Agenda Date: 12/01/2020
Subject:
Title
Ordinance 44-2020: An ordinance on second reading authorizing renewal of four farm lease agreements for South Platte Renew
Body
|
Prepared by: |
Lucy Lucero, Executive Assistant, City Manager’s Office |
PURPOSE:
Does city council support renewing four farm lease agreements for South Platte Renew?
PRESENTATIONS:
Staff Presenter(s): Keith Reester, Public Works and Utilities Director
Additional Presenter(s): Pieter Van Ry, South Platte Renew Director; Blair Corning,
Deputy Director - Environmental Programs
SUMMARY:
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 South Platte Renew (SPR) has produced Class “B” biosolids which are used in an agricultural land application program for production of human consumable crops. This program was initiated in response to the increased cost and liability for landfill disposal of wastewater biosolids.
The long-term relationship with each farmer is critical to SPR’s Beneficial Use Program, as it allows for successful land application of biosolids. This sustainable solution avoids additional expenses of landfilling the solids produced during the wastewater treatment process. Good farming practices and adherence to state and federal regulations by partner farmers is instrumental to the success of the biosolids program.
PRIOR ACTIONS OR DISCUSSIONS:
In 1995/1996, SPR was granted approval by the Cities of Englewood and Littleton to purchase approximately 6,600 acres of dryland farm properties (formerly known as the Byers Farm) for the beneficial application of domestic wastewater biosolids generated by the facility. In 2007, an additional 1,271 acres was purchased for biosolids application (added to the Byers Farm). In addition, the cities also own approximately 947 acres near Bennett, Colorado (formerly known as the Bennett Farm) which is also actively farmed.
There are currently five lease agreements between the Cities of Littleton and Englewood and four different farmers. These were written for the five-year period from January 1, 2016 and will expire December 31, 2020. The existing Lessees are Progressive Farms, Craig Farms General Partnership, Gary and Nancy Meier and Jason Meier, and Kent Beichle. Kent Beichle is the Lessee for two lease agreements, as the second lease was transferred from another farmer in 2018.
This ordinance passed on first reading on November 17, 2020.
ANALYSIS:
Staff Analysis
The amendments to the lease agreements include 1) increasing the cash rent per updated calculations and benchmarking; 2) consolidating the two Beichle leases into a single lease; 3) adding language to improve communications with farmers; 4) allowing a temporary extension for farmers to harvest crops in the event that the agreement ends; and 5) allowing for an appraisal to inform rent increases after each term.
Council Goal, Objective, and/or Guiding Principle
Council Goal 3 - Good Governance, Objective 3 - Strategic Partnerships
Fiscal Impacts
The previous cash rent for the properties was set at $12.00/acre based on data from the Colorado State Land Board’s equation for standard rates in Adams and Arapahoe Counties. This amount has been increased to account for inflation and current agricultural market conditions.
The cash rent has been increased to $16.00/acre for the three leases receiving biosolids application. The rate of $16.00/acre was derived from the average of 2019 data from the Colorado State Land Board and National Agricultural Statistics Service (NASS). The Meier lease includes 478 acres at $8.00/acre for grazing.
Kent Beichle’s cash rent was increased to $14.00/acre because land application is not performed on this land due to odor concerns from nearby residents in Bennett. Additionally, the soil quality is poorer than the other owned properties.
Summary of Lease Rate Information and Revenue Projections:
|
Farmer |
Rate ($/acre) |
Acres |
Revenue ($) |
|
Progressive Farms |
16 |
4,993 |
79,888 |
|
Craig Farms |
16 |
320 |
5,120 |
|
Meier |
16 land application / 8 grazing |
1,271 |
16,506 |
|
Beichle |
14 |
947 |
13,258 |
The annual revenue from 2016 to 2020 was $88,455.20. The expected annual revenue from 2021 to 2025 is $114,771.60 which is an increase of twenty-three percent.
Alternatives
Do not renew the leases and respond to the increased cost and liability for landfill disposal of wastewater biosolids.
STAFF RECOMMENDATION:
Staff recommends the approval of the four lease agreements between the Cities of Littleton and Englewood, Progressive Farms, Craig Farms General Partnership, Gary and Nancy Meier and Jason Meier, and Kent Beichle at the proposed lease rates.
PROPOSED MOTION:
Proposed Motion
I move to approve the ordinance on second reading authorizing renewal of four farm lease agreements for South Platte Renew.