CITY OF FLORENCE PLANNING COMMISSION MEETING JUNE 11, 2009

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1 CITY OF FLORENCE PLANNING COMMISSION MEETING JUNE 11, Chairwoman Tammy Stone called the regular meeting of the Florence City Council to order at 7:00 p.m. 2. Roll call - Tammy Stone - Present Larry Baker - Present Cid Larson - Present Rudl Mergelman - Present Sandi Roberts - Present Joe Caruso - Absent Tom Piltingsrud - Present Others present- City Attorney Bryan Fredrickson, City Clerk Dori Williams, City Planner Don Moore 3. Approval of minutes Larry Baker moved to approve the minutes of the previous meeting held on May 14, 2009 as presented. Seconded by Cid Larson. Roll call vote 4 ayes, 1 abstention Roberts. 4. PUBLIC HEARING AMENDMENT TO TITLE 17 TO ALLOW OIL AND GAS EXPLORATION AND EXTRACTION AS A SPECIAL USE IN ALL ZONE DISTRICTS Chairwoman Stone adjourned the meeting from regular session and opened the public hearing to receive comments on the amendment to Title 17 to allow oil and gas exploration as a special use in all zone districts. City Planner Don Moore stated that the City s current zoning ordinance at Title 17 of the Florence Municipal Code does not allow oil or mineral extraction anywhere but two zone districts AT Agricultural-Transitional and I-2 Heavy Industrial. The proposed amendment to Title 17 contemplates allowing oil and gas exploration and extraction as a special use in all zone districts. Mining and mineral extraction will still only be allowed in AT and I-2. City Attorney Fredrickson stated that one of the things that this proposed change does to help streamline the process is to require the hearing before City Council in Title 15 for oil and gas drilling licenses to occur at the same time as the special use review application. Another change in this proposed amendment all references to Mined Land Reclamation Board have been changed to all appropriate state agencies. The City retains control over extractions and exploration through the special use review process which is pretty extensive. Jim Javernick, Javernick Oil, stated that he has numerous oil wells in the surrounding area and needs to be able to go after it regardless of the zone district. This would be the

2 perfect procedure, this special use review. Oil drillers have to comply with all the state regulations and then come to the city to satisfy local concerns. The county needs this oil production. New wells means new money for the County and the City, creates jobs and enables us to reach the full potential for the area. This could only benefit the City. Randy Stevens, 1138 Kelsie Court, Lot 3 of Two Creeks Subdivision, stated that the City s proposal to open up all zone districts to oil drilling is the most absurd thing he has ever heard. Some areas are not suitable at all for drilling. This will be a detriment to the City and drilling for oil in the middle of a subdivision is asinine. Ethan Nemcik, resident of Canon City, stated that he and his friends were laid off from the oil fields in the surrounding states and we should consider ourselves lucky that Pine Ridge is willing to come here and begin drilling. It will benefit Florence with the use of stores, restaurants, motels, etc., and creates jobs. These companies follow the laws of the state, impact on the environment is minimal, but the benefit to the community is great. There being no other comments either for or against the proposed amendment, Chairwoman Stone closed the public hearing and reconvened the meeting to regular session. Sandi Roberts asked if all the oil wells would look like the one that the Planning Commission visited on Kelsie Court. Moe Felman, Pine Ridge Oil & Gas, stated that the company first constructs the area and then brings in the drilling rig that can be feet in height. Once the drilling is complete the rig is moved out, usually within 7-14 days, and then they bring in a smaller rig to complete the well. Once that is done they install a pumping jack to produce from the well. City Attorney Fredrickson stated that he wants the Commission to understand that the amendment does not propose that oil and gas exploration is a permitted use in any zone district. The whole purpose of the special use review is to make sure that the drilling operation is compatible with surrounding land use no matter what zone district you are in and each application has to be considered separately. Sandi Roberts asked if the proposed amendment doesn t pass, does the state or federal government have any jurisdiction to override the decision. City Attorney Fredrickson stated that, in his opinion, the municipality needs a valid land use reason to deny the right for someone to drill. If the state has issued an operational license to drill, then you probably couldn t do anything about it. The courts have been real clear that municipalities continue to have land use concerns about these operations and those need to be addressed. This amendment is the form that we are addressing those concerns. There being no further discussion, Larry Baker moved to recommend to City Council to amend Title 17 to allow oil and gas exploration and extraction as a use by special use review in all zone districts. Seconded by Sandi Roberts. Roll call vote 5 ayes. Representatives of Pine Ridge Oil and Gas were told that the ordinance amending Title 17 will be considered by City Council on June 15 th. 2

3 5. PUBLIC HEARING PINE RIDGE OIL AND GAS, LLC APPLICATION FOR SPECIAL USE PERMIT FOR OIL WELL DRILLING NW OF STATE VETERANS NURSING HOME WELL NAME: KING Chairwoman Tammy Stone adjourned the meeting from regular session and opened the public hearing to receive comments on the application from Pine Ridge Oil and Gas, LLC for a special use permit to drill an oil well north of the Veterans Nursing Home just off of Moore Drive in the city limits. City Planner Don Moore stated that mining and mineral extraction is allowed by special use review at the King Well site in the AT Agricultural Transitional zone district. The site plan that was submitted includes information about road access, silt control, drainage facilities and culverts. They are requesting a waiver from asphalt or concrete surfacing and propose a gravel surface. Applicant will need to explain what amount of gravel is proposed and how they propose to make it dust free. City Council will hear this request for waiver of pavement at their meeting on June 15 th. The King site is in an area called Sunland Park that has a grid of platted roads. The access road proposed for the King well site follows an existing meandering path that is not a platted street. The applicant should justify constructing the access road outside of the platted street location. The property is owned by the State of Colorado, they have been notified of the proposed well site but have not responded to any of the notices. Since the road itself is on private property we should only be concerned with dust control and with the access point on Moore Drive. They will have to get a driveway access permit from the Public Works Department and follow the construction standards for the driveway. No information was given for landscaping and screening but the regulations for screening for this type of use are not clear. The applicant should provide a site plan showing the future production pad size and structure locations after the drilling phase is complete. Also, Chapter limits the erection of any derrick to a maximum of 60 days. The applicant should clarify the length of time the derrick will be in place. The application stated 7-14 days drilling time which is well within the 60-day time limit for derrick on site. Moe Felman, representing Pine Ridge Oil & Gas, stated that they will construct a road on the existing path that has been agreed to by the land owner and it will done with 2-3 of road base. They will request a waiver from City Council. The derrick will not be there longer than 60 days and 90 days is more than enough time to get the drilling done. Larry Baker wanted to know if the access point on Moore Drive is just north of the Veterans Home and what impact will it have to traffic at the nursing home. Mr. Felman responded that the location was discussed with the State representative and they requested that that area be used just north of the nursing home site. Tom Piltingsrud stated that 4-5 of road base would be required and is not so concerned about dust as the mud being brought out onto Moore Drive. The road has just been chip and sealed and we are concerned about damage to Moore Drive from the large rigs making that turn there. There was some damage to Frazier Avenue when the big rigs were brought in for that well and we have just made the repairs for that. If you don t have a good road base at the Moore Drive access there will a lot of mud on the street. 3

4 Mr. Felman stated that they will accept the responsibility for damages that the rigs may cause. Tom asked who makes the call on maintenance of these access roads. Mr. Felman stated that they will maintain their roads and will work with the public works department to ensure that Moore Drive access is maintained. City Attorney Fredrickson questioned the lease with the State. He stated that it has been assigned from Bison Oil to Pine Ridge and asked if the City could have a copy of that assignment. Mr. Felman responded that he would provide a copy of that to the city. Tammy Stone asked what they would do about screening the well site from the surrounding area. Mr. Felman that screening should not be an issue because after the drill rig is moved the tanks are painted in an earth tone and with this site they will be visible from the nursing home park lot but not visible from the road. Don Moore stated that a special use permit has a review after 6 months and then at annual intervals thereafter so we can tell if they are maintaining the access road. Jim Javernick, Javernick Oil, stated that he is in support of this project and it is important to permit all the wells that we can. This is a great opportunity for Florence to get back to its roots and create jobs. The state rules are very strict and you will make no mistake in allowing these wells to operate in your city. Randy Stevens, 1138 Kelsie Court, stated that they will be putting a well on his back property line and he is very upset. He stated that he bought the property a year ago and was not aware that there could be oil drilling in the area although he knows he doesn t own the mineral rights. He stated he is concerned about who will maintain the roads because the rigs will use the same roads as the property owners. The tanks are 40 feet high with blinking red lights on them. There area is unsightly with old mobile homes and there is a lot of dust. His property is now in the middle of an oil field and the property value is decreasing. Teddy McCorkle, Coal Creek, stated that he has an oil well very near his home and it is not a problem and most of the oil company employees live in Fremont County. Ethan Nemcik, resident of Canon City, stated that these people use geologists and they know that there is oil there and that is where they know the wells will produce. Moe Felman, stated that it is not possible for the tanks to be 40 feet high and the red light on top is to signal that the tank is full and it is a safety issue to avoid spills. There is a berm constructed to contain any spills and it is built to contain the volume of the tank. The tank height at Kelsie Court will be 15. There will be two tanks at that site that will be 400 gallons per tank. If there is road damage caused by their rigs or truck traffic they will fix it. Rudl Mergelman asked if the increased traffic and truck noise would be detrimental to the veteran s nursing home and their programs. Mr. Felman responded that they gave a power point presentation to the nursing home residents and staff and they were very receptive to the idea and are aware of the operation. They know that the drilling phase is very noisy but they were very positive in their comments. 4

5 There being no further comments, Chairwoman Stone closed the public hearing and reconvened the meeting to regular session. City Manager Piltingsrud stated that before the Commission makes a decision he would ask that they consider certain contingencies for the special use permit for the King well site. The contingencies would be 5 of gravel/road base, gravel road maintenance as required upon notification by city personnel, and damage to Moore Drive during derrick operations to be responsibility of Pine Ridge. Don Moore stated that other contingencies should include dust control by Pine Ridge, that they have to comply with the conditions of the driveway access permit, and road maintenance for the life of the well. Also, City Attorney Fredrickson has requested that Pine Ridge provide a copy of the assignment of the oil lease. Larry Baker moved to recommend to City Council that the special use permit be issued to Pine Ridge Oil for the King Well based on the draft resolution and the additional conditions as stated by Tom Piltingsrud and Don Moore for the life of the well. Seconded by Cid Larson. Roll call vote 5 ayes. 6. PUBLIC HEARING PINE RIDGE OIL AND GAS LLC (CONTINUTED FROM MAY 14 TH MEETING) APPLICATIONS FOR OIL WELL DRILLING LICENSE GOLDEN, REDBAND & OHRID SITES Chairwoman Tammy Stone adjourned the meeting from regular session and opened the public hearing to receive comments on the applications from Pine Ridge Oil & Gas LLC for special use permits to drill for oil at the Golden, Redband and Ohrid sites. Don Moore asked if these three applications should be dealt with separately or if we can lump them altogether. He asked City Attorney Fredrickson to tell Planning Commission what the process will be for these three well sites. City Attorney Fredrickson stated that he will recommend that Planning Commission continue the hearing again tonight and continue to continue the hearings until the ordinance that amends Title 17 allowing oil drilling by special use permit in all zone districts becomes law. Don Moore stated that he would proceed for now with information on all three sites. Pine Ridge has submitted the CDOT access permit for the Redband well which is off of Highway 67 to access the Sumo Development land. That permit states that there will be one vehicle per day at this site. We still have not received any surface owner information for this site. The drilling pad for this site is 175 x 250. The completion pad will be 100 x 100. The access road includes culvert, gravel road and tracking control to knock the mud off tires before it gets to the highway. The Ohrid well site is off of Victory lane and will need an access permit from the city with the same conditions as the King well. Victory Lane is a gravel road used by residents and will be very challenging for maintenance and we may want to request a deposit for gravel maintenance of Victory Lane assuming that Council will waive the pavement request. 5

6 The Golden well site is off of Kelsie Court and outside of the city limits. There will a short road to the privately owned and maintained Kelsie Court. We have questioned their right to use Kelsie Court and they have provided a surface use and damages agreement and easement which includes maintenance of Kelsie Court and Pine Ridges ability to use that road for access. Randy Steven, 1138 Kelsie Court, stated that he is opposed to Kelsie Court being used for oil rigs. City Manager Piltingsrud stated that this is a private road and he needs to contact the landowner to find out what the deal is. There being no further comments, Tammy Stone moved to continue the public hearing to next regular meeting on July 16, Seconded by Larry Baker. Roll call vote 5 ayes. Moe Felman stated that he will present new drawings of the access road on Victory Lane as soon as they are ready. Mr. Felman asked when the decisions would be made on these requests. City Attorney Fredrickson stated that the amendment to Title 17 that was heard by the Planning Commission will be before City Council on Monday, June 15 th for 1 st reading. We are a statutory city and it requires two readings of an ordinance before it becomes law. The second reading will be on July 6 th and then it takes effect 30 days from publication on second reading. It will be the planning commission meeting in August before they could make their findings and recommendations on the applications for special use for the three well sites Ohrid, Redband and Golden. Council will then review those findings and pass the resolutions approving special use permits at their meeting August 17 th. 7. Old Business- none 8. New Business none There being no further business the meeting was adjourned at 8:50 p.m. 6