Dear Bradford Island Landowners,

There have been a lot of questions from landowner's with regards to why Oxy, Inc. AKA The Gas People are paying a lower or different amount than smaller landowners. I asked the Engineering Firm who conducted the Prop. 218 this. In an effort to assist everyone in understanding, I am sending all landowner's the answer.

The Engineer's report for the Prop. 218 is posted on the Bradford Island website. www.bradfordisland.com. Why is the gas well paying less than smaller landowners: The rate study outlines the factors contributing into determining this. The other factor is Landowners now have 2 assessments, gas wells only have 1. Gas Wells vs. Actual Property). Please refer landowners to Section 4 of the Engineer’s Report for the assessment methodology. Special benefit was apportioned as follows:

1. Access (5% of total special benefit): All parcels, including mineral rights parcels, received equal benefit regardless of land use, location or size.
2. Drainage (70% of the total special benefit): Mineral rights parcels receive special benefit from drainage O&M equal to 50% of the overlying surface parcels.
3. Flood Risk Reduction (25% of the total special benefit):
   • Land Damage Reduction (80% of the Flood Risk Reduction Benefit): Mineral rights parcels receive land flood damage reduction equal to 50% of the overlying surface parcels.
   • Structural Damage Reduction (20% of the Flood Risk Reduction Benefit): Each productive or idle well, as registered with DOGGR, was estimated to be 500 sq-ft and the flood damage reduction was 10 times that of a habitable structure.

Please note that this methodology was presented and explained at the public workshops and the public hearing, and was clearly articulated in the Engineer’s Report. We did not receive any questions regarding the methodology for assessing the mineral rights prior submitting the Preliminary Engineer’s Report and initiating the 218 balloting process.

Scott L Brown, PE, CFM
Larsen Wurzel & Associates, Inc.