Council weighs creating Community Improvement Corporation after no bids on oil and gas lease

Council devoted an extended portion of the meeting to why the city's recent oil and gas lease solicitation drew no bids and what options exist to monetize mineral rights. Law Director Costa Mastros told council the solicitation limited bidders to offering a bonus amount and did not allow negotiation of royalty language, which in his view discouraged respondents: "When you do these oil and gas leases...there is a give and take with the language...we couldn't do that, the only thing they had to bid on was the bonus money," Mastros said.

Council member Hernon argued the city needs a vehicle to negotiate with potential lessees without transferring control of property to another entity: "We either A. don't do it, or B. we have to actually give our land into the name of some other entity that isn't under our control...this would be a means by which we could creating a CIC," Hernon said. Proponents said a CIC would allow negotiation of lease terms (royalties, non‑surface conditions) and potentially bring immediate signing bonuses that could help shortfalls in the near‑term budget; Hernon cited a 2026 health care subsidy figure of $425,000 in the budget discussion and said properly negotiated bonuses could produce "a couple $100,000 in clean money" for the city.

Opponents expressed concern about creating another quasi‑governmental entity and questioned governance and oversight: council members asked who would sit on a CIC board and how council would retain control. Mastros said a CIC could be structured with city officials as majority members and that any conveyance agreement could require royalties to pass back to the city general fund. Council agreed to pursue further information: Mastros will re‑circulate an ordinance draft and past materials he prepared four years earlier and council directed staff to consider rebidding as a parallel option.