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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 12/07/2010 - SECOND READING OF ORDINANCE NO. 118, 2010, AUTHORI DATE: December 7, 2010 AGEN DA ITEM SUMMARY STAFF: Steve Comstock FORT COLLINSCOUNCIL Second Reading of Ordinance No. 118,2010,Authorizing the City to Enter into a Livestock Grazing Lease for Meadow Springs Ranch. EXECUTIVE SUMMARY This Ordinance, unanimously adopted on First Reading on November 16,2010 authorizes a grazing lease at Meadow Springs Ranch. The lease has been awarded to Natural Fort Grazing,who has held the lease since the City took over ownership in 1990. The proposed new lease is similar to the previous lease. It is for ten one-year terms and 1100 animal units over a six month period each year. The new lease rate will average$16 per animal unit,which represents an increase of$3 per unit. The total potential revenue generated will be $1.056 million. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. Copy of First Reading Agenda Item Summary- November 16, 2010 (w/o attachments) ATTACHMENT DATE: November 16, 2010 ' STAFF: Steve Comstock • • • First Reading of Ordinance No. 118, 2010, Authorizing the City to Enter into a Livestock Grazing Lease for Meadow Springs Ranch. EXECUTIVE SUMMARY r ---� V"\ /7 In August 2010, the City issued a request for proposals for a new-grazing lease at Meadow Springs Ranch. Of the eleven interested parties, two proposals west jreceivedJThe�Selection committee awarded the lease to Natural Fort Grazing Inc. based on a superior proposal—Natural�Fort-Grazing has held the lease since the City took over ownership in 1990. The proposed new lease is very similar to the previous lease. It is for ten one-year terms and 1100 animal units over a six month period each year. The new lease rate will average $16 per animal unit, which represents an increase of$3 per unit. This is an excellent rate compared to the area average of around $12.50 per unit. The total potential revenue generated will be $1.056 million. BACKGROUND / DISCUSSION The City Wastewater Utility purchased Meadow Spfing.Ranchtf6r its,biosolids/program in two allotments in 1990 and in 1993. The purchase price was about$100-dollars per acre to`taliqg)app\oximately$2.6 million dollars. The current acreage owned is 26,680 acres.The cattle grazing program has occurred each year since the City purchased Meadow Springs Ranch in 1990. Grazing rev'e`nu� lected`to date i japproximatt,, $1.7 million. FINANCIAL / ECONOMIC IMPACTS The lease represents a solid financial return that off sets both the cost of the City's biosolids program and the environmental programs at Meadow Springs Ranch. STAFF RECOMMENDATION �� �� /��\ (�� n // t( ` (LFirstl I � U Staff recommends adoption of the Ordinance onading. BOARD / COMMISSION RECOMMENDATION At its October 21, 2010 meeting, the Water Board vote unanimously to recommend approval of the 2010 Meadow Springs Ranch Grazing Lease. ATTACHMENTS 1. Location map D 2. Water Board minutes (draft)�Oc' tober 21, 2010 . ORDINANCE NO. 118, 2010 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE CITY OF FORT COLLINS TO ENTER INTO A LIVESTOCK GRAZING LEASE AGREEMENT FOR MEADOW SPRINGS RANCH WITH NATURAL FORT GRAZING, LTD. WHEREAS, in late 1990, the City purchased that certain real property commonly known as the Meadow Springs Ranch, which has been expanded in the years since by the acquisition of additional adjacent parcels(together referred to herein as the "Property")for use by the Wastewater Utility for its biosolids application program; and WHEREAS, since purchasing the Property, the City has leased it each year for livestock grazing purposes; and WHEREAS, in August 2010, City staff issued a request for proposals to lease the Property for livestock grazing purposes for ten (10) one-year terms, and in response, the City received two proposals which were reviewed, resulting in the proposal of Natural Fort Grazing, Ltd. ("NFG") being selected; and WHEREAS,City staff and NFG representatives have negotiated a Grazing Lease Agreement (the "Lease"), which Lease is on file in the office of the City Clerk; and WHEREAS, on October 21, 2010, the Water Board considered the proposed Lease of the Property, and voted unanimously to recommend that the City Council approve the Lease as proposed; and WHEREAS, Sections 23-111 and 23-114 of the City Code authorize the City Council to lease, for a definite term of more than two years, any and all interest in real property owned by the City which is part of a City utility system, provided the City Council first finds, by ordinance, that the lease is in the best interests of the City, that the lease will not materially impair the viability of the City's affected utility system as a whole, and that the lease will be for the benefit of the citizens of the City. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the lease of the Property pursuant to the terms of the Lease is in the best interests of the City, that the Lease will not materially impair the viability of the City's Wastewater Utility system as a whole, and that the Lease will be for the benefit of the citizens of the City. Section 2. That the City Manager is hereby authorized to execute such the Lease and such additional documents as are necessary to lease the Property to NFG or its successors or approved assigns on terms and conditions consistent with this Ordinance and substantially similar to those set forth in the Lease, together with such additional terms and conditions or subsequent amendments or corrections as the City Manager,in consultation with the City Attorney,determines are necessary or appropriate to protect the interests of the City, including, but not limited to, any necessary changes to the legal description of the leased area, as long as such changes do not materially increase the size or change the character of the leased area. Introduced and considered favorably on first reading and ordered published this 16th day of November,A.D. 2010,and to be presented for final passag n t e 7th day of December, D.2010. Mayor ATTEST: Chief Deputy City Clerk Passed and adopted on final reading this 7th day of December, A.D. 2010. Mayor ATTEST: City Clerk