Jarbidge Settlement

JARBIDGE SETTLEMENT AGREEMENT

This Settlement Agreement ("Agreement") has been entered into by and among Defendants John Carpenter, O. Q. "Chris" Johnson, and Grant Gerber (the foregoing three persons being referred to as the "Individual Defendants"); County of Elko, Nevada, a political subdivision of the State of Nevada, acting by, and through its Board of Commissioners ("Elko County"); and the State of Nevada, acting by and through its Division of Environmental Protection ("State"); and the United States of America, acting through the United States Forest Service ("FS ), United States Fish & Wildlife Service ("USF&WS") and the Environmental Protection Agency ("EPA"), such agencies and the United States being collectively referred to as "United States." The foregoing are sometimes referred to collectively as the "Parties" and individually as a "Party." Elko County, the State and the United States are sometimes referred to as the "Governmental Parties."

RECITALS

The Parties are involved in a dispute regarding a road referred to as the Jarbidge South Canyon Road (hereinafter "South Canyon Road") located in Elko County, Nevada. In 1995, a high water event in the adjacent Jarbidge River washed out portions of the road. Since that time, a series of actions and disputes have intervened to preclude the restoration of the road. For example, in 1999, the Bull Trout - which exists in the Jarbidge watershed - was listed in five distinct population segments as a threatened species under the Endangered Species Act ("ESA"), 15 U.S.C. §1531, et seq. Elko County, the State and the Individual Defendants dispute the factual and legal basis for the listing.

Elko County desires to reestablish the road to provide emergency medical and fire protection, as well as public access to the wilderness trail head. It contends that it has the authority to do so by virtue of its claimed ownership interest in the road under 43 U.S.C. § 932, repealed, 14 Stat. 251, 253 (1866), codified at Rev. Stat. § 2477 (1873) ("R.S. 2477"), and as an emergency. Elko County and the Individual Defendants contend that Elko County may repair and maintain an R.S. 2477 right of way without federal approval. The United States contends that the road is located on federal land managed by the FS and that, regardless of who owns the road, it may only be restored after compliance with federal laws and regulations, including the National Environmental Policy Act ("NEPA"), 42 U.S.C. 4321, et seq., ESA and the Clean Water Act ("CWA"), 33 U.S.C.§ 1251, et seq.

In 1999, Elko County was joined in a lawsuit over the road filed by the United States against the Individual Defendants and captioned as United States v. Carpenter, et al., CV-N-00-00547-DWH (RAM) ("the Action") in the United States District Court for the District of Nevada ("Federal District Court"). The Federal District Court in that case ordered all Parties, including Elko County, to mediation.

Elko County has provided the United States with substantial historical documentation showing the pattern of human use and development in and around the area of the Jarbidge Mountains prior to the time the public lands in question were withdrawn for national forest purposes.

Rather than continuing to litigate, the Parties have agreed to resolve the Action under the terms and conditions of this Agreement.

AGREEMENT

NOW THEREFORE, in consideration of the mutual covenants, terms and conditions contained in this Agreement, the Parties agree as follows:

I. NO ADMISSIONS

Each Party understands, acknowledges and agrees that the negotiation, execution, and performance of this Agreement shall not constitute, or be construed as, an admission of any liability or wrongdoing by any Party, nor shall the terms hereof have any value as legal precedent in any other case.

It is not the intent of this agreement to alter or modify the rights of the parties under law except as expressly provided herein. If the South Canyon Road is reestablished pursuant to the terms of this Agreement, and all other obligations of the parties created by this Agreement have been performed, the rights and obligations of the parties shall be no different from those existing in all other cases in which a political subdivision of a state owns an R.S. 2477 right of way crossing National Forest System lands.

II. RIGHT OF WAY

The United States will not now or in the future contest that Elko County has an R.S. 2477 right of way for a road run running generally from Pavlak Grade to the Snowslide Gulch Trailhead. This road is commonly referred to as the South Canyon Road. The location, scope and width of the right of way are described generally in Exhibit A. The description provided in Exhibit A will be superseded by a more specific description based on a survey completed by the FS as soon after the execution of this Agreement as snow and weather conditions allow. Elko County agrees to participate in the survey of the right of way. Nothing in this Section II shall be construed to limit the United States' authority to manage federally owned land or natural resources in accordance with federal laws, including the NEPA, the National Forest Management Act ("NFMA"), 16 U.S.C. §1600, et seq., the ESA, the CWA, etc.

III. WORK ON THE SOUTH CANYON ROAD

A. Authorization Agreement. Elko County and the Individual Defendants agree that current law pertaining to the national forests requires the County to obtain FS authorization prior to reconstructing or authorizing any other party to reconstruct any portion of the South Canyon Road on National Forest System lands between Pine Creek Campground and the Snowslide Gulch Trail head.

Elko County and the Individual Defendants shall refrain from doing any work on the South Canyon Road from Pine Creek Campground to the Snowslide Gulch Trail head, or authorizing the same, before receiving authorization from the FS. Elko County shall perform any work authorized in accordance with the terms and conditions provided in any authorization. If the South Canyon Road is reestablished, Elko County shall repair and maintain the road, seeking such authorization from the FS as would be necessary under applicable laws for conducting repair and maintenance on any other R.S. 2477 right of way located on National Forest System lands.

Upon execution of this Agreement, Elko County may perform work at its own expense, including but not limited to, reconstruction, repair or maintenance, on that portion of the South Canyon Road located between the Pavlak Grade and the Pine Creek Campground. Elko County shall perform any such work in compliance with best management practices, the terms of this Agreement and in compliance with federal and state law.

Further, the Parties will use their best efforts to prevent any third party from doing any work on any portion of the South Canyon Road unless that third party has received authorization from both Elko County and the United States. The term "best efforts" does not limit the discretion of Elko County or the United States to enforce its laws, regulations or ordinances.

B. Interim Work on the South Canyon Road. Certain work may be needed on that portion of the South Canyon Road located south of the Pine Creek Campground before the FS makes its decision on Elko County's proposal(s), as described in Section III.C., below. In particular, the FS and Elko County anticipate the need for work in the area around the first washout to prevent erosion and to prevent silt from entering the West Fork of the Jarbidge River. Elko County and the United States agree to work together to address needed work. Elko County shall receive credit for any costs it incurs in planning or participating in such work against its obligations described in Section V.B. Any dispute between Elko County and the United States on whether and what work should be done shall be resolved in accordance with Section IX of this Agreement.

C. Submission and Review of Elko County's Proposal. Elko County intends to submit a proposal to the FS to reestablish the South Canyon Road south of the Pine Creek Campground. Elko County believes that such proposal will be best termed plans for repair or maintenance of the South Canyon Road and that authorization for such work would not require NEPA analysis or implicate the CWA, ESA or other federal law. The United States contends that it may not authorize any work on the South Canyon Road without analysis under NEPA and a determination that such work will comply with applicable federal law.

If the FS determines that the proposal submitted by Elko County must be analyzed under NEPA, or that it implicates the ESA, CWA or other federal law, then neither Elko County nor the Individual Defendants will contest that determination through either administrative or judicial review. In addition, if the FS determines that Elko County's plans and actions implicate the ESA, CWA or other federal law, Elko County agrees to submit any needed permit applications and to comply with those federal laws. If the United States determines that NEPA does not apply and that no other federal law is implicated, Elko County may implement its proposal in accordance with applicable laws.

Elko County may submit plans to perform work on only part of the South Canyon Road between Pine Creek Campground and the Snowslide Gulch Trail head. If it does so, the scope of the proposal, including whether it is reasonably foreseeable that Elko County will ultimately seek to perform work on the entire South Canyon Road south of the Pine Creek Campground, will be evaluated under applicable federal law.

In analyzing any application submitted by Elko County, the FS will fully evaluate any alternative proposed by Elko County as well as any other reasonable alternative as required by NEPA. If the FS determines that it must analyze the submitted plans(s) under NEPA, the FS agrees to give Elko County cooperating agency status in accordance with the regulations implementing NEPA. The FS agrees to work cooperatively with Elko County in analyzing its plans and reasonable alternatives, and to complete any NEPA analysis and required consultations as expeditiously as possible under applicable federal law.

D. Cost of NEPA and Other Analysis. The FS shall complete and bear the costs of conducting any NEPA analysis and any other analyses required by Federal law to make a decision on EIko County's application and plans regarding the South Canyon Road between Pine Creek Campground and the Snowslide Gulch Trail head. If the FS determines that Elko County's application and plans must be analyzed under the NEPA or that they implicate other federal laws, Elko County will provide, at its own expense, necessary information, including but not limited to environmental information and engineering designs, for the FS to comply with NEPA or with other federal law. Elko County may utilize in-house contractors or volunteers to provide such information. The FS may, but is not required to, use a third party to assist in the NEPA analysis and any other process required by federal law.

E. Relocation of Right of Way. Should compliance with NEPA, the CWA, the ESA or other federal law require that the South Canyon Road be moved from its present location in order for the work to be completed, Elko County shall not object thereto solely on the grounds that the road must remain in its present location because it exists within an R.S. 2477 right of way. If the road is relocated, the United States will not contest that the location of any new route is part of the South Canyon Road R.S. 2477 right of way belonging to Elko County, provided that Elko County will abandon the former route as an R.S. 2477 right of way once the new portion is completed. Any such relocation of the R.S. 2477 right of way will be surveyed at Elko County's expense and described in similar detail to the description of the right of way prepared under Section II above, and public records will be noted appropriately to reflect the abandonment and description of the R.S. 2477 right of way. Any relocated R.S. 2477 right of way will be subject to the terms and conditions of this Agreement.

F. Reservation of Rights and Defenses. The Parties reserve all rights and defenses except as expressly limited in this Agreement. In the event that Elko County initiates proceedings seeking compensation for a taking of the R.S. 2477 right of way described in Section II and Exhibit A of this Agreement, Elko County's recovery shall be limited to 50% of any compensation awarded. Should the United States initiate condemnation proceedings, this limitation on takings liability shall not apply. Nothing contained herein shall be construed to require Elko County to commence a takings claim or to prohibit Elko County from submitting plans for reopening the road more than once.

IV. RESPONSIBILITY FOR COST OF WORK ON THE SOUTH CANYON ROAD

Elko County will be solely responsible for the cost of reconstructing, repairing and maintaining the South Canyon Road between Pine Creek Campground and the Snowslide Gulch Trail head, including the costs of any environmental restoration or mitigation work deemed necessary to comply with federal law. The United States has no obligation under this Agreement to contribute to the cost of any work on the South Canyon Road. If, in order to comply with federal law, Elko County must implement measures beyond those proposed in its plans, the FS will use its best efforts to assist Elko County to obtain federal funding for such improvements from other federal sources such as the Federal Highway Administration to the extent allowed by federal law.

V. SETTLEMENT AND COMPROMISE OF CIVIL CLAIMS

Basis Of Claims. In July1998, an Elko County road crew began work to reestablish a portion of the South Canyon Road south of the Pine Creek Campground. The United States contends, among other things, that these actions resulted in a trespass and a violation of the CWA. Elko County contends, among other things, that it had authority to undertake these actions and denies that it trespassed or violated the CWA. In response to the road work initiated by Elko County, the United States contracted to perform work that it contends was necessary for protection of the quality of the Jarbidge River and protection of the Bull Trout. Elko County contends the actions of the United States interfered with its right of way. In order to settle these claims, the Parties have agreed as follows:

A. Water Projects. Elko County agrees to contribute the sum of fifty thousand dollars ($50,000) to perform a project or projects to benefit the waters and watershed in the Jarbidge area ("Water Projects"). That sum may be contributed through the provision of in-kind services or by cash payments. Elko County's obligation to contribute to Water Projects in this Section V.A. is separate and apart from its obligation to contribute to work conducted on the road north of Jarbidge, Nevada, described in Section V.B.

1. Potential Water Projects. To meet this contribution requirement, Elko County will implement one or more of the Water Projects from the list below, after approval pursuant to subsection V.A.2, below. Elko County certifies that it is not required by law to do any of the following Water Projects and that it is not planning to do any of the Water Projects except as stated in this paragraph.

a. Watershed/Water Quality Improvement - Improve the watershed and water quality in the West Fork of the Jarbidge River by: remediating watershed problems related to historical and current uses; and, evaluating and remediating disposal methods that have a negative impact on water quality;

b. River Improvement - Pine Creek To Jarbidge: Improve the environment downstream from the Pine Creek Campground to Jarbidge, Nevada, by, among other things: stabilizing the road and stream banks consistent with stream hydrology; increasing habitat complexity; planting trees and shrubs to increase shading and maintain water temperature, including monitoring to ensure successful re-vegetation; removing trash and debris; controlling noxious weeds; and, evaluating the possibility of establishing a recreational vehicle sewage disposal site outside of the canyon area.

c. River Improvement - Gorge Gulch to the Headwaters of the West Fork of the Jarbidge River: improve the environment and water quality by planting trees and shrubs; removing trash; and, evaluating and implementing methods to increase duration of snow pack.

d. Removal of Fish Barriers Along Jack Creek and the West Fork of the Jarbidge River - Improve stream flow in Jack Creek and the West Fork of the Jarbidge River by identifying and removing or modifying barriers consistent with stream hydrology.

2. Water Project Approval. Upon execution of this Agreement, the FS intends within 180 days to submit to the EPA specific and detailed plans for the Water Project(s) described generally above. These plans shall include a time table for completion of the Water Project(s), cost estimates, and a detailed description of the proposed Water Project(s), including drawings, blueprints, or other documentation showing the details of the project. If after FS submits the detailed plans, EPA requires additional information, or changes to the project, the FS will provide the additional information or make the changes or both within thirty days after EPA's request. Implementation of any Water Project will not begin until after the EPA reviews and approves FS's plans. Further, implementation of any Water Project will not begin until after the project is authorized under other applicable laws including NEPA, ESA and CWA.

Elko County agrees to participate in the formulation and revision of plans for any Water Projects. In addition, Elko County agrees to submit any applications needed to perform any Water Projects.

Elko County shall implement the approved Clean Water Project(s) and during implementation of any Water Projects, Elko County shall provide to EPA quarterly progress reports and shall submit a final report once work is completed. The final report will describe the work completed and provide a detailed cost accounting. The EPA and Elko County will complete their obligations regarding this project in good faith, and the EPA agrees that it will not unreasonably withhold its approval of Water Project plans.

3. Payment In Lieu Of Project Construction. The aggregate value of the Water Projects will be calculated using actual construction costs, including equipment, labor, and material costs. Elko County may implement any Water Projects using its own resources or may contract with a third party to implement the Water Projects. Elko County will provide to the EPA copies of invoices, contracts, and any other documents to show the amounts expended to implement any Water Projects. In the event Elko County does not complete any Water Projects within two field seasons after approval of Water Project Plans, or completes by the end of that period Water Projects having less aggregate value than $50,000, Elko County shall pay any remaining balance of its $50,000 contribution to the United States within sixty days thereafter by mailing or delivering that amount to the United States Attorney's Office for the District of Nevada, 333 Las Vegas Blvd., South, Suite 5000, Las Vegas, Nevada 89101, or such other address as the United States may direct.

Nothing in this Section V.A. shall prevent the EPA from granting Elko County additional time to complete any Water Project.

B. Road Plan and Maintenance Project. Additionally, Elko County agrees that it will expend the sum of one hundred fifty thousand dollars ($150,000) in cash or in-kind services to develop and implement a plan in conjunction with the FS, the USF&WS, the United States Department of the Interior, Bureau of Land Management, and the Nevada Division of Wildlife to improve the road north of Jarbidge to the Idaho border to protect and enhance the environment of the Jarbidge River. Implementation of any plan will not begin until after the plan is approved under applicable federal laws, including NEPA, ESA and CWA.

The Parties agree that Elko County will provide to the United States sufficient documentation to support the value of any in-kind services, which in-kind services will include costs of planning, equipment, labor and materials necessary for the agreed upon improvements. Thereafter, Elko County agrees to perform maintenance on the road in accordance with the approved plan. The Parties acknowledge that institution and completion of such work is constrained by the County budgeting process. In the case of expenditures for road work, Elko County prioritizes anticipated road projects in the following categories. Those which are to be undertaken the following year, the next year and those to be undertaken between three and ten years. Elko County agrees to place the road maintenance project herein contemplated within the three to ten year plan. Completion of the project will therefore be carried out expeditiously without a specific time period for completion being established. However, Elko County agrees to make its cash or in-kind contributions no later than five years from the date this Agreement is executed. The Parties agree to complete their obligations in good faith.

Elko County will submit its documentation of cash payments or in-kind work for its Road Plan and Maintenance Agreement to the District Ranger for the Jarbidge District in the FS office in Elko, Nevada. If after five years Elko County has not made cash contributions or performed in-kind services worth $150,000, any remaining balance shall be paid to United States within sixty days thereafter by mailing or delivering that amount to the United States Attorney's Office for the District of Nevada, 333 Las Vegas Blvd., South, Suite 5000, Las Vegas, Nevada 89101, or such other address as the United States may direct.

Nothing in this Section V.B. shall prevent the FS from granting Elko County additional time to complete the Road Plan and Maintenance Project.

C. Future Cooperation and Road Dispute Resolution. Prior to closing or decommissioning any road or trail on National Forest System lands within Elko County, the FS will consult with Elko County to determine if Elko County asserts or claims a right of way for such road or trail.

Elko County will have the Elko County Road Supervisor attend the FS-Elko County Monthly meetings to discuss any work planned on roads or trails on National Forest System lands within Elko County. Before beginning any road or trail work not discussed at the monthly meetings, Elko County and the FS agree to notify each other of the proposed work or closures. Where work on road or trails or closures is necessary for emergency protection of life, property or natural resources, Elko County and the FS will notify each other about the emergency as soon as possible.

If Elko County and the FS disagree about any of the above activities discussed at the monthly meetings or outside the monthly meetings, they shall attempt to resolve those disagreements informally. In the event that they are unable to do so, any disputes will be resolved through appropriate legal processes and not through self help. Emergency actions as described in this Section V.C. do not constitute self help in violation of this Agreement. This Section V.C. does not prevent any party from disputing or challenging any emergency action through appropriate legal processes.

Nothing in this Section V.C. modifies Elko County's or the FS's rights, responsibilities and obligations under any existing or future cooperative road and/or bridge agreements.

VI. RELEASE OF CLAIMS AND DISMISSAL OF THE ACTION

A. Dismissal of Claims against Individual Defendants. As described in the Stipulation and Order, Exhibit B, and in consideration of the promises and obligations contained in this Agreement, the United States agrees to release and dismiss with prejudice its claims against the Individual Defendants, and the Individual Defendants agree to release the United States from any claims they have or may have in connection with the Action.

B. Dismissal and Release of Elko County's and United States' Claims. As described in the attached Stipulation and Order, Exhibit B, and in consideration of the promises and obligations contained in this Agreement, the United States agrees to discuss with prejudice and release its claims against Elko County for common law trespass and violations of the CWA arising from the activities to reopen the South Canyon Road in July 1998, and Elko County agrees to dismiss with prejudice its counterclaim against the United States and to release the United States from any civil claims it has or might have in connection with the actions taken by the United States in November and December 1998 on the South Canyon Road.

C. Stipulation and Order. Upon execution of this Agreement, the Parties upon whom the Agreement is binding agree to execute, file and cause to be entered by the Federal District Court, a Stipulation and Order substantially in the form contained at Exhibit B.

VII. COSTS AND FEES

Except as to the costs paid to the mediator, and consistent with the other provisions of the Agreement, each Party agrees to bear and pay such Party's own costs, attorneys' fees, and consultants' and experts' fees, if any, incurred in connection with the Action, the Mediation, and the negotiation of this Agreement and all claims released in this Agreement.

Nothing in this Settlement Agreement may be construed to require any of the Federal Parties to obligate or pay funds, or in any other way take any action in violation of the Anti-Deficiency Act, 31 U.S.C. §1341, or any other applicable appropriations law. Notwithstanding this provision, the Federal Parties will make all reasonable efforts to obtain the resources necessary to carry out the terms of this Agreement and to have the necessary funds allocated.

VIII. INTERPRETATION, CONSTRUCTION, SEVERABILITY,

THIRD-PARTY RIGHTS AND WAIVER

A. Interpretation, Construction and Severability. If any provision of this Agreement requires interpretation or construction, the Parties agree that this Agreement will be interpreted or construed without any presumption that the provisions of this Agreement are to be strictly construed against the Party which itself, or through its agents, prepared the Agreement; it being agreed that the Parties and their respective counsel, if any, and other agents have fully and equally participated in the preparation, negotiation, review and approval of all provisions of this Agreement. Any provision of this Agreement that is held to be invalid or unenforceable is severable unless severance would be inequitable to one or more of the Parties.

B. Third-Party Rights Not Created. Nothing in this Agreement is intended to create any substantive, procedural or other rights in or benefits for any person not a party to this Agreement. This includes any right to sue for enforcement based upon any claim as a third-party beneficiary.

C. No Waiver. Except as otherwise agreed herein, this Agreement does not waive any applicable statutory or administrative prerequisites to challenging any final agency decision.

IX. GOVERNING LAW, DISPUTE

RESOLUTION

The Parties agree that this Agreement will be construed and enforced in accordance with the laws of the United States and the State of Nevada. Each Party further agrees that it will not bring any action to enforce or interpret this Agreement except in the Federal District Court or on appeal to a Federal Appellate Court. The Parties consent to the exclusive jurisdiction of such courts for these purposes. If any dispute arises between the Parties arising out of, or relating to this Agreement or the interpretation or enforcement thereof, or a dispute dealing with the enforcement or implementation of this Agreement ("Dispute"), the Parties agree that they will first attempt to resolve the Dispute through direct negotiations. If such efforts to resolve the Dispute through negotiations fail, the Parties agree to mediate the Dispute with the Parties sharing the mediation costs equally. The Parties will jointly select a mediator. If a Party refuses to participate or the mediation does not produce a prompt resolution, the Dispute will be resolved in the Federal District Court.

X. EXECUTION

A. Counterparts. This Agreement may be executed in two or more counterparts, all of which shall, upon execution and delivery of identical counterparts by all Parties, comprise a single Agreement. The Parties will accept facsimile signatures as original signatures. Each Party will promptly provide the other Parties with original signatures for execution.