TRANSMITTAL LETTER FOR BOARD MEETING OF OCTOBER 19, 2023
COMMITTEE ON ENGINEERING
Mr. Brian A. Perkovich, Executive Director
Title
Report on the status of the agreement entered into between the District and Material Service Corporation, now known as Heidelberg Materials Midwest Aggregate, Inc., for the mining of the required “Rough Hole” for the Thornton Composite Reservoir
Body
Dear Sir:
The subject agreement was entered into on June 18, 1998, between the District and Material Service Corporation, now known as Heidelberg Materials Midwest Aggregate, Inc. (Heidelberg). The terms of the agreement provide for reimbursement of “Hard Costs” and “Capital Costs” associated with the mining operation over a period of approximately 14 years. The agreement recognized that costs included in the agreement were initial estimates only. Reimbursement would be based on costs as actually incurred and additional items not yet identified would also require reimbursement.
“Hard Costs” are those costs incurred by Heidelberg directly related to altering its mining plan to conform to the Staged Reservoir Plan or for work requested by the District.
“Capital Costs” are the compensation for stone reserves to be left in place, real estate taxes, and additional equipment to be purchased.
The fourth amendment to the agreement was approved by the Board of Commissioners on October 15, 2020, for continued use of the Lower West Lobe of the Thornton Quarry for the Thornton Transitional Reservoir through year end 2022. This amendment increased the estimated cost of the agreement to $55,005,539.00. The current cost of the agreement through September 30, 2023, is $54,506,673.00, as shown in Attachment A.
The Engineering Department is working with the Law Department in completing the remaining terms of the agreement and wrapping up any ongoing obligations. These obligations may incur additional costs associated with Item 6.05 Additional Pumping, Item 11.06 Administrative Support Cost and any other discoverable costs allowed by the agreement. These obligations are not anticipated to exceed the estimated amount of $55,005,539.00.
If further clarification is required, please advise the undersigned.
Respectfully Submitted, Catherine A. O’Connor, Director of Engineering, KMF:LS
Attachment