HomeMy WebLinkAboutAgenda Report - June 3, 1987 (81)TO THE CITY COUNCIL
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FROW THE Cl" MANAGER'$ OFFICE June 3, 198;
SUBJECT. ADOPT RESOLUTION OF INTENTION TO CALL FOR BIDS FOR A LEASE AGREEMENT FOR THE
PRODUCTION OF OIL, GAS AND OTHER HYDROCARBONS
RECOMMENDED ACTION: That the City Council adopt Resolution No. 87-60 - A
Resolution of the City Council of the City of Lodi,
California, Declaring its Intention to Call for Bids for a
Certain Oil and Gas Lease and Making Findings in
Connection Therewith and Setting the Time and Date to
Receive Bids as 5:00 p.m., Wednesday, July 15, 1987.
The City has received several inquiries recently indicating an interest in
entering into an Oil and Gas Lease on certain City property located in the area
of the White Slough Water Pollution Control Plant.
Section 7058.5 of the Public Resources Code of the State of California provides
that, before a lease or any operating agreement or other type of agreement for
the production of oil, gas, or other hydrocarbons is entered into, the
governing body of a city shall in open meeting adopt a resolution declaring its
intention to take such action. The subject resolution shall fix a time not
less than 30 days thereafter and place for a public meeting of said governing
body, at which meeting sealed proposals to lease or contract will be received
and considered. The resolution shall, before the date of such meeting, be
published once a week for four successive weeks in one or more newspapers of
general circulation in the city where the property is situated.
Based on information received, it is staff's recommendation that the following
bidding factors be established.
1. The minimum annual rental shall be $20.00 per acre.
2. The landowners royalty share payable for oil, gas and other
hydrocarbons produced from wells on the leased land shall be
one-sixth (1/6th).
3. The variable bidding factor shall be the cash bonus
consideration, payable upon submittal of the bid.
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Alice M. Reimche
City Clerk
COUNCOM3
TXTA.02D
A.
RESOiuTiON NO. 87-60
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LODI,
C111 FDRNIA, DECLARING ITS INTENTION TO CALL FOR BIDS
FOR A CERTAIN OIL AND GAS LEASE AND MAKING FINDINGS
IN CONNECTION THEREWITH
The City Council of the City of Lodi, California, does resolve as
follows:
SECTION 1. Pursuant to Sections 7058 and 7058.5 of the Public
Resources Code of the State of California, the City Council declares
that it intends to call for bids for a lease agreement for the
production of oil, gas and other hydrocarbons.
SECTION 2. Said lease shall cover all land lying more than 500
feet below the surface of that certain land upon which bids are
submitted. The City will be receiving bids on two (2) parcels
locations both situated in the County of San Joaquin, State of
California, and more particularly described as follows:
Parcel 1
Portions of Sections 23, and 24, Township
3 North, Range 5 East, Mount Diablo Base and
Meridian, also being described as Assessor's
Parcels 055-130-14, 055-130-15, 055-150-17,
055-150-27, and 055-150-28. The property is
also commonly known as the City of Lodi Wnite
Slough Water Pollution Control Facility. This
property is highlighted on the attached Exhibit
A and totals approximately 340 acres.
Parcel 2
Portions of Sections 24, Township 3 North, Range
5 East, Mount Diablo Base and Meridian, also
being described as the Assessor's Parcel 055-130-4,
055-130-13, 055-150-14, and 055-150-15. The
property is also commonly described as the Westerly
portion of the Cite of Lodi White Slough Water
Pollution Control Facility property. This portion
of City property is highlighted on the attached
Exhibit B and totals approximately 137 acres.
Exhibits !^ and B are on file in the office of the City Clerk.
SECTION 3. The minimum annual rEntal shall be $20.00 per acre.
SECTION 4. The royalty share payable for oil, gas and other
hydrocarbons produced from wells on the leased land shall be one-sixth
(1/6th), to be computed as provided in said form of lease.
87-60
SECTION 5. The term of the lease shall be for three (3 years and
for such longer period (not to exceed 35 years) during which oil, gas,
a!:Q other hyd±CCaY'b0i SilbStailCeS Sn.1 to produced f-om said leased
16nd, or lands with which the leased land may be poo:ed.
SECTION 6. The form of the lease shall 5e a standard oil and gas
lease for!.' such as is used by Shell Oil, Standard Oil, Phillips
Petroleum, or any other major oil company.
SECTION 7. Fhe variable bidding factor from which bids shall be
received shall be toe cash bonus consideration, payable upon submittal
of the bid.
SECTION 8. Bids may be submitted on either Parcel I (390 Ac +)
or Parcel 2 (13; Ac +) or may be submitted on Parcels 1 and 2
combined (527 Ac +).
SECTION 9. The bidder shall submit a sealed proposal to enter
into said lease agreement and the same shall be received at the office
of the City Clerk of the City of Lodi located in the City Hall on or
before 5:00 p.m. Wednesday, July 15, 1987 and said bids shall be opened
and publicly declared by the Council at its regular meeting in the City
Nall, Lodi, California to be held at 7:30 p.m. on said date. Said bids
shall contain a cashier's or certified check covering the full amount
of the cash bonus consideration including the first vaar's rental and
shall indicate the willingness of the leasee to enter into a lease
containing at least the minimum proposals set forth herein.
SECTION 10. The City Clerk shall publish this resolution once a
week for four successive weeks in the Lodi News Seitinel, a newspaper
of general circulation published and printed in the city and county
where the property is situated.
I hereby certify that the foregoing resolution was passed
and adopted by the City Council of the City of Lodi in a
Regular Meeting held Wednesday, June 3, 1987, by the
following vote:
AYES: Council Members -
NOES: Council Members -
ABSENT: Council Members -
ABSTAIN: Council Members -
Approved as to form
Ayw% Y) ) -
R15nald M. Stein
City Attorney
ATTEST:
ALICE M. REIMCHE
City Clerk
1
Exhibit A
Parcel 1
Portions of Sections 23 and 24, Township 3 North, Range 5 East, Mount
Diablo Base and Meridian, also being described as Assessor's Parcels
055-130-14, 055-130-15, 055-150-17, 055-150-27, and 055-150-28. The
property is also commonly known as the City of Lodi White Slough Water
Pollution Control Facility. This property is highlighted below and totals
approximately 390 acres.
25
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Exhibit B
Parcel 2
Portions of Section 24, Township 3 North, Range 5 East, Mount Diablo Base
and Meridian, also being described as Assessor's Parcels 055-130-4,
055-130-13, 055-150-14, and 055-150-15. The property is also commonly
described as the westerly portion of the City of _odi White Slough Water
Pollution Control Facility property. This portion of City proper;._y is
highlighted below and totals approximately 137 acres.
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W. M. SHORT & ASSOCIATES
Over 30 Years
Of Experience To Serve You `. �' ' —'61018 Prescott Trail
Telephone: 619-366-3563 _ _ .Joshua Tree, CA 92252
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.,ay ? 1987 t
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City Council
City of Lodi, California
221 West Pine Street
Lodi. California
Cer-tlemen:
I respectfully request that those certain City owned mineral rights, as described
below, being approximately 66.00 acres, be made available for an oil, gas, and
mineral lease bid at your early convenience. Subject mineral rights are more
fully described as follows:
TOWNSHIP 3 NORTH - RANGE 5 EAST MDB&M:
Section 24: All that portion of the SE, lying West and South of Thornton t[
Road and East of Interstate Route No. 5. £`
(APN 055-13-4)
If subject parcel is not available for leasing at this time, I will appreciate
being so advised at your convenience.
Yours truly,
W. M. SHORT V
r
RUSHING MINERALS, INC.
January 23, 1987
Ms. Alice Reimche
City Clerk
Citv of- Lodi
Lodi, CA 95240
Dear Ms. Reimche:
26,STREET %
�•`ARLtER�IE DILA. 93304
t 809 r 327.7089
C! ET' L:i"
Reference is made to our telerrhone conversation of
January 22, 1987 concerning oil, gas and mineral rights
owned by the City of Lodi.
These rights have been pun lip For ccmpetetive bidding
twice in the last year and no.bids have been received.
IL is our opinion that firms were unwilling to bid for
two primary reasons:
(a) The terms were onerous for the
area;
(b) No surface rights were available.
I am not aware of the ownership of the surface, but if
it is owned by the City, limited surface drill sites should
be granted.
Secondly, if the City would advertise the property for
lease on the below listed terms, we believe you would
receive some bids:
1. 5 year primary term;
2. 1/6th Landowner's Royalty;
3. No Bonus;
4. Biddable Factor to be dollars per
acre of annual rental;
5. Successful bidder to pay cost of
advertising for bids.
If the City of Lodi will advertise the subject property
for Oil, Gas and Mineral Leasing and conduct such a sale
Ms. Alice- Rei^?cne
City Of LOc2
January 23, 1987
Page 2
on or before May 1, 1987, Rushing Minerals will, in Vie
event you have no bidders, reimburse the City of Lodi
for advertising costs up to a maximum of $2,000.00.
We would appreciate being advised if this proposal is
acceptable to the City of Lodi.
Thank you.
Very truly yours,
RUSHING MINERALS, INC.
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