The URL can be used to link to this page

Home My WebLink AboutAgenda Report - March 18, 1998 (75)0 CITY OF LODI COUNCIL COMMUNICATION m. AGENDA TITLE: Award of White Slough Water Pollution Control Facility Agricultural Leases MEETING DATE: March 18, 1998 PREPARED BY: Public Works Director RECOMMENDED ACTION: That the City Council adopt the attached resolution awarding three leases (January 1, 1999 through December 31, 2003) for agricultural land at the City's White Slough Water Pollution Control Facility (WSWPCF) and direct the City Manager and the City Clerk to execute the lease agreements on behalf of the City. BACKGROUND INFORMATION: The City has three agricultural lease parcels at WSWPCF (see Exhibit A). All the leases expire on December 31, 1998. At the January 7, 1998 meeting, the Council authorized the City Clerk to invite proposals for 5 -year leases of the parcels. The City received bids from four bidders. The bidders and lease amounts for Parcels 1 and 3 are: ANNUAL 5 -YEAR LESSEE ACREAGE $ACREIYEAR REVENUE REVENUE Parcel 1 Bechthold-Kirsche n man Farms 3891 $181.00 $70,409 $352,340 John Viera 389 $100.00 $38,900 $194,500 Parcel 3 Lima Ranch 218 $226.00 $49,268 $246,340 John Viera 218 $100.00 $21,800 $109,000 The rent received for Parcel 1 is less than the other parcels due to the quality of soils in the area, periodic flooding of some portions, and high groundwater levels. Three bids were received for Parcel 2. The bid documents requested two bid levels. One bid is prior to pending irrigation improvements. The second is after planned irrigation pipeline improvements are complete (about 11/: to 2 years). These improvements would have been completed, but were put on hold 'A recent review of acreage shows this amount may be off approximately 30 acres, Parcel 1 is being surveyed, and the high bidder has stated he will accept an adjustment of the lease amount pending its results. APPROVED: H. Dixan Flynn -- City G:IW W WIWHITESLO1CcAgLeas.doc 3/9198 Award of White Slough Water Pollution Control Facility Agricultural Leases March 18, 1998 Page 2 pending California Youth Soccer Association lease negotiations, which have significantly reduced revenues for this parcel. The bidders and lease amounts for each bid alternative are: Parcel 2 Prior to Improvements 1999 - 2000 ANNUAL 2 -YEAR LESSEE ACREAGE $ACRE/YEAR REVENUE REVENUE Bechthold- Kirschenman Farms 270 $171.00 $46,170 $ 92,340 Kaehler Dairy Farms 270 $150.00 $40,500 $ 81,000 John Viera 270 $100.00 $27,000 $ 54,000 Following improvements 2001 - 2003 ANNUAL 3 -YEAR LESSEE ACREAGE $ACRE/YEAR REVENUE REVENUE Bechthold- Kirschenman Farms 270 $226.00 $61,020 $183,000 Kaehler Dairy Farms 270 $150.00 $40,500 $121,500 John Viera 270 $100.00 $27,000 $ 81,000 Parcel 2's present irrigation system will not enable the farmer to apply effluent/biosolids/cannery waste to the entire parcel without significant improvements. Until these improvements are implemented, the tenant must pump ground or Delta water. Thus, the bids are lower. The estimated cost of the irrigation improvements is approximately $175,000 - 250,000. Note that the leases do not start until January 1, 1999. The Parcels 1 and 3 leases include a 6 -month cancellation clause. Parcel 2's lease includes this clause plus a provision that prior to January 1, 1999, the lease can be canceled without advance notice. This allows the high bidders, who are current tenants, to begin planning their operations now. Staff recommends that the leases be awarded to the high bidders as follow: GAVV WMW HITESLOkCcAgLeas.doo Award of White Slough Water Pollution Control Facility Agricultural Leases March 18, 1998 Page 3 Bechthold-Kirschenman Farms 389 -acre leasee Lima Ranch 218 -acre lease Bechthold-Kirschenman Farms 270 -acre lease These leases, along with the existing 5 -acre Northern California Power Agency and the 12 -acre San Joaquin County Mosquito and Vector Control District leases, will generate over $968,000 during the 5 -year term of these leases. In addition, Public Works staff is working with Electric Utility staff on the location of a new substation on the WSWPCF property. FUNDING: Not applicable. Richard C. Prima, Jr. Public Works Director Prepared by Fran E. Forkas, Water/Wastewater Superintendent RCP/FEF/DK/dsg Attachments cc: City Attorney Purchasing Officer Assistant Wastewater Treatment Superintendent Bechthold-Kirschenman Farms Lima Ranch ZA recent review of acreage shows this amount may be off approximately 30 -acres. Parcel 1 is being surveyed, and the high bidder has stated he will accept an adjustment of the lease amount pending its results. GAVV W W\W HITESLOtCcAgLeas.doc CITY CSF LODI PUBLIC WORKS DEPARTMENT EXHIBIT A WHITE SLOUGH WATER POLLUTION CONTROL FACILITY LAND LEASES 5 I , s 3 ...:::: 060 :. .. M m Jt r J, i I S I NOT TO SCALE LEGEND O389 -acre parcel leased by Bechthold-Kirschenman Farms O270 -acre parcel leased by Bechthold-Kirschenman Farms O218 -acre parcel leased by Lima Ranch O5 -acre parcel leased by Northern California Power Agency 12 -acre parcel to be leased by San Joaquin County Mosquito & Vector Control District RESOLUTION NO. 98-43 A RESOLUTION OF THE LODI CITY COUNCIL AWARDING THE WHITE SLOUGH WATER POLLUTION CONTROL FACILITY AGRICULTURAL LEASES WHEREAS, the City of Lodi has three parcels located at the White Slough Water Pollution Control Facility that are leased for agricultural purposes; and WHEREAS, on January 7, 1998 the City Council authorized the City Clerk to invite proposals for 5 -year leases on the three parcels; and WHEREAS, the proposals received are listed as follows: ANNUAL 5 -YEAR LESSEE ACREAGE $ACRE/YEAR REVENUE REVENUE Parcel 3 Lima Ranch 218 $226.00 $49,268 $246,340 John Viera 218 $100.00 $21,800 $109,000 Note: Parcel 3 lease includes a six-month cancellation clause. ANNUAL 5 -YEAR LESSEE ACREAGE $ACRE/YEAR REVENUE REVENUE Parcel 1 Bechthold-Kirschenman Farms 389 $181.00 $70,409 $352,340 John Viera 389 $100.00 $38,900 $194,500 Note: Rent received for Parcel 1 is less than the other parcels due to the quality of soils in the area, periodic flooding of some portions, and high groundwater levels. Parcel 1 lease includes a six-month cancellation clause. ANNUAL 2 -YEAR LESSEE ACREAGE $ACRE/YEAR REVENUE REVENUE _Parcel 2 Prior to irrigation improvements 1999 — 2000 Bechthold-Kirschenman Farms 270 $171.00 $46,170 $ 92,340 Kaehler Dairy Farms 270 $150.00 $40,500 $ 81,000 John Viera 270 $100.00 $27,000 $ 54,000 Note: Parcel 2 lease includes a six-month cancellation clause plus a provision that prior to January 1, 1999, the lease can be canceled without advance notice. ANNUAL 3 -YEAR LESSEE ACREAGE $ACRE/YEAR REVENUE REVENUE Parcel 2 Following Irrigation Improvements 2001-2003 Bechthold-Kirschenman Farms 270 $226.00 $61,020 $183,000 Kaehler Dairy Farms 270 $150.00 $40,500 $121,500 John Viera 270 $100.00 $27,000 $ 81,000 Note: Parcel 2 lease includes a six-month cancellation. ANNUAL 5 -YEAR LESSEE ACREAGE $ACRE/YEAR REVENUE REVENUE Parcel 3 Lima Ranch 218 $226.00 $49,268 $246,340 John Viera 218 $100.00 $21,800 $109,000 Note: Parcel 3 lease includes a six-month cancellation clause. NOW, THEREFORE, BE IT RESOLVED, that the Lodi City Council does hereby award the agricultural land leases at the White Slough Water Pollution Control Facility as shown below, effective January 1, 1999 and terminating December 31, 2003: Parcel 1 Bechthold-Kirschenman Farms 389 -acre lease' Parcel 2 Sechthold-Kirschenman Farms 270 -acre lease Parcel 3 Lima Ranch 218 -acre lease 'A recent review of acreage shows this amount may be off approximately 30 acres. Parcel 1 is be surveyed and the high bidder has stated he will accept an adjustment of the lease amount pending the results. Dated: March 18, 1998 ------------------------------------------------------------------ ------------------------------------------------------------------ I hereby certify that Resolution No. 98-43 was passed and adopted by the City Council of the City of Lodi in a regular meeting held March 18, 1998, by the following vote: AYES: COUNCIL MEMBERS - Johnson, Land, Mann, Pennino and Sieglock (Mayor) NOES: COUNCIL MEMBERS - None ABSENT: COUNCIL MEMBERS - None ABSTAIN: COUNCIL MEMBERS - None 7h - E�� ALICE M. R IMCHE City Clerk 98-43