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HomeMy WebLinkAbout2016 Ordinance No. 028• • • ORDINANCE NO.~f SERIES OF 2016 BY AUTHORITY COUNCIL Bll,L NO. 26 INTRODUCEDBYCOUNCil., MEMBER GU.,LIT AN ORDINANCE AUTHORIZING FIVE (5) FARM LEASE RENEW AL AGREEMENTS FOR THE FARMS IN THE LITTLETON/ENGLEWOOD WASTEWATER TREATMENT PLANT BIOSOLIDS MANAGEMENT PROGRAM. WHEREAS, the Cities of Littleton and Englewood jointly own properties near Byers, Colorado and Bennett, Colorado which are used for the Littleton/Englewood Wastewater Treatment Plant (IJE WWTP) Biosolids Management Program; and WHEREAS, this Program uses dryland farm property for long-tenn applications of domestic wastewater biosolids generated by the (LIE WWTP); and WHEREAS, the Bennett property is not currently being used for biosolids application, however, farming operations continue to keep the property productive; and WHEREAS, there are ongoing biosolids application on the Byers property covered by the three proposedleases;and WHEREAS, the Englewood City Council authorized four Farm Lease Agreements for a term of one year, renewable for five years for the Fanns in the Littleton/Englewood Wastewater Treatment Plant Biosolids Management Program by the passage of Ordinance No. 14, Series of 2011; and WHEREAS, the passage of this proposed Ordinance authorizes five Farm Lease Agreements commencing on January 1, 2016 and are for a term of one ( 1) year, renewable for five years; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ENGLEWOOD, COLORADO, AS FOLLOWS: Section 1. The City Council of the City of Englewood hereby authorizes a "Fann Lease" between Progressive Farms and the cities of Littleton and Englewood commencing on January 1, 2016, for a term of one ( 1) year, renewable for five ( 5) years, ending on December 31, 2020; attached hereto as Exhibit A. Section 2. The City Council of the City of Englewood hereby authorizes a "Farm Lease" between Craig Farms General Partnership and the cities of Littleton and Englewood commencing on January 1, 2016, for a term of one (1) year, renewable for five (5) years, ending on December 31, 2020; attached hereto as Exhibit B . Section 3. The City Council of the City of Englewood hereby authorizes a "Farm Lease" between Kent Beichle and the cities of Littleton and Englewood commencing on January 1, 1 2016, for a term of one (1) year, renewable for five (5) years, ending on December 31, 2020; attached hereto as Exhibit C. Section 4. The City Council of the City of Englewood hereby authorizes a "Fann Lease" between Gary and Nancy Meier and Jason Meier and the cities of Littleton and Englewood commencing on January 1, 2016, for a term of one (1) year, renewable for five (5) years, ending on December 31, 2020; attached hereto as Exhibit D . Section 5. The City Council of the City of Englewood hereby authorizes a "Farm Lease" between Clint A. Burnet and the cities of Littleton and Englewood commencing on January 1, 2016, for a term of one (1) year, renewable for five (5) years, ending on December 31, 2020, attached hereto as Exhibit E. Section 6. The Mayor is hereby authorized to sign the five (5) Fann Lease Agreements for and on behalf of the City of Englewood. Introduced, read in full, and passed on first reading on the 18th day of July, 2016. Published by Title as a Bill for an Ordinance in the City's official newspaper on the 21st day of July, 2016. Published as a Bill for an Ordinance on the City's official website beginning on the 20th day of July, 2016 for thirty (30) days. Read by title and passed on final reading on the 1st day of August, 2016. Published by title in the City's official newspaper as Ordinance No.~ Series of 2016, on the 4th day of August, 2016. Published by title on the City's official website beginning August, 2016 for thirty (30) days. I, Loucrishia A. Ellis, City Clerk of the City of Englewood, Colorado, hereby certify that the above and foregoing is.,f~rye copy of the Ordinance passed on final reading and published by title as Ordinance No~ Series of 2016. ~g 2 .. . • • • FARMLEASE THIS LEASE is entered into between the Cities of Littleton and Englewood, {collectively referred to hereinafter as "Lessor"), and Progressive Fanm, (referred to hereinafter as 11Lesseen), On this date, Lessor has leased to the Lessee, the following described premises situated in the County of Arapahoe, State of Colorado, to wit: [See Exhibit A attached hereto and made a part hereof] Together with all buildings and improvements on the premises {hereinafter referred to as the "Leased Property") in accordance with the following terms: 1. This lease replaces and' supersedes in its entirety, any prior lease agreement between the parties concerning the Leased Property. This lease shall be for the term of one (1) year, renewable annually for five (5) years commencing on January 1, 2016, and ending on December 31, 2020, at the rent of$12.00 (twelve dollars) per acre per year on farmable acres on the Leased Property, (4,993 acres) for a total annual lease payment of $59,916.00, ~. . .. The lease payment is to be mi¢e pa~lc to the order of: Littletop/Englewood WWTP And delivered to: Littleton/Englewood WWTP Clo Treatment Division Manager 2900 South Platte River Drive Englewood, CO 80110 By December 31 (following the harvest) of each year that this lease is in effect 3. Lessee shall thoroughly plow, cultivate and farm in accordance with good farming practices, all lands comprising the Leased Property that are not in grass, fallowed by mutual agreement of the parties, or otherwise unfarmable. Lessee shall comply with the terms and conditions of all government agricultural programs applicable to the Leased Property, including the Conservation Reserve Program. 4. Lessee shall use the Leased Property as a dryland farm or for livestock grazing (as approved) and for no other purpose whatsoever, and especially will not let or permit the Leased Property to be used for any other business or purpose whatsoever. S. Lessee shall be responsible for all costs and expenses associated with use of the Leased Property as a dryland farm. 6. Lessee shall not assign this lease, sublet, or relinquish the Leased Property without the express written consent of the Supervisory Committee of the Littleton/Englewood WWTP. If the Lessee attempts to assign this lease, sublet, or relinquish the Leased Property without the express written consent of the Supervisory Committee of the Littleton/Englewood WWTP, the Lessee shall forfeit all the rights under or by virtue of this lease, Littleton/Englewood WWTP Farm Lease-Progressive Farms 2016 Page 1 of6 : I t ' '• + 1 ,. -1 .. 7. Lessee shall protect tho Leased Property, including buildings, gates, fences, sluubbery, and improvements thereon from all damages and shall keep the same in the same condition as they are now in, or may be at any time placed in by the Lessor, subject to normal wear and tear. Lessee shall do no act whereby any insurance on buildings may be invalidated and shall not remove, or allow any other person to remove, from the Leased Property any of the buildings, gates, fences, shrubbery, and improvements of any kind. 8. Lessee shall not run fum>ws so as to cause ditches to wash tha Leased Property, unless first having a written consent of the Lessor. Lessee shall clean out and maintain in good repair, during the operation of this Lease, all ditches belonging or appertaining to the Leased Property. 9. Lessee shall well and seasonably put in and tend to the crops grown on the Leased Property, shall have all small grain harvested and threshed by October 1 of each year; and if not harvested and threshed as stated, the Lessor may proceed to do so after ten (10) days' notice to the Lessee, and take enough oftha Lessee's grain to pay C!Xpense of such harvesting or threshing. · 1 O. Lessee shall accept the fences upon said Leased Property as they now are now existing. .... . - 11. Lessee shall, at the expiration of this Lease, or upon a breach by the Lessee of any ~f th~ covenants herein contained, without further notice of any kind, quit and surrender the possession and occupancy of Leased Property in as good condition as careful use and natural wear and tear thereof will peanit. · 12. All goods and chattels, or any other property used or kept' on the Leased Property, shall be held for the rent or damages under this Lease, whether exempt from execution or not, meaning or intending hereby_ to give the Lessor a valid and first lien upon any and all goods. and chattels, crops and other property belonging to the Lessee. 13 . Lessee shall cultivate around any structures or facilities on the Leased Property. 14. The Lessor reserves the right to cancel the lease during its term for any of the following reasons: (a) if the Lessee should take any action or fail to take any action that threatens the Lessor's interest in the Leased Property, including the violation of any environmental laws, rules, regulations or standards; (b) if the Lessee is not farming in a manner that constitutes good farming practices; ( c) if the Lessor determines that it will no longer utilize the Leased Property for the production of crops •. 1 S. Lessor also reserves the right for itself, its agents and its designees, including other government officials, to enter and to have access, at all reasonable times during the term of this lease, to the Leased Property for the pmpose of sampling, application, monitoring, testing, screening, mapping, plotting or doing any other procedure, task or function deemed necessary by Lessor, including, but not limited to, inspecting the Leased Property and to make such repairs, additions, or improvements as Lessor may deem necessary. Littleton/Englewood WWTP Farm Lease-Progressive Farms 2016 Page2 of6 • • • .. 16. It is understood and agreed that the Lessor reserves the right to cancel this lease at its sole discretion. Should Lessor elect to exercise its right of cancellation, it must do so in writing, on or before October 1 prior tcflhe anniversary date hereof, in which event this lease shall be terminated affective on the anniversary date and neither party shall be entitled to further payments or damages as the result of said termination except for any payments due and owing at the time of cancellation. 17. All payments from the Lessee shall become due and payable upon forfeiture of said Lease, or upon abandoning said Leased Property, and if it becomes necessuy fot the Lessor to bring action at law to recover possession, damage or rent, the I.wee agrees to pay a reasonable attomey's fee therefore, and all costs attending the same. 18. Lessee shall indemnify, defend and hold hmnless Lessor and its successors, assigns and representatives from and against any and all dam.ages, claims, losses, costs, liabilities, and expenses of any kind whatsoever (including but not limited to reasonable attorney fees) which may be asserted against or suffered by Lessor or the Leased Property or any part thereof, as a result of, on account of or arising from (i) any breach of any covenant, representation; promise, warranty or agreement made by Lessee, or (ii) injuries or damages to person or property resulting or alleged to result from any fault or negligence of Lessee or bis agents or employees, or from·-th.D possession,, use, occupancy, or maintenance otth~Leased Property by u-.s~ee, bis .igents, employees, or affiliatc,s. 19. Lessor reserves the right to sell, contract to sell, or grant easements or rights-of-way over, through, under, or on, tha Leased Property at any time during tho tenn of this lease, subject to tha rights and interests of the Lessee hereunder. 20. All notices, demands, or other documents required or desired to be given, made or sent to either Party under this Agreement shall be made in writing. shall be deemed effective upon receipt and shall be personally delivered or mailed postage prepaid, certified mail, return receipt requested, as follows: TO LESSOR: Littleton/Englewood WWTP Clo Treatment Division Manager 2900 South Platte River Drive Englewood, CO 80110 TO LESSEE: Progressive Fanns, Clo Mark Linnebur 800 U.S. Highway 36 Byers, CO 80103 The addresses for notices may be changed by written notice given to the other Party in the manner provided above. This lease shall be in effect as of the date first above written. (Signature&follow on separate pages) Uttleton/Englewood WWTP Farm Lease-Progressive Farms 2016 Page 3 of6 LESSOR: • CITY OF ENGLEWOOD By: Joe Jefferson, Mayor Dato: CnY OFLITI'LETON By: '• ,. ... . ... '---·~-~---·------------Dato: • Littleton/Englewood WWTP Fann Lease-Progressive Farms 2016 Page4of6 . , •' ' .. • LESSEE: PROGRP.SSIVE FARMS I, Date: ~ ' • I • I -' ' ·· ..... . . ~ .... :• -~ ·_, -~ ... Littleton/Englewood WWTP Farm Lease -Progressive Farms 2016 PageS of6 ' . . ; • • Exhibit A Parcel I: .. The West one-half of Section 28, ell of Section 29, the West one-half of Section 32, except that part of said Section 32 conveyed to Adams County by Instrument recorded in Book 244 at Page 586, West one-half of Section 33, all in Township 3 · South Range 57 West of the 6th Principal Meridian, County of Adams, State of Col~rado. 1 • • ·1 •• · Parcel tt: .-. .. .. _ , . . The West one-half of Section 4, all of Section S, Township 4 South, Range S7 West qf the 6th Principal Meri<:}ian, County of Arapahoe, State of Colorado. Parcel m: · .. ,.-. The South one-half of the Southeast quarter of Section 20; all of Section 21, except the North 40 feet; the North one-half of S~tion 28; all of Section 29, except the East 40 feet; ail in · Township 4 South, Range 57 West of the &Ii Principal Meridian, County of Arapahoe, State of Colorado. · · · = • · • • • : .,. . ·• • • • -· I J _" P~cel W.:~ •i • ~ -,P \. All of Section 18, except the East 40 feet; the North one-half of S~c~on 19, except the Bast 40 feet; the North one-h!!.l( e."tcept the West ·40 (eet; the Southwest qua.Tier, except the We.st 40 feet; tb,e North one-~ of the Sou~east quart~ of ~ecti1;11120; all in 1'0W1:i8hi1> 4 South, Range 57 West of the 6th Principal Meridian, County of Ai~pahoe, State' of Co(9,:ado·,.. : ' . . . . · . O I • I ~ •. , . -' . ·,,• . •' ... . -. ' Littleton/Englewood WWTP Farm Lease-Progressive Farms 2015 Exhibit A • FARMLEASE TillS LEASE is entered into between the Cities of Littleton end Englewood, (collectively referred to hereinafter as 1'Lessor11 ); and Craig Farms General Partnership, (referred to hereinafter as ''Lessee"). On this date, Lessor bas leased to the Lessee, the following described premises situated in the County of Arapahoe, State of Colorado, to wit: The E½ of Section 32, Township 3 South, Range 57 West of the ~ P .M. consisting of approximately 320 acres, more or less, Together with all buildings and improvements on the premises (hereinafter referred to as the "Leased Property") in accordance with the following tenns: 1. This lease replaces and supersedes in its entirety, any prior lease agreement between the parties concerning the Leased Property. This lease shall be for the term of one (1) year, renewable annually for five (5) years commencing on January 1, 2016, and ending on December 31, 2020, at the rent of $12.00 (twelve dollars) per acre per year on farmable acres on the Leased Property, (320 acres) for a total annual lease payment of$3,840.00. • ~ ._ ....... • ~ I ' ·• • • • 2. . TheJ~e payment is to be made payable to the 'order of: Littletan/Englewuod WWTP And delivered to: Littleton/Englewood WWTP Clo Treatment Division Manager 2900 South Platte River Drive Englewood, CO 80110 By December 31 (following the harvest) of each year that this lease is in effect. 3. Lessee shall thoroughly plow, cultivate and farm in accordance with good farming practices, all lands comprising the Leased Property that are not in grass, fallowed by mutual agreement of the parties, or otherwise unfarmable. Lessee shall comply with the terms and conditions of all government agricultural programs applicable to the Leased Property, including the Conservation Reserve Program. 4. Lessee shall use the Leased Property as a dryland fann or for livestock grazing (as approved) and for no other puq,ose whatsoever, and especially will not let or permit the Leased Property to be used for any other business or puxpose whatsoever. · S. Lessee shall be responsible for all costs and expenses associated with use of the Leased Property as a dryland farm. 6. Lessee shall not assign this lease, sublet, or relinquish the Leased Property without the express written consent of the Supervisory Committee of the Littleton/Englewood WWTP. If the Lessee attempts to assign this lease 1 sublet, or relinquish the Leased Property without the express written consent of the Supervisory Committee of the Littleton/Englewood WWTP, the Lessee shall forfeit all the rights under or by virtue of this lease. Littleton/Englewood WWTP Fann Lease -Craig Fanns 2016 Page 1 ofS 7. Lessee shall protect the Leased Property, including buildings, gates, fences, shrubbery, and improvements thereon from all damages and shall keep the same in the same condition as they arc now in, or may be at any time placed in by the Lessor, subject to nonnal wear and tear. Lessee shall do no act whereby any insurance on buildings may be invalidated and shall not remove, or allow any other person to remove, from the Leased Property any of the buildings, gates, fences, shrubbery, and improvements of any kind. 8. Lessee shall not run furrows so as to cause ditches to wash the Leased Property, unless first having a written consent of the Lessor. Lessee shall clean out and maintain in good repair, during the operation of this Lease, all ditches belonging or appertaining to the Leased Property. 9. Lessee shall well and seasonably put in and tend to the crops grown on the Leased Property, shall have all small grain harvested and threshed by October 1 of each year; and if not harvested and threshed as stated, the Lessor may proceed to do so after ten (10) days' notice to tho Lesseo, and take enough of the Lessee's grain to pay expense of such harvesting or threshing. 1 O. Lessee shall accept the fences upon said Leased Property as they now arc now existing . .. 11. Lessee 9hall, at thc(expiration of this Leas~ ·or upon a breach by the Lessee ·of any df'the covenants harein contained, without further notice of any kind, ew,it and surrender the . . :, possession and occupancy of Leased Property in as good condition as careful uso and natural • wear and tear thereof will permit. 12. All goods and cbatteis, or any other property used or kept on the Leased Property, shall be held for tho rent or damages under this Leaso, whether exempt from execution or not, meaning ~r intending h~eby to give tho ~~r av~ ~d first lien upon.any and _ all goods and chattels, crops and other propmty belonging to tho Lessee. 13. Lessee shall cultivate around any structures or facilities on tho Leased Property. 14. 'The ~sor reserves the right to ~eel the lease during its term fur any of the following reasons: (a) if the Lessee should take any action or mil to take any action that threatens tho Lessor's interest in the Leased Property, including the violation of any environmental laws, rules, regulations or standards; (b) if the Lessee is not fanning in a manner that constitutes good farming practices; ( c) if the Lessor determines that it will no longer utilize the Leased Property for the production ~f crops~ _ 15. Lessor also reserves the right for its~ its agents and its designees, including other government officials, to enter and to have access, at all reasonable times during the tenn of this lease, to the Leased Property for the purpose of sampling, application, monitoring, testing, screening, mapping, plotting or doing any other procedure, task or function deemed necessary by Lessor, including, but not limited to, inspecting the Leased Property and to make such repairs, additions, or improvements as Lessor may deem necessary. 16. It is understood and agreed that the Lessor reserves the right to cancel this lease at its sole discretion. Should Lessor elect to exercise its right of cancellation, it must do so in writing, on or before October 1 prior to the wmiversary date hereo~ in which event this lease shall be terminated Littleton/Englewood WWTP Farm Lease-Craig Fan:m 2016 Page2of S • • effective on the anniversary date and neither party shall be entitled to further payments or damages as the result of said t:mnioation except for any payments due and owing at the time of cancellation. 17. All payments from the Lessee shall become due and payable upon forfeiture of said Lease, or upon abandoning said Leased Property, and if it becomes necessary for the Lessor to bring action at law to recover possession, damage or rent, tha Lessee agrees to pay a reasonable attorney's fee therefore, and all costs attending the same. 18. Lessee shall indemnify, defend and hold hmmless Lessor and its successors, assigns and representatives from and against any and all damages, claims, losses, costs, liabilities, and expenses of any kind whatsoever (including but not limited to reasonable attorney fees) which may be asserted against or suffered by Lessor or the Leased Property or any part thereat as a result o( on account of or arising from (i) any breach of any covenant, representation; promise, warranty or agreement made by Lessee, or (ii) injuries or damages to person or property resulting or alleged to result from any fault or negligence of Lessee or bis agents or employees, or from the possession, use, occupancy, or maintenance of the Leased Property by Lessee, bis agents, employees, or affiliates. 19. Lessor reserves the right to sell, contract to sell, or grant easements or rights-of-way over, through, umler, or on,-the Leased froperty_,at any time during ~e term ~fthis lease, subject to the rights and interests of the Lessee hereunder. 20. All notices, demands, or other documents required or desired to be given, made or sent to either Party under this Agreement shall be made in writing, shall be deemed effective upon receipt and shall be personally delivered or mailed postage prepaid, certified mail, return receipt requested, as follows: TO LESSOR: TO LESSEE: Littleton/Englewood WWTP Clo Treabnent Division Manager 2900 South Platte River Drive Englewood, CO 80110 Craig Farms General Partnership, C/o Jerry Craig 77201 U.S. Highway 36 Byers, CO 80103 The addresses for notices may be changed by written notice given to the other Party in the manner provided above. This lease shall be effective as of the date first above written. (Signatures follow on separate pages) Littleton/Englewood WWTP Farm Lease-Craig Farms 2016 Pagel of5 LESSOR: • CITY OF ENGLEWOOD By: Joe Jefferson, Mayor Date: CITY OF UITLEI'ON By: ...... , .___, ______________ ___,..... !>ate: • Littleton/Englewood WWTPFannLease-CraigFanns 2016 Page 4of S ESS~: CRAIG FARMS GENERALPAR.TNER.SHJP Date: . . . Littleton/Englewood WWTP Farm Lease -Craig Farms 2016 Page 5 ofS FARMLEASE THIS LEASE is entered into between the Cities of Littleton and Englewood, ( collectively referred to hereinafter as "Lessor"), and Kent Belc1',le, (rcfem:d to hereinafter as "Lesseet'), On this date, Lessor has leased to tho Lessee, the following described premises situated in the County of Arapahoe, State of Colorado, to wit: That tract of land described as the W1/2 and the W½ of the E½ of Section 25, all in Township S South; Range 63 West of the 6th P .M., containing 476 acres, more or less, Together with all buildings and improvements on the premises (hereinafter referred to as the "Leased Property') in accordance with tha following tC1'Ill8: 1. This lease replaces and. supersedes in its entirety, any prior lease agreement between the parties concerning the Leased Property. This lease shall be for the tenn of one (1) year, renewable annually for five (S) years commencing on January 1, 2016, and ending on December 31, 2020, at the rent of $12.00 (twelve dollars) per acre per year on fermable acres on the Leased _Property, (476 acres) for a total annual lease payment ofSS,712.00. 2. Th~ iease payment is to be made payabte·to the order of. Littleton/Englewood WWTP And delivered to: -Littleton/Englewood WWTP Clo Treabncnt Division Manager 2900 South Platte River Drive Englewood, CO 80110 By December 31 (following the harvest) of each year that this lease is in effect 3. Lessee shall thoroughly plow, cultivate and farm in accordance with good fanning practices, all lands comprising the Leased Property that arc not in grass, fallowed by mutual agreement of the parties, or otherwise unfarmable. Lessee shall comply with the tenns and conditions of all government agricultural programs applicable to the Leased Property, including the Conservation Reserve Program. 4. Lessee shall use the Leased Property as a dryland fann or for livestock grazing (as approved) and for no other purpose whatsoever, and especially will not let or permit the Leased Property to be used for any other business or purpose whatsoever. 5. Lessee shall be responsible for all costs and expenses associated with use of the Leased Property as a dryland farm. 6. Lessee shall not assign this lease, sublet, or relinquish the Leased Property without the express written consent of the Supervisory Committee of the Littleton/Englewood WWTP. If the Lessee attempts to assign this lease, sublet, or relinquish the Leased Property without the express written consent of the Supervisory Committee of the Littleton/Englewood WWTP, the Lessee shall forfeit all the rights under or by virtue of this lease. Littleto~glewood WWTP FmmLease-KentBeichle Farm2016 Page 1 ofS '··.'.··\ ! • + C 7. Lessee shall protect the Leased Property, including buildings, gates, fences, shrubbery, and improvements thereon from all damages and shall keep the same in the same condition as they are now in, or may be at any time placed in by the Lessor, subject to nonnal wear and tear. Lessee shall do no act whereby any insurance on buildings may be invalidated and shall not remove, or allow any other person to remove, from the Leased Property any of the buildings, gates, fences, shrubbezy, and improvements of any kind. 8. Lessee shall not run furrows so as to cause ditches to wash the Leased Property, unless first having a written consent of the Lessor. Lessee shall clean out and maintain in good repair, during the operation of this Lease, all ditches belonging or appertaining to the Leased Property. 9. Lessee shall well and seasonably put in and tend to the crops grown on the Leased Property, shall have all small grain harvested and threshed by October 1 of each year; and if not harvested and threshed as stated, the Lessor may proceed to do so after ten (10) days' notice to the Lessee, and take enough of the Lessee's grain to pay expense of such harvesting or threshing. 1 o. Lessee shall a~cept the fences upon said Leased Property 8:1 they now are now existing. ' ' . 11. Lessee shall, at the expiration of this Lease, or upon a breach by the Lessee of any of the cuvcmi.nts herein contained, without furthsr notice of any kind, quit and swnmdc,r thi:., possession and occupancy of Leased Property in as good condition as careful use and iµitural wear and tear thereof will permit . . 12. All goods and chattels, or any other property used or kept on the Leased Property, shall be held for the rent or damages under this Lease, whether exempt from execution or not, meaning or intending hereby to give the Lessor a. valid and. first lien upon any and all goods . and chattels, crops and other property.belonging to the Lessee:· .. . 13. Lessee shall cultivate around any structures or facilities on the Leased Property. 14. The Lessor r~erves the right to cancel the lease during its term for any of the following reasons: (a} if the Lessee should take any action or fail to take any action that threatens the Lessor's interest in the Leased Property, including the violation of any environmental laws, rules, regulations or standards; (b) if the Lessee is not farming in a manner that constitutes good farming practices; ( c} if the Lessor determines that it will no longer utilize the Leased Property _for the p~ducti_on of crops.. .. 1S. Lessor also reserves the right fur itsel~ its agents and its designees, including other government officials, to enter and to have access, at all reasonable times during the term of this lease, to the Leased Property for the pmpose of sampling, application, monitoring, testing, screening, mapping, plotting or doing any other procedure, task or function deemed necessary by Lessor, including, but not limited to, inspecting the Leased Property and to make such repairs, additions, or improvements as Lessor may deem necessary, Littleton/Englewood WWTP Farm Lease-Kent Beichle Fann 2016 Page2 ofS • 16. It ia understood and agreed that the Lessor reserves the right to cancel this lease at its sole discretion. Should Lessor elect to exercise its right of cancellation, it must do so in writing. on or before October 1 prior to tho anniversary date hereo~ in which event this lease shall be terminated effective on the anniversary date and neither party shall be entitled to further payments or damages as the result of said termination except for any payments due and owing at tho time of cancellation. · 17. All payments from tho Lessee shall become due and payable upon forfeiture of said Lease, or upon abandoning said Leased Property, and if it becomes necessary for the Lessor to bring action at law to recover possession, damage or rent, tho Lessee agrees to pay a reasonable attorney's fee therefore, and all costs attending the same. 18. Lessee shall indemnify, defend and hold harmless Lessor and its successors, assigns and representatives from and against any and all damages. claims, losses, costs, liabilities, and expenses of any kind whatsoever (including but not limited to reasonable attorney fees) which may be asserted against or suffered by Lessor or the Leased Property or any part thereo~ as a result of, on account of or arising from (i) any breach of any covenant, representation; promise, warranty or agreement made by Lessee, or (ii) injuries or damages to person or property resulting or alleged to result from any fault or negligence of Lessee or bis agents or employees, m from,thc,.eossession,·use, occupancy, at maintenance ot:the Leased ~perty by Less~!,\ bis agents, employees, or affiliates. 19. Lessor reserves the right to sell, contract to sell, or grant easements or rights-of-way over, through, under, or on, the Leased Property at any time during tho term of this lease, subject to tho rights and interests of the Lessee hereunder. 20. All notices, demands, or other documents required or desired to be given, made or sent to either Party under this Agreement shall be made in writing. shall be deemed effective upon receipt and shall be personally delivered or mailed postage prepaid, certified mail, retum receipt requested, as follows: · TO LESSOR: Uttleton/Englewood WWTP Clo Treatment Division Manager 2900 South Platte River Drive Englewood, CO 80110 TO LESSEE: Kent Beicble 747S South County Road 145 Bennett, CO 8010 The addresses for notices may be changed by written notice given to the other Party in the manner provided above. This lease shall be effective as of the date first above written. (Signatures follow on separate pages) Littleton/Englewood WWTP Fann Lease -Kent Beicble Fann 2016 Page 3 of5 • LESSOR: CITY OF ENGLEWOOD By: Joe Jeff er son, Mayor Date: CTIYOF UITLETON By. Date: • LESSEE: ~& By:~chle Date: ;;(Jf [16 --... ._. --· -...... • o I I • Littleton/Englewood WWTP Fann Lease-Kent Beichle Farm 2016 Page 5 ofS • '. ; . ' I • • • . • . • 1 ••• FARM LEASE ; . ' . ··.,·-... . ··.,~ ·-.~:~•~.~-.-' · .. : '··~·.· \:•.•:• ·· .. : I • •,' • • • • • : • •, ••, \. ; .: • ••' • - 1 • j. ■ • • • I • • 1 • • IBIS LEA~~ is ent~d into between tho ~!ties qfµ.~efuri and EnglewQOd, (coll~v:ely refen-ed to heicinafter ~ 1'Les~or'~, and GIP')' &lid N aii~y'Mele~ :~~ Jas:on M~er, '(referred to hcreinat\~ ~ "~esse~'). ~ ~ ~ ·~·~.l~ed to ~~-:USS~~ fuq6~g . /. described premises situated in the County of Arapahoe, S~te of Colo!'lldo, to wit: • , · · ·. ·, · ::,' ._;'; :· >'!<,/.:}' :' ·,.:<_\.'/_:/,< ::,: ·' :: . '; ......... : ~ ·:: \•' ... ~· >· ... _\ . ' .. 1 ..... : • ;:,_ ••• · · •. · ·. · [Sec Exhibit A attached heteto and made a part hereof] . '· :_. :; ···: .:-,.\~··>:~·:•.-·/· . .-.~:-~·-/.-:.·,. :\.\·:.:· .. · .. · .. ··.·._ :· ... '_'/\ ' . -· .. · :. Together wi~ Ill! ~dings and _impiov~ents on the~~ (her~inafter ref~ f9 ~ ~~ ... "Leased ~roperty? µi JlCC9~ance Vfitl;i_~e roµo!{ing t~:'_ . · ; ·: ·.·_. • -... : _ . · · • • • • • • '•• •: ; •· r • • • •. ~ ,, • • • : 1. This lease replaces and supms~es .in it.9 ei,~_rety, any pripr le~e agreement between the parties ~~~g ~e~~~ ~~: .Thi~ l~e s~ P.~. fc;,~_tl\e term of _one.(_1) ~!Ii, renewable anµuaUr for ~ve (5) years co~encmg on ,an~ 1, 2016, and ending on December 31, 202,0; · . · ·. · ·.. . . _,; ·, : . · •. . : ·_ ·. · _·. ·:.:;:-_;: .. _'::·-·: >·-\: .. : .. : :•,·r .. :.-·:: :; __ · . .:-: .. ;-_.·_. .... :·.···_: _: . . • .A;t ~e tCJ;1t ~f $ ~2_.00 (twely~ dol,l_ars) per acre pct year on (armab,le acrc;s ·on the Leased.Property, (792.6 'acires) for $~511.20 . • ·:· ._ · ··. . . a ; At the rent c_f$8.00 (eigh~ dollars) per acre-on grazing acres on the Leased Properly (478 acres) for $3,824.00 . • . For ~,' total annual lease payment of$ l,3,335.20. • • I • ~ J • • • • 2. The lease payment is to be made p~~le to the order of: Littl~ton/Englewoo4 WWTP ,, ' . And delivered to: . . . .. Littleton/Englewood WWTP . Clo Treatm.entDi~~n ~ger 2900 South Platte River Drive Englewood, CO 80110 ' .... I By December 31 (following the harvest) of each year that qua lease is in effect. .·' 3. Lessee shall thoroughly plow, cultivate and farm in accordance with good fanning practices, all lands CQmprising the ,Leased :Property that are not in grass, fallowed by mutual agreement of the p~~s, oi' o~ei;wise_ unfarmabie . Lessee shall comply with the ~erms and conditions of all government agricultural programs appljcable to the Leased Property, including the Conservation Reserve Program. 4. Lessee shall use the Leased Property as a dryland farm or for livestock grazing (as approved) and for no other purpose whatsoever, and especially will not let or pennit the Leased Property to be used for any other business or purpose whatsoever. 5. Lessee shall be responsible for all costs and expenses associated with use of the Leased Property as a dryland farm. Littleton/Englewood WWTP Farm Lease -Meier Farm 2016 Page 1 of S 6, Lessee shall not assign thia lease, sublet, or relinquish the Leased Property without the express written consent of the S1,1pervisory Committee of the Littleton/Englewood WWTP. If the Lessee attempts to assign this lease, sublet, or relinquish the Leased Property without the express written consent of the Supervisory Committee of the Littleton/Englewood WWTP, the Lessee shall forfeit all the rights under or by virtue of this lease. 7. Lessee shall protect the Leased Property, including buildings, gates, fences, shrubbery, and improvements thereon from all damages and shall keep the same in the same condition as they are now in, or may be at any time placed in by the Lessor, subject to normal wear and tear. Lessee shall do no act whereby any insurance on buildings may be invalidated and shall not remove, or alloY'{ any other person to remove, from the Leased Property any of the buildings, gates, fences, shrubbery, end improvements of any kind. 8, Lessee shall not run furrows so as to cause ditches to wash the Leased Property, unless first having a written consent of the Lessor. Lessee shall clean out end maintain in good repair, during the operation of this Lease, all ditches belonging or appertaining to the Leased Property, 9. Lessee shall well and seasonably put in and tend to the crops grown on the Leased Property, shall have all small grain harvested and threshed by October 1 of each year; and if not -• ,IDII'\•e~ threshed-as ~(:Cl, ~.Leswrma.y_proce-:d.to ,do.so a..f\erten(lO)da}rs' notice to -· tho Lessee, and take enough of the Lessee's grain to · pay expense of ~ch harvesting or threshing. . . 1 0. Lessee shall accept tho fences upon said Leased Property as they now ere now existing. 11. Lessee sliali, at the expiration of this Lease, or up~n a breach by the· Lessee of any of the covenants herein contained, without further notice of any kind, quit end surrender the possession and occupancy of Leased Property in as good condition as careful use and natural wear and.tear thereof will perinit.·· · . · -·· ·. ·· .. _ -· · · · . . 12. All goods and chattels, or any other properly used or kept on the Leased Property, shall be held for the rent or damages under this Lease, whether exempt from execution or not, meaning or intending hereby to give the Lessor a valid and first lien upon any and all goods and chattels, crops and other property belonging to tho Lessee. 13. Lessee shall cultivate around eny structures or facilities on the Leased Property. 14. The Lessor reserves the right to cancel the lease during its term for any of the following reasons: (a} if the Lessee should take any action·or fail to take any action that threatens the Lessor's interest in the Leased Property, including the violation of any environmental laws, rules, regulations or standards; (b) if the Lessee is not farming in a manner that constitutes good farming practices; ( c) if the Lessor determines that it will no longer utilize the Leased Property for the production of crops. 15. Lessor also reserves the right for itsel( its agents and its designees, including other • government officials, to enter and to have access, at all reasonable times during the term of this lease, to the Leased Property for the purpose of sampling, application, monitoring, testing, screening, mapping, plotting or doing any other procedure, task or function deemed necessary by Lessor, including, but not limited to, inspecting the Leased Property and to make such Littleton/Englewood WWTP FannLeasc-MeierFarm2016 Page 2 of S • repairs, additions, or improvements as Lessor may deem necessary. 16. It is understood and agreed that the Lessor reserves the right to cancel this lease at its sole discretion. Should Lessor ~ect to exercise its right of cancellati.011t it must do so in writing, on or before October 1 prior to the anniversary date hereof, in which event this lease shall be tcnninated effective on the anniversary date and neither party shall be entitled to further payments or damages as the result of said termination except for any payments due and owing at the time of cancellation. 17. All payments from the Lessee shall become due and payable upon forfeiture of said Lease, or upon abandoning said Leased Property, and if it becomes necessary for the Lessor to bring action at law to recover possession, damage or rent, the Lessee agrees to pay a reasonable attomey's fee therefore, and all costs attending the same. 18. Lessee shall indemnify, defend and hold harmless Lessor and its successors, assigns and representatives from and against any and all damages, claims, losses, costs, liabilities, and , ~peru~c;~ .qfJ!.P.Y .ltj_nd whatsoever-(inclTJdiµg-·but not .limited to r:ason.e.ble·attomel'-fec=i).whlch ~ - may be asserted against or suffered by Lessor or the Leased Property or any part thereof, as a result of, on account of or arising from (i} any breach of any covenant, representation; promise, warranty or agreement made by Lessee, or (ii) injuries or damages to person or property resulting or alleged to result from any fault or negligence of Lessee or his agents or employees, or from the possession, use, occupancy, or maintenance of the Leased Property by Lessee, his agents, employees, or affiliates. 19. Lessor reserves the right to sell, contract to sell, or grant easements or rights-of-way over, through. under, or on, the Leased Property at any time during the term of this lease, subject to the rights and interests of the Lessee hereunder. 20. All notices, demands, or other documents required or desired to be given, made or sent to either Party under this Agreement shall be made in writing, shall be deemed effective upon receipt and shall be personally delivered or mailed postage prepaid, certified mail, retum receipt requested, as follows: TO LESSOR: :..ittleton/Englewood WWTP Yo Treatment Division Manager ?900 South Platte River Drive ~nglewood, CO 80110 TO LESSEES: Gary and Nancy Meier 3265 SCR 185 Byers, CO 80103 £'he addresses for notices may be changed by written notice given to the other Party in the nanner provided above. rhis lease shall be in effect as of the date first above written. Littleton/Englewood WWTP Farm Lease-Meier Fann 2016 Page3 ofS (StgnalUre.r follow 011 separale page.s) • . ...... . •,. ·.• • ..... • Littleton/Englewood WWTP Fwm.Leas11-Meier Fann 2016 Page4of5 LESSOR: CITY OF ENGLEWOOD By: Joe Jefferson, Mayor Date: CITY OF UITLETON By: Date: , ·• .. Littleton/Englewood WWTP Farm Lease -Meier Fann 2016 PageS ofS LESSEES: Date: • Littleton/Englewood WWTP Farm Lease-Meier Farm 2016 Page6 ofS • Bxlu'bit A LEGAL DESCRIPTION Parcel I: The East ½ of Section 33, Township 3 South, Range 57 West of the (;th P .M.,. County of Adams, State of Colorado. Parcel II: The West½ of Section 8, Township 4 South, Range S7 West of the~ P.M., EXCEPT the West 40 feet for county road pwposes as described in Quit Claim Deed recorded September 8, 1948, in Book 618, at Page 121, County of Arapahoe, State of Colorado. Parcel ill: Section 17, Township 4 South, Range S7 West of the 6th P .M., EXCEPT the West 40 feet and the South 40 feet thereof as described in Quit Claim Deed recorded September 8, 1948, in Book 618, Page 128, County of Arapahoe, State of Col~rado. Littleton/Englewood WWTP Fann Lease-Meier Farm 201 S Exhibit A • . .. • • FARMLEASE THIS LEASE is entered into between the Cities of Littleton and Englewood, ( collectively referred to hereinafter as ''Lessor'1, and Clint A. Burnet, (referred to hereinafter es "Lessee"). On this date, Lessor has leased to the Lessee, the following descn'bed premises situated in the, County of Arapahoe, State of Golorado, to wit: That tract ofland described as the S½ of Section 23, except the W 40 feet deeded in Book 636 at Page 91 and the SW¼ of Section 24, all in Township S South; Range 63 West of the (;th P.M., containing 471 acres, more or less, Together with all buildings and improvements on the premises (hereinafter referred to as the "Leased Property'1 in accordance with the following terms: 1. This lease replaces and supersedes in its entirety, any prior lease agreement between the parties concerning the Leased Property. This lease shall be for the term of one (1) year, renewable annually for five (5) years commencing on January 1, 2016, and ending on December 31, 2020, at the rent of $12.00 (twelve dollars) per acre per year on farmablc acres o!1 th~ I.:eased PI?perty, (471 acres) for a total annual lease payment of $5,652.00. 2. The lease payment is to be made payable to the order of Littleton/Englewood WWTP And delivered to: Littleton/Englewood WWI'P Clo Treatment Division Manager 2900 South Platte River Drive, Englewood, CO 80110 By December 31 (following the harvest) of each year that this lease is in effect. 3. Lessee shall thoroughly plow, cultivate and farm in accordance with good fanning practices, all lands comprising the Leased Property that are not in grass, fallowed by mutual agreement of the parties, or otherwise unfarmable. Lessee shall comply with the tenns and conditions of all govemment agricultural programs applicable to the Leased Property, including the Conservation Reserve Program. 4. Lessee shall use the Leased Property as a dryland farm or for livestock grazing (as approved) and for no other purpose whatsoever, and especially will not let or pennit the Leased Property to be used for any other business or pmpose whatsoever. S. Lessee shall be responsible for all costs and expenses associated with use of the Leased Property as a dryland farm. 6. Lessee shall not assign this lease, sublet, or relinquish the Leased Property without the express written consent of the Supervisory Committee of the Littleton/Englewood WWTP. If the Lessee attempts to assign this lease, sublet, or relinquish the Leased Property without the '· Littleton/Englewood WWTP Fann Lease-Clint Burnet Fann 2016 Page 1 of5 I• f . .'.·1· . -.· • .... , • express written consent of the Supervisory Committee of the Littleton/Englewood WWTP, the Lessee shall forfeit all the rights under or by virtue of this lease. 7. Lessee shall protect the Leased Property, including buildings, gates, fences, shmbbery, and improvements thereon from al1 damages and shall keep the same in the same condition as they arc, now in, or may be at ~y time placed in by the Lessor, subject to normal wear and tear. Lessee shall do no act whereby any insurance on buildings may be invalidated and shall not remove, or allow any other person to remove, from the Leased Property any of the buildings, gates, fences, shmbbery, and improvements of any kind. 8. Lessee shall not run furrows so as to cause ditches to wash the Leased Property, unless first having a written consent of the Lessor. Lessee shall clean out and maintain in good repair, during the operation of this Lease, all ditches belonging or appertaining to the Leased Property. 9. Lessee shall well and seasonably put in and tend to the crops grown on the Leased Property, shall have all small grain harvested and threshed by October 1 of each year; and if not harvested and threshed as stated, the Lessor may proceed to do so after ten (10) days• notice to the Lessee, and take enough of the Lessee's grain to pay expense of such harvesting or tru.•5e~g; • : ' .. .... . l 0. Lessee shall accept the fenceM upun said Li::a.-1ed Prupmy HS th"Y now are now existing. • 11. Lessee shall, at the expiration of this Lease, or upon a breach by the Lessee of any of the covenants herein contained, without further notice of any kind, quit and surrender tho possession and occupancy of Leased Property in as good condition as careful use and ~tural wear and tear thereof will pemtlt · 12. All goods and chattels, or any other property used or kept on the Leased Properfy, shall be held for the rent or damages under this Lease, whether exempt from execution or not, meaning or intending hereby to give the Lessor a valid and first lien upon any and all goods and chattels, crops and other property belonging to the Lessee. 13. Lessee shall cultivate around any structures or facilities on the Leased Property. 14. The Lessor reserves the right to cancel the lease during its term for any of the following reasons: (a) if the Lessee should take any action or fail to take any action that threatens the Lessor's interest in the Leased Property, including the violation of any environmental laws, rules, regulations or standards; (b) if the Lessee is not farming in a manner that constitutes good fanning practices; ( c) if the Lessor determines that it will no longer utilize the Leased Property for the production of crops. 15. Lessor also reserves the right for itself, its agents and its designees, including other government officials, to enter and to have access, at all reasonable times during the term of this lease, to the Leased Property for the purpose of sampling, application, monitoring, testing, screening, mapping, plotting or doing any other procedure, task or function deemed necessary by Lessor, including, but not limited to, inspecting the Leased Property and to make such repairs, additions, or improvements as Lessor may deem necessary. Littleton/Englewood WWTP Farm Lease-Clint Burnet Farm 2016 Page 2 of5 16. It is understood and agreed th$ the Lessor reserves the right to cancel this lease at its sole discretion. Should Lessor elect to exercise its right of ~cellation, it must do s~ i-,. writing, on or before October 1 prior to the anniversary date hereo( in which cv~ this leasa shall be terminated effective on the anniversary date and neither party shall b~ entitled to further payments or damages as the result of said tmmination except for any payments due and owing at the timo _ of ~cellatio~ : ' . '. .-. . . . . . . ' :. ' . . .. ' •. • t • I 1 ♦ 1 1 \. 'I .~ •; • • ,•, t '/ • :, 0 ' ' . 17, All payments ~m the Lessee !ihall b~ome due and payable upon forfeiture of said Lease, or upon abandoning said L~ased Property, an4 if it becomes necessary for the Lessor to bring action at law to recover po~ses~ou, damage or rent, the Lessee agrees to pay a reasonable attorney's_ f~~ ~ere~re, and all costs · att~g the s~e. 18._ . L~ssee ~ indemnify, defend and h~Jd harmless Lessor and its SUCC'?9SOrs~· assigns end representatives from an,d against ~y and all damages, claims, losses, costs, lial,ilitjes, and expenses of ~y°kind whats9ever (including but not limited to reJ!Sonablc attorney fees) whjch may be ass~eci against c;,r suffered by Lessor o,;, the L~~ed Prop'erty or any p~ thereof, as a result of, OJ;l ~count of or ~ from (i) any breach of any covenant, representa~9il; promise, warranty or agreement made by Lessee, or (ii) injuries or damages to person or property resulting or alleged to result from· any fault or negligence of Lessee or his ~gents or eplP.loyces, ,or fromi;thA possessioDt use, m:cupancy;,.or-maint~ce of the· Leased Property by Lessee, his. agents, employees, or_~ates, 19. Lessor reserves the right to sell, contract to serl, or grant easements or rights-of-way over, through, under, or on, the Leased ~perty at any time during th= tenn of this lease, subject to · the rights and interests of the Lessee hereunder. 20, All notices, demands, or other documents required or desired to be given, made or sent to either Party under this Agreement shall be made in writing, shall be deemed effective upon receipt and shall be personally delivered or mailed postage prepaid, certified mail, retum receipt requested, as follows: TO LESSOR: Littleton/Englewood WWTP Clo Treatment Division Manager 2900 South Platte River Drive Englewood, CO 80110 TO LESSEE: Clint A. Bumet 50555 East County Road 30 Bennett, CO 80102 The addresses for notices may be changed by written notice given to the other Party in the manner provided above. This lease shall be effective as of the date first above written. (Signatures follow on separate pages) Littleton/Englewood WWTP Farm Lease -Clint Burnet Fann 2016 Page] ofS • • • LESSOR: CITY OF ENGLEWOOD · By: J-oe Jefferson, Mayor Date: CITY OF llITLETON ,·,· . By: Date:.· • "-.-.. , ' ' . Littleton/Englewood WWTP Fann Lease -Clint Burnet Farm 2016 Page4of5 LESSEE: 3 .,,, -1/,, I Dato: ... J' • I, •• . .. . , ... . .: .. -. . . . . . ., u • Littleton/Englewood WWfP Fann Lease-Clint Burnet FIIIID.2016 • • • PageS ofS • Date August 1, 2016 COUNCIL COMMUNICATION Agenda Item 9bii Subject Farm Lease Renewal AQreements-2nd ReadinQ INITIATED BY STAFF SOURCE Littleton/Englewood Wastewater Treatment Plant Dennis W. Stowe, Plant Manager -Supervisory Committee Jim Tallent, Treatment Division Manager COUNCIL GOAL AND PREVIOUS COUNCIL ACTION In 2011, Council approved 5-year lease agreements, with local farmers, to manage farming operations on properties owned by the Cities of Englewood and Littleton. The goat for this action is to approve new leases for a five-year period. RECOMMENDED ACTION The recommended action is to approve a bill for an ordinance, on second reading, approving new 5-year farming lease agreements for: 1. Progressive Farms (C/o Mark Linnebur) 2. Craig Farms General Partnership (C/o Jerry Craig) 3. Clint A. Burnet 4. Kent Beichle 5. Gary and Nancy Meier and Jason Meier BACKGROUND, ANALYSIS, AND ALTERNATIVES IDENTIFIED Biosolids are nutrient-rich, organic materials produced during the treatment of domestic wastewater. These materials, when treated and processed properly, are environmentally safe and recycled as an organic soil amendment (or fertilizer) to improve farm soils and stimulate crop growth. Since 1982, the Littleton/Englewood Wastewater Treatment Plant (UE WWTP) has exclusively produced Class "8" biosolids which are used in an agricultural land application program (approximately 3,400 dry tons per year) for production of human consumable crops. This program was initiated in response to the increased cost and liability for landfill disposal of wastewater biosolids. In 1995/96, UE WWTP was granted approval by the Cities of Englewood and Littleton (Cities) to purchase approximately 6,600 acres of dryland farm property (Byers farm) to be used exclusively for the beneficial application of domestic wastewater biosolids generated by the facility. In 2007, an additional 1,270 acres was approved for purchase for biosolids application (added to the Byers farm). In addition, the Cities also own approximately 947 acres near Bennett, CO (Bennett farm), which is also actively farmed. Initial land purchases included farming agreements, with the previous owner, based on a 1/3 share of crop sale proceeds and 1/3 share of farming expenses (fertilizer, weed control, etc.) with UE WWTP. In 2006, 5-year (renewable annually to comply with TABOR) cash lease agreements were developed for $8.00/acre. With this arrangement, farming expenses are borne solely by the farmer and not shared with UE WWTP. This results in reduced budgetary expenditures, as well as a firm revenue source for UE WWTP. In 2016, cash-lease prices were reviewed to assess if current lease rates are commensurate with the farming industry. Research to find a Colorado database for private lease rates was inconclusive. However, the State of Colorado State Land Board (SLB) does maintain a program where dry cropland rental rates, for State Trust Land, are linked to commodity prices, crop yields and compared to private dry cropland rates. The most current SLB documentation indicates a cash rent rate of $12.26/acre in Arapahoe County (most of our biosolids-use land is in Arapahoe County). An adjustment to our cash-lease rate from $8.00/acre to $12.00/acre, for all lease arrangements, results in a 50% increase in the cash-lease rate to our farmers (to which they have agreed). By using SLB as a basis for lease evaluation, it brings our cash- lease arrangements in line with State of Colorado recommendations. The UE VVWTP Supervisory Committee approved this new cash-lease rate in October 2015. Following this approval, new cash-lease documents were prepared, reviewed and approved by the Englewood City Attorney and the Littleton City Attorney prior to farmer signature. FINANCIAL IMPACT With this recommendation, firm revenue of $90,300 will be generated each year, regardless of commodity/economy trends. LIST OF ATTACHMENTS Littleton/Englewood WWTP -Progressive Farms Lease Agreement Littleton/Englewood WWTP-Craig Farms General Partnership lease Agreement Littleton/Englewood WWTP -Clint A. Burnet Lease Agreement Littleton/Englewood WWTP -Kent Beichle lease Agreement Littleton/Englewood WWTP -Gary Meier lease Agreement Biosolids Use Restrictions Information Brochure • • Date July 18, 2016 COUNCIL COMMUNICATION Agenda Item 11ai Subject Farm Lease Renewal Aareements INITIATED BY STAFF SOURCE Littleton/Englewood Wastewater Treatment Plant -Supervisory Committee Dennis W. Stowe, Plant Manager Jim Tallent, Treatment Division Manager COUNCIL GOAL AND PREVIOUS COUNCIL ACTION In 2011, Council approved 5-year lease agreements, with local farmers, to manage farming operations on properties owned by the Cities of Englewood and Littleton. The goal for this action is to approve new leases for a five-year period. RECOMMENDED ACTION The recommended action is to approve, by Ordinance, new 5-year farming lease agreements for: 1. Progressive Farms (C/o Mark Linnebur) 2. Craig Farms General Partnership (C/o Jerry Craig) 3. Clint A Burnet 4. Kent Beichle 5. Gary and Nancy Meier and Jason Meier BACKGROUND, ANALYSIS, AND ALTERNATIVES IDENTIFIED Biosolids are nutrient-rich, organic materials produced during the treatment of domestic wastewater. These materials, when treated and processed properly, are environmentally safe and recycled as an organic soil amendment (or fertilizer) to improve farm soils and stimulate crop growth. Since 1982, the Littleton/Englewood Wastewater Treatment Plant (UE WWTP) has exclusively produced Class "B" biosolids which are used in an agricultural land application program (approximately 3,400 dry tons per year) for production of human consumable crops. This program was initiated in response to the increased cost and liability for landfill disposal of wastewater biosolids. In 1995/96, UE WWTP was granted approval by the Cities of Englewood and Littleton (Cities) to purchase approximately 6,600 acres of dryland farm property (Byers farm) to be used exclusively for the beneficial application of domestic wastewater biosolids generated by the facility. In 2007, an additional 1,270 acres was approved for purchase for biosolids application (added to the Byers farm). In addition , the Cities also own approximately 947 acres near Bennett, CO (Bennett farm), wh ich is also actively farmed. Initial land purchases included farming agreements, with the previous owner, based on a 1/3 share of crop sale proceeds and 1/3 share of farming expenses (fertilizer, weed control, etc.) with UE WWTP. In 2006, 5-year (renewable annually to comply with TABOR) cash lease agreements were developed for $8.00/acre. With this arrangement, farming expenses are borne solely by the farmer and not shared with UE WWTP. This results in reduced budgetary expenditures, as well as a firm revenue source for UE WWTP . In 2016, cash-lease prices were reviewed to assess if current lease rates are commensurate with the farming industry. Research to find a Colorado database for private lease rates was inconclusive. However, the State of Colorado State Land Board (SLB) does maintain a program where dry cropland rental rates, for State Trust Land, are linked to commodity prices, crop yields and compared to private dry cropland rates. The most current SLB documentation indicates a cash rent rate of $12.26/acre in Arapahoe County (most of our biosolids-use land is in Arapahoe County). An adjustment to our cash-lease rate from $8.00/acre to $12.00/acre, for all lease arrangements, results in a 50% increase in the cash-lease rate to our farmers (to which they have agreed). By using SLB as a basis for lease evaluation, it brings our cash- lease arrangements in line with State of Colorado recommendations. The UE WWTP Supervisory Committee approved this new cash-lease rate in October 2015. Following this approval, new cash-lease documents were prepared, reviewed and approved by the Englewood City Attorney and the Littleton City Attorney prior to farmer signature. FINANCIAL IMPACT With this recommendation, firm revenue of $90,300 will be generated each year, regardless of commodity/economy trends. LIST OF ATTACHMENTS Littleton/Englewood WWTP -Progressive Farms Lease Agreement Littleton/Englewood WWTP -Craig Farms General Partnership Lease Agreement Littleton/Englewood WWTP -Clint A. Burnet Lease Agreement Littleton/Englewood WWTP -Kent Beichle Lease Agreement Littleton/Englewood WWTP -Gary Meier Lease Agreement Biosolids Use Restrictions Information Brochure I. Restrictions for the Harvesting of Crops and Turf, Grazing of Animals, and Public Access on Sites W~ere Class "B" Biosolids Are Applied Restrictions for the harvesting of crops* and turf: 1. Food crops, feed crops, and fiber crops, whose edible parts do not touch the surface of the soil shall not be harvested until 30 days after biosolids application. 2. Food crops with harvested parts that touch the biosolids/soil mixture and are totally above ground shall not be harvested until 14 months after application ofbiosolids. 3. Food crops with harvested parts below the land surface where biosolids remain on the land surface for 4 months or longer prior to incorporation into the soil shall not be harvested until 20 months after biosolids application. 4. Food crops with harvested parts below the land surface where biosolids remain on the land surface for less than 4 months prior to incorporation shall not be harvested until 38 months after biosolids application. 5 . Turf grown on land where biosolids are applied shall not be harvested until I year after application of the biosolids when the harvested turf is placed on either land with a high potential for public exposw-e or a lawn, unless otherwise specified by the permitting authority. Restriction for the grazing of animals: 1. Animals shall not be grazed on land until 30 days after application of biosolids to the land. Restrictions for public contact: 1. Access to land with a high potential for public exposure, such as a park or ballfield, is restricted for 1 year after biosolids application. Examples of restricted access include posting with no trespassing signs, and fencing. 2. Access to land with a low potential for public exposw-e ( e.g., private farmland) is restricted for 30 days after biosolids application. An example of restricted access is remoteness. . • Examples of crops impacted by Class "B" •~ pathogen requirements are listed in Figw-e 2-5. Figure 2-5 Examples of Crops Impacted by Site Restrictions for Class B Biosolids Harvested Parts That: Usually Do Not Touch the Usually Touch the Are Grown Below the Soils/Biosolids Mixture Soils/Biosolids Mixture Soils/Biosolids Mixture (30 Dav Restriction) (14 month restriction) (20-38 month restriction) Peaches Melons Potatoes Apples Strawberries Yams Sweet potatoes Oranges Eggplant Grapefruit Squash Rutabaga Peanuts Com Tomatoes Onions Wheat Oats Cucumbers Barley Celery Leeks Radishes Cotton Cabbage Turnips Soybeans Lettuce Beets , ... ---.... Frequently Asked Questions and Infonnation About Biosolids For More Information If you have questions or concerns, or just want to provide comments, please contact us directly . Littleton/Englewood Wastewater Treatment Plant Phone: 303.762.2600 Emergencies : 303.435.4763 Office hours: 7:30 a.m. to 4:30 p.m. M-F Or visit us on the web: www.lewwtp.org STATE OF COLORADO BOARD OF LAND COMMISSIONERS AGENDA: April 4, 2013 X ACTION _INFORMATION _OLDBUSINESS _TABLEDFROM: TOPIC: ................................................ Dey Cropland Rates CO'UN'TY: ............................................. Statewide PROJECT MANAGER: ........................... Matt Pollart SUMMARY STATEMENT: State Land Board dry cropland rental rates are currently detennined using a fonnula approved by the Board in 2004. The 2004 fonnula provided no mechanism for lease rates to keep pace with private lease rates or adjust for commodity prices. Staff recommends that the fonnuia be linked to commodity prices and set State Land Board lease rates similar to comparable private dry cropland rates. BACKGROUND INFORMATION/REMARKS: The State Land Board manages 85,750 acres of dry cropland through 268 individual leases. These lands generate approximately $1.5 million in annual revenue. There are-233 leases set at our "standard rate" for dry cropland. These leases average $14.13 per acre. There are 35 leases that have higher rates as a result of competitive bidding processes. These leases have an average lease rate of $32.20 per acre. The average rental rate for all dry cropland leases in 2011 was $17.08 per acre. The State Land Board's standard dry cropland fonnula "converts" crop share agreements to a cash rent. Traditionally, rental agreements on privately-owned fannland are based on crop share agreements . In a crop share agreement, the landowner receives a share of the proceeds of the crop as rent, sharing risk and reward. The prevailing private practice for many years was to split the crop at 2/3 to the tenant and 1/3 to the landowner with the tenant bearing all production costs. More recently, as production costs have risen, private agreements have tended to require the landowner to contribute to 1/3 of the fertilizer and chemical costs as well. This led to some crop share agreements to split at 3/4 tenant and 1/4 landlord where tenant again bears all cost of production costs. The State Land Board's standard dry cropland fonnula converts crop share lease rates to cash rent as follows: Price of wheat($ 3.92 per bushel) x Yield (bushels per acre)= gross revenue per acre x 2s•1o = landowner share x 50% = based on the assumption that the land will remain fallow every other year = State Land Board rent per acre -1 - When applied appropriately, this fonnula accurately captures the revenue potential of the individual parcel of cropland. The following example applies the fonnula to a parcel of land in Weld County. , $3.92 per bu. (price) x 26.4S bu. (Weld County avg . yield)= $103.68 per acre (gross revenue) x 25% ( crop share to SLB) = $2S.92 per acre x SO% (assumes the land will remain fallow every other year) = $12.96 per acre Crop Rotation Some producers only fallow dry cropland one out of three years instead of the more traditional practice of fallowing the land every other year. If this were the prevailing practice on state trust land , the Board could justify a 66% adjustment as opposed to the proposed 50% adjustment. Staff consulted with CSU experts who estimated that as much 1/3 of dry cropland in the state is fanned under this system . However, the District Managers reported that a 3-year rotation is not the prevailing practice on state trust lands. Based on these findings, staff recommends that the dry cropland lease calculation continue to be based on the assumption that the land will remain fallow every other year. Staff will continue to monitor the use of a three year rotation and inform the Board if the formula should be adjusted in the future. Wheat Prices When the Board approved the dry cropland rates in 2004, they adopted a fixed value for the price of wheat ($3.92 per bushel}, rather than a variable price. At the time, $3 .92 per bushel was the "price guarantee" for the federal fann program. This meant that, even if the market price were lower, producers would receive $3.92 per bushel for their crop. However, the policy did not consider the prospect that the price of wheat would exceed that figure . As shown in the table below, the average price of wheat exceeded the $3.92 per bushel value every year YEAR 2012 2011 2010 2009 2008 2007 2006 2005 2004 Average price of Wheat (as reported by NASS)(CO) $7. 19 /bushel. $6.60/bushel $5.54/bushel $4.57/bushel $6.62/bushel $6.01/bushel $4.54/bushel $3.43/bushel $3 .25/bushel since 2004 and is at $7.19 per bushel. This fact led staff to recommend an update to the dry cropland policy. In January 2012, staff convened an industry panel to solicit input and discuss possible changes to dry cropland rates. The panel included representatives from the Colorado Wheat Growers Association, CSU Extension staff, Colorado Farm Bureau, USDA Statistics Service, an Agricultural lender, and SLB lessees. The general consensus of the group was that State Land Board rates were low. The group recommended that the current fonnula be retained using a I 0-year Olympic average for the price of wheat (I 0-year average, dropping the highest and lowest year). This serves to stabilize rents from year to year and account for volatility in the market due to drought, etc. The group also recommended using the actual farm yield when possible rather than county averages. This would allow the State Land Board to capture additional revenue from trust land that is of higher quality and has proven yields in excess of the county average. -2- ' Based on the panel's recommendation, the 10-year Olympic average price of wheat would be $5.08 per bushel or a 35% increase in the State Land Board's dry cropland lease rates. Staff also considered the use of a 5-year standard average price of wheat because this would capture most recent wheat price trends and yet still smooth out year-to-year price volatility. The 5-year average would by $6.10 per bushel or a 68% increase. Despite the larger increase, staff believes the 5-year average price is the most fair to both the producer and the State Land Board. National Agriculture Statistics Service Survey The USDA's National Agriculture Statistics Service {NASS) conducts an annual survey of private lease rates on dry cropland for the Farm Service Agency (FSA). These survey results are used to calculate rental rates that FSA pays farmers to enroll their land in the Conservation Reserve Program (CRP). The table below illustrates how the proposed State Land Board rates compare with the NASS survey on an indiv idual county basis . The average rate found by the NASS survey, while slightly higher, is within 6 % of the average rate achieved by the proposed formula. r.~•~~ ~~~"":~if--~ ""t1'~ -~· .•.~r,:-'.~·-· -!· -~ .,-.,~~-· ~~-' • ~$Y~ ~~•'· ~ar~: (f.r·,Cougty;j .~: . "!''•t•~: 11. '1fj· ') ~:·t~ ·'.th•:~ ·;t.J.•:' ., -{j· -~·;4®1-, ?' l !~ ~:.,J,,;,• I'&. •• ~., AdtWlS Araoahoe Baca Bent Cheyenne Douglas El Paso Elbert Kiowa Kit Carson Larimer Lincoln Logan Moffat Morgan Phillips Prowers Routt Sed2Wick Washimrton Weld Yuma Average Rate (per acre) Proposed State Land Board Dry Cropland Rate Compared to 2012 NASS Rental Rate Survey #8Cfo·Yt·+ ·,~ .',l.· -• • ~·· -~,ro bo'!i!e4'§f ,r .. ,._::.1.r;:".:r~1~:.__.. ~::. ~-.t .,. . ~.-~ «t8]1:j_ ~ f:,i ClirrenU=!-r.: ~ #~ f.,f~--t ~..;. . -.• r. . .. . , ._ 'j n:J '1-•• ;ir ..... °'f 'S,t: ~t-;'j;,:·f•~~. ·.:.?J t• r;~· ~ ... ..-...... , ..... ,;,, .. · jj~s• '. , · vera :a ~;~S,EB ·eascSr-·. ?a 'SI; <EeMe;r -~J'.l;~m~ag~~~ .~-•-:-,•~" -!t'r~,,-•("• --i~~g:"I• -.,;lffi"" f: -~ -,~ .. -"" I ":-In _; .v-•r~· ..... _.t, .r.c y·· l ~ -'~~-:Rat ~ ~ · Ra tel·, ~-. 01~ . •Ir• /,.;.~i .. ·. -~ . 'r:-J.1 ~ & . ~~,a~ •rt crease';t . ~ ···"' ·, ,,,..f.., :-,,·~-· j '"i-. ~ir<:aef-i ·" ':Jt · _.:~,. ~•-1.)'i.~~-' ( :~~"'-·~.:£..,;.":t,b:"'~ .. . ~", D'Us}i~Js)'z' . .; {i<oef ac(e )t: ,. _,. . 1;:-.a:cre . . , ~f .I'!>\, .... ~.: • .;.:7.'.~-~~ 28.30 -· $13.69 $22 .22 ·· 62 .31% 25 .80 $12.26 $20.26 65.25% 25.05 $10.85 $21.30 96.31% 25.75 $11.37 $20.22 77 .84% 26.85 $11.74 $21.08 79.56% 28.45 $14.04 $22 .34 59.12% 22.90 $11.06 $17 .98 62.57% 27.05 $13.16 $21.24 61.4% 29.45 $12 .10 $23 .12 91.07% 28 .00 $14.04 $21.98 56 .55% 27.30 $14.75 $21.44 45.36% 32.45 $14 .19 $25.48 79.56% 30.25 $13 .67 $23.75 73.74% 22.75 $11.39 $17 .86 56 .8% 30.40 $14.41 $23.87 65 .65% 34 .60 $15.66 $27.17 73.50% 26.55 $12.60 $20.85 65.48% 25 .20 $12.30 $19.79 60.89% 34 .95 $15 .75 $27.44 74 .22% 28 .10 $13 .67 $22.06 61 .38% 26.50 $12.96 $20.81 60.57% 32 .65 $16 .00 $25 .64 60 .25% NA $13.26 $22.18 NA ,..::: -~~~;::r~-e~-~~ ::2012',NASS':... Ji ., i., .J ••r_.. l'I'·~• -R~ntafRate:: .. ~~ ':\_;:tJ:.'}~·17.i•' ·~~.§up:~; l?i! .. .-~J• •· t~ ri· r.. ~..,1,.____.~ ... : ~- $18.00 - $22 .50 $25.00 $26 .50 $17.50 $14.00 $17.50 $17 .50 $21.00 $34.00 $24.50 $22.00 $20.00 $20.50 $22.50 $37.00 $28.00 $15.50 $29.00 $23.00 $26.50 $35 .50 $23 .52 CSU Extension Survey The CSU Extension publishes an annual report titled "Custom Rates on Colorado Farms and Ranches"(attached). This publication includes a report on cash rental rates for dry cropland. While this survey does not have the same level of detail as the NASS report, it appears to support the proposed State Land Board dry cropland rate structure. RECOMMENDATION: Staff recommends the Board adopt the following changes to the existing fonnula for setting dry crop land lease rates on state trust land : 1. Utilize actual farm yields (rather than county averages) when available from the lessee's crop insurance carrier. 2. Utilize the National Agricultural Statistics Service 5-year average wheat price. 3. Rates would be adjusted annually on July 1st The resulting fonnula will be as follows: Price of wheat (5 year average as reported by NASS) x Yield for the farm (bushels per acre)= gross revenue per acre x 25% = landowner share x 50% = based on the assumption that the land will be fallowed every other year = State Land Board rent per acre Due to the fact that some lease rates will increase by as much as 96%, staff recommends the Board implement the initial increase over a two-year period. -4 -