December 22nd, 2004

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Special Montgomery County Full Board Minutes For Wednesday, December 22nd, 2004 – 8:30 AM The following are minutes of a Special meeting of the Montgomery County Board held at 8:30 AM on Tuesday, December 22nd, 2004 in the County Board Chambers of the Historic Courthouse, Hillsboro, Illinois. The meeting was called to order by County Board Chairman Mike Havera. Roll call was taken, 20 members present, 1 absent. Members Present: Nelson Aumann, Mary Bathurst, George Blankenship, Terry Bone, Bonnie Branum, Ronald Deabenderfer, Toby Dean, John Downs, Robert Durbin, Mike Havera, Edward Helgen, Keith Horn, Dennis Jagodzinski, Frank Komor, Roger Myers, Dale Ogden, Glenn Painter, Don Petty, Mike Plunkett, Bill Sielschott. Members Absent: Dave Heaton. Pledge of Allegiance to the flag was given. COMMITTEE REPORTS: MINES AND MINERALS COMMITTEE: Given by Chairman Mike Havera as follows: 1. History of Coal Rights: Chairman Havera gave the history of how Montgomery County had obtained the Coal Rights. A company called Consolidated Coal spoke with a number of area farmers in the 1960’s and acquired the mineral rights to approximately 94,000 acres of Montgomery County Coal. In the 1980’s, the coal was sold by Consolidated to Exxon and Chevron. No production ever occurred regarding this coal, and in the 1990’s Exxon and Chevron returned the coal rights to Montgomery County. Exxon paid the county $13,400 to take back 11,000 acres and Chevron paid the county $51,200 to take back 83,000 acres. Currently, the county owns 120,000 acres of coal rights, the balance coming from tax deeds the county has acquired along the way. No interest was shown in Montgomery County coal resources until Colt Coal Company and Turris Coal Company approached the county for an option agreement. Colt was awarded the bid to lease the coal on April 9th, 2002. On January 14th, 2003, BPI Industries entered into an option agreement to purchase a mineral lease from the county to harvest the methane gas. The county currently has two lease agreements on the books, one with Colt Coal Company for coal and the other with BPI Industries for the methane gas. In August, September and October, Chairman Havera had a number of meetings with Harry Melvin, President of Clean Coal Power and Resources, Kentucky, which as of January 1, 2004, owns 85,000 acres of coal in Montgomery County; Jim Morris, Vice President of Colt Coal Company, West Virginia and Dan Anderson of BPI Industries, Canada. All three companies, Clean Coal, Colt Coal and BPI, were interested in purchasing Montgomery County’s Coal. The Mines and Minerals Committee, State’s Attorney Jim Roberts and Chairman Havera met on several occasions and decided to put the coal up for sale to the highest bidder. The three companies were notified and only two, Colt Coal and BPI submitted a bid. Colt was the highest bid at $7.2 million over the next 7 years and a 2% residual royalty from which the county will receive income from the property once coal is produced. Havera then introduced Jim Morris, Vice President of Colt Coal Company, who gave an overview of the proposed three phase coal mine, power plant and synthetic natural gas (SYNGAS) plant. (For PowerPoint Presentation, see Resolution Book 5, pages 97-123). 2. Discussion of Presentation: Board member Ed Helgen asked Morris about subsidence rights. Morris stated that State Law requires that Coal Companies return land to its original drainage condition prior to mining, and that subsidence would be dealt with on an individual basis between the company and the landowner. When longwall mining under a home, in some cases the property owner could sell the home to the company or receive compensation for extra support that may be needed around the home, re-landscape the property, or provide housing elsewhere until subsidence is no longer an issue. Morris stated that if enough farmers say “no” to longwall mining, then the company would have to long wall elsewhere or use the Room and Pillar method. Hillsboro Mayor Bill Baran was in the audience and asked Morris what type of water source would be needed for the Coal Mine and Power Plant. Morris stated that the mine would only use approximately 1,000 gallons of water per minute and could be tapped from a lake source, but the power plant would use approximately 10,000 gallons per minute, so a larger water source would be sought. Water source options for the power plant could include piping the water in from the Kaskaskia River or the Illinois River. Morris stated that approximately 1500 acres of land would be purchased for all facilities of the three phases of Coal Mine/Power Plant operation. 3. Approval to Accept Colt Coal Company’s Proposal to Purchase Montgomery County Owned Coal Rights: Motion by Painter, second by Branum to accept the proposal as presented from Colt, LLC for the sale of Montgomery County Owned Coal Rights. Roll Call Vote: 18 ayes, 2 nays – George Blankenship and Ed Helgen voted nay, Dave Heaton, absent. Motion carried by 3/4th‘s majority vote. (See Resolution Book 5, pages 124-153). In closing, Havera gave a special thank you to County Coordinator Chris Daniels for the many hours spent on manuals, maps and coal information she had gathered over the past few months. Havera also publicly thanked State’s Attorney Jim Roberts for all his help and work on the contract. ADJOURN: Until the Regular Monthly Meeting on Tuesday, January 11th, 2004 at 8:30 AM. Motion by Painter, second by Myers to adjourn the Full Board Meeting. All in favor, motion carried. Meeting adjourned at 9:05 AM.