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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/16/2004 - FIRST READING OF ORDINANCE NO. 034, 2004, AUTHORIZ ITEM NUMBER: 16 AGENDA ITEM SUMMARY DATE: March 16, 2004 FORT COLLINS CITY COUNCIL STAFF: Mark Sears SUBJECT First Reading of Ordinance No.034,2004,Authorizing the Sublease to Larimer County of Portions of the Fossil Creek Reservoir Property Leased by the City from North Poudre Irrigation Company. RECOMMENDATION Staff and the Natural Resources Advisory Board recommend adoption of the Ordinance on First Reading. EXECUTIVE SUMMARY The Natural Areas Program holds a lease on 810 acres of land and surface water rights from North Poudre Irrigation Company for Fossil Creek Reservoir. This Ordinance approves a sublease of all or a portion of that leased property to Larimer County. The sublease will allow Larimer County Open Lands to lease, operate, maintain and manage a 150'strip(approximately 25 acres) along the south shore of the reservoir adjacent to Fossil Creek Reservoir Regional Open Space (FCRROS). FCRROS is jointly owned by the City and County, but it will be operated by Larimer County. Larimer County has completed the design of the public improvements for FCRROS, which will be constructed this spring/summer/fall and the site opened to the public late this year. BACKGROUND In January 2001, the City and County entered into an Intergovernmental Agreement ("IGA") with the County on the proposed FCRROS, which was later amended in April, 2003. The IGA calls for the County to lease the recreational rights for the Fossil Creek Reservoir from North Poudre Irrigation Company, and the expense was to be shared equally between the City and the County. Certain County Commissioners wished to have boating rights as a part of the lease and with North Poudre Irrigation not willing to allow boating on the reservoir, the County Commissioners did not approve the lease. At that point the City stepped in and proceeded with the lease to avoid losing the conservation of the 810 acres. The City has been paying the full amount of the lease since that time, which started out at $40,000 per year and is currently $44,000 per year. March 16, 2004 -2- Item No. 16 The County needs this sublease to be able to build,operate and maintain three wildlife observation areas at water's edge, and maintain the land along the south shore of the reservoir adjacent to the FCRROS. County Commissioners have indicated that they are willing to pay $2,500 per year for the sublease. Although the IGA states that the County would share equally in the cost of the reservoir lease, City staff and the NRAB are comfortable with the City subleasing the 150' strip(approximately 25 acres) for$2,500, since the County will be managing and maintaining the FCRROS. The NRAB considered this item at its February 4, 2004 meeting,and recommended adoption of the Ordinance. ORDINANCE NO. 034, 2004 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE SUBLEASE TO LARIMER COUNTY OF PORTIONS OF THE FOSSIL CREEK RESERVOIR PROPERTY LEASED BY THE CITY FROM NORTH POUDRE IRRIGATION COMPANY WHEREAS,pursuant to the terms of a Lease Agreement, dated October 21, 2001, the City leases from North Poudre Irrigation Company the surface rights to Fossil Creek Reservoir, and certain adjacent property (collectively the "Leased Property"); and WHEREAS, on January 16, 2001, the City Council adopted on second reading Ordinance No. 3, 2001, authorizing an intergovernmental agreement between the City and Larimer County related to the joint acquisition and ownership of seven properties in the Fossil Creek Reservoir area totaling 833 acres, for an estimated total purchase price of$7.7 million, along with certain other related action; and WHEREAS, in January 2001, the City and Larimer County also entered into an intergovernmental agreement concerning the Fossil Creek Reservoir Area Properties (the "IGA"), consistent with Ordinance No. 3, 2001; and WHEREAS,on April 1,2003,the City Council approved Resolution 2003-046,authorizing the amendment of the IGA to modify certain cost sharing provisions, and an amended and restated IGA, consistent with Resolution 2003-046, was finalized by the parties; and WHEREAS,the IGA provides that certain of the properties acquired by the City and County will be managed by Larimer County as part of the Fossil Creek Reservoir Regional Open Space;and WHEREAS,City staff has determined that it will be to the mutual advantage of the City and the County for the City to sublease to the County substantial portions of the Leased Property, for day-to-day operation and management by the County, in a manner consistent with the City's lease obligations, as part of the Fossil Creek Reservoir Regional Open Space; and WHEREAS, the County has agreed to pay$2,500 to the City in exchange for the proposed sublease; and WHEREAS, City staff has negotiated with the County a Sublease Agreement, a draft of which, dated February 13, 2004, is on file in the office of the City Clerk and available for public inspection (the "Lease Agreement"); and WHEREAS, the Board of North Poudre Irrigation Company reviewed the Sublease Agreement at its meeting of February 4,2004,and authorized the sublease pursuant to its terms;and WHEREAS, the sublease to the County of the Leased Property is beneficial in that it will generate revenue and provide for ongoing use and care of the Property, and is consistent with the general intent of the parties to the IGA,which contemplated that the County would lease the Leased Property directly; and WHEREAS,pursuant to Section 23-111 of the Code of the City of Fort Collins,the Council is authorized to lease any and all interests in real property owned in the name of the City for other than utility purposes, provided that Council first finds by ordinance that the lease is in the best interests of the City. NOW,THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the Council hereby finds that the sublease of a portion of the Leased Property at Fossil Creek Reservoir to the County as provided herein is in the best interests of Fort Collins. Section 2. That the City Manager is hereby authorized to execute a sublease agreement in substantially the same form of the Sublease Agreement described herein, together with such additional terms and conditions as the City Manager, in consultation with the City Attorney, determines to be necessary and appropriate to protect the interests of the City,not inconsistent with the terms of this Ordinance. Introduced, considered favorably on first reading, and ordered published this 16th day of March, A.D. 2004, and to be presented for final passage on the 6th day of April, A.D. 2004. Mayor ATTEST: City Clerk Passed and adopted on final reading this 6th day of April, A.D. 2004. Mayor ATTEST: City Clerk • Sears: There is a small pond there now, and the outlet is a culvert under that road. The beavers plugged up that culvert and raised elevation of the pond 8-10 ft. If we had not unplugged it, it would have washed out the road and the pond. The motion passed unanimously. IDP 'r Fossil Creek Reservoir Regional Open Space Mark Sears informed the board on the proposed Larmer County sublease and amendment to the current lease with North Poudre Irrigation Company, and asked the board for a recommendation to Council on the issue. • Staychock: The amendment to the lease and sublease are specifically for the 150 ft on the map? • Sears: The amendment allows us to sublease any or all of the lease, with the provision that the North Poudre Irrigation Company gets to approve the sublease. The original lease precluded that. We presented them with the sublease today at their board meeting and they approved that. From the Irrigation Company's standpoint, we are all approved, from the County standpoint, the only thing that has not been confirmed yet is what the compensation will be, and from our end, we are happy with all of the language seen in front of you. • Staychock: This Operations Plan is from the City? • Sears: Originally, yes. We presented that to North Poudre Irrigation Company to show them how we would manage the land that we are leasing from them. That's been amended to include the County's role as well as City's role in management. • Staychock: I got the impression that we were going to hand over services to Latimer County, but that's not right, the City will still have a role? What I got from Mark was that the sublease would allow Latimer County Open Lands to manage a portion of the reservoir. When I read this plan, it said the City will do this and that. We are not giving all maintenance over to Latimer County? • Sears: I haven't calculated what that 150 ft strip is in acres, but my guess is about 10-15 out of 810. They are not taking over much. It is mostly water so there is not much to manage. We are trying to restore that fringe of property about 50ft wide above the high water mark all the way around the reservoir. It has 8 miles of shoreline. We do enforcement. That is our biggest expense; we patrol it frequently. • Staychock: That is mentioned in here: about once a day. • Sears: That will help when the County is out there every day; we might not have to go out. • Fischer: Have we discussed compensation with Open Lands yet? • Sears: I've requested $5,000 per year. That is not based on a mathematical formula; I just thought it was a legitimate number. Our hopes would be that the County commissioners would make good on the IGA, in which they would jointly lease the reservoir with us and they would manage it. Someday they would split the $44,000 per year we are paying now. • Skutchan: Would they just bring it backup? • Sears: Legally, the County commissioners would have to take some kind of action to honor IGA that is already in place. We would have to amend the lease with North Poudre Irrigation to be co-held. • Fischer: Have we discussed that with the County at this time? • Sears: With K-Lynn, yes. I don't think she mentioned that to the other commissioners. • Skutchan: You expect them to sign off on this $5,000; is this a stepping stone towards that? • Sears: That's what K-Lynn and I thought. If we end up leasing the reservoir and managing until perpetuity, that is fine too. We have discussed and suggested to the County that we manage the Fossil Creek Open Space. They said no. We own the conservation easement on the north side of the reservoir, and we own the 25 acres on the southwest comer. It may just always make sense for us to manage the reservoir. It's more the principle of the fact that they didn't live up to the IGA. • Skutchan: What if they say no to the $5,000? • Sears: I'm OK with no compensation at all. In reality, it is less in our management cost and we are partners in the project anyways. • Donovan: They have a valid sublease. You need some consideration that is more than just a token. • Fischer: I feel $5,000 is a token; that it is worth more. I will support the $5,000 if we work out something where they pay part of the lease. • Sears: If you want to make that recommendation to Council, that is OK. That is what will go to Council. They may or may not approve it. • Donovan: The lease on the entire surface rights is $40,000 or$44,000 per year? • Sears: It started at $40,000 and goes up 4% per year for the next 5 years and then it is reevaluated. It is a 19-year lease altogether. • Donovan: So soon, it will be less than 10%? F, • Sears: Yes, lease says $5,000 but it goes up at 4% per year. �� Glenn Colton made the following motion: That we recommend approval of the Fossil Creek Reservoir sublease. The motion passed unanimously. Indian Creek Natural Area Project Mark Sears informed the board on the Indian Creek joint project with the County and asked the board for a recommendation to Council. • Donovan: I thought GOCO insisted that a land conservation entity be the holder of the conservation easement; that they didn't feel like public entities were a land conservation entity. They are OK with the City? • Sears: Yes, it was going to be the City of Loveland. • Skutchan: Where is Indian Creek? • Sears: (indicates on map) Indian Creek is what allows us to have a trail linked all the way from Devil's Backbone through Indian Creek, across Rim Rock, and into Horsetooth Mountain Park, which connects to Lory State Park. Their plan is to do the Management Plan this year, construct the trail next year and have that trail open in 2006. That also includes building an underpass under County Road 38E. Where that occurs, the road is already elevated. It won't be cheap, and they are going to try to GOCO grant that as well. • Fischer: When the County received the grant, did our portion decrease by that much? • Sears: No, it stayed at 75%. • Fischer: Isn't there a prohibition about owning and managing a conservation? • Sears: We won't have any title to the land • Stokes: The value of the easement is 75%. It completely eliminates development. This appeared to staff as a nice way to consolidate our partnership, and not have another party involved. That has created some problems in other areas with multi ownership. • Skutchan: What's the upside of Loveland being involved? • Sears: They have a feeling of ownership in that property. It would be nice if they could have real ownership because it serves Loveland residents more than Fort Collins. • Colton: Who is paying for the management • Sears: Indian Creek will be managed by the County. The trail construction and ongoing operation maintenance will be at County expense. The reason the County didn't put in more is, quite frankly, they were out of money. • Skutchan: Loveland's budget is next to nothing for acquisition of open space. r f moms Y\ —� FossilCreekNdural - -- Wedmds r� _