenues. The lived experience of impacted residents has virtually no chance to rise to a level of importance. It comes down to the almighty dollar every single time. We have worked hard to untangle our budget here in Erie.

We have heard from the community, and we should follow the advice of our community. We should listen and and do what you are asking us to do. This town should reflect the desire of our residents who we have heard loud and clear from for actual years. We should ensure sustainable revenue for our town budget that does not mortgage the health and safety residents. And that reflects their priorities that we know include a commitment to sustainability, health, and environment, both from the statistically relevant survey the town has conducted for more than a decade, as well as the snapshot questionnaire survey conducted last year as an effort from some on this council to demonstrate their commitment to hearing from the community and acting on those findings.

Thank you.

Alright. Thank you.

Yeah. Council Member Martellaro. Thank you. And and thanks, everybody, for for coming out and voicing your concerns. Appreciate your concerns and your frustration.

This process has taken quite some time. Of course, to do a proper job, negotiations typically do take time. I attended the Erie community meeting, with the ECMC in the middle school in 10/29/2024. It was great turnout, great community input, you know, show solidarity there. I also, listened to both the ECMC hearings on 11/15/2024 and 03/26/2025 when the ECMC approved Draco by a four to one vote.

I was very impressed with David Frank, testimony and the fact that the ECMC invited him to the hearing. I'll just recap some of the some of the things that council member Baer said. Despite the, not having much leverage, Erie and and David were able to to get some concessions, before the March 2025 vote. Again, the air quality, the six wells, that are plugged and abandoned that, the sampling will be done. This may have been one of the first in the industry for that to happen, something like that, to get that concession.

The thermal imaging that will be in place is permanent, continuous hourly leak detection on-site automated optical gas. Gas imaging is also required. We talked about Erie having 23%, 4% minerals, of of the Draco operations. That is important. Location's also important.

But the idea that we can significantly change the the plan of the operation after the state has approved it is highly unlikely. And I've not had anybody tell me that there's a strong, case for us to be able to do that. But can we influence this? Yes. Maybe.

Probably. We're working through those details. My family and I live 500 feet from a well that's been operating since we moved there twenty five years ago, long before the Erie and state regulations, the tougher Erie and state regulations were established. They've been in the process of plugging this well for over a year due to the leaks in the soil contamination. We live the health and safety risks.

As mentioned, at a high level, being negotiated is improved health and safety improvements. The sixteen and seventeen wells is a big deal because we put it on an, expedited timeline. There is no timeline without a deal. There is no deal yet, but it it's part it's part and parcel of the of what's being negotiated. On-site inspection is also very important.

In the compensation, yeah, we're not putting a price on anything. But if there's, ways of something that's gonna happen, if we can benefit from it, we can we can fight it and and get nothing, or we can find a path that is you know, that will work for the town of Erie, we we may get compensated. Also,

this

is within the scope of the already approved by the state Draco operation. There is no consideration for expanding any oil and gas operations other than what's already been approved. We're not negotiating anything outside of that scope. If this deal is negotiated, the deals will be made available, and a vote by the town council is required, and there will be a a public hearing. So I wanna thank David, Brina, Meredith, and and our staff for all the work that they've they've done on this negotiations and what you're doing for the council in the town. Thank you.

All right. Thank you. All right. I will wrap it up. First, I just want to say thank you for everybody coming out

and being

engaged. This is something that is kind of unique. We're in the middle of a negotiation, but we wanted to share information as soon as we could. And believe me, we've been talking about this internal. And yet I know that many are still frustrated because we can't share everything. And I think because we can't share everything, it's really hard for us to share exactly the scope of what we're trying to negotiate. We're certainly not rushing. If we were rushing, we would have had something months ago. We're holding the line on a few things that I think are very important for the outcome here. I want to address just a couple points.

Conflict of interest. I've been asked, do I own oil and gas stocks? No. I do not own I do own three properties that are in the path of Draco. So I have three properties that are likely to get drilled under.

I own zero mineral rights on those three properties. I'm an Erie resident just like all of you. And as I'm looking at the information, it's not like I'm trying to do something to harm Erie. I'm trying to understand what the trade offs are for doing something on a project that is going to go forward anyway, but we'd have to give up some mineral rights is the outcome and what we get back, is it worth it? And until we can share that and actually have a public discussion, it's really hard for all of us to really get that point across.

I want to address an item, with the landfill, that the mayor pro tem brought up, because I was mayor at that point. That issue was highly contentious as well. The landfill that generates about $2,000,000 a year for Erie right now was located in Weld County. Weld County got all the revenue off of the landfill on our border. The debate at the time was if they would annex in if we would allow them to go higher.

So you can imagine the public feeling. It wasn't a good feeling. But we also knew that if we said, you can't go higher, they were just gonna go to Weld County. And likely, Weld County was going to say, right on, you can go higher. And so we went through a very similar process to this, and we were able to annex the landfill in. And we now generate quite a bit of revenue off that. This deal I can't say is the same, but there are components that would be ongoing revenue. There are components that would be one time revenue. And then there's the safety elements that others have brought up here as well. So, we'll get there, when we, when we either get a deal.

And if we don't, then the answer will just be we tried, but it's gonna go forward the way it's gonna go forward. The last thing I wanna say is that I appreciate councilmember Baer fighting so hard. She was here. I wasn't here when, Draco was going through the approval process. And along with many others, there were, councilmember Baer and others were fighting to get it stopped, and it didn't get stopped. And so now we are dealing with it didn't get stopped. So what is that? What can we get if it is gonna go forward, regardless? It's not easy, and I could tell you that all of us up here take this very seriously. Alright.

The next step of all of this, will be if we get to a deal, we'll set a hearing date. I've already spoken to Meredith that I want enough time. It's not like we're gonna say, hey. On a Friday, here's the information. On a Tuesday, here's the meeting. We want to give enough time so people can actually see what the deal is and process that before we do meet again. So I don't know when that will be. But as soon as we have more information, certainly share it. All right. With that, thank you again, and I'll adjourn the meeting. Thank you.

Chris Holland, and I'm the facilities operations supervisor of the town of Erie.

The facilities team supports every town owned building, handling everything from daily maintenance to major project