R2021-194 Resolution Authorizing Cash Rent Farm Lease with Craig Hill for Dewitt County Water Wellfield

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10/13/21,3:20 PM Item Coversheet '® Public Works DATE: 10/13/2021 MEMO: 2021-79 TO: Honorable Mayor Julie Moore Wolfe and City Council Members FROM: Scot Wrighton,City Manager Matt Newell,P.E.,Public Works Director Keith Alexander,Water Production Manager SUBJECT: Resolution Authorizing Cash Rent Farm Lease with Craig Hill for DeWitt County Water Wellfield SUMMARY RECOMMENDATION: It is recommended that the City Council authorize the Mayor to sign,and the City Clerk to attest,to the following resolutions: 1. Resolution Authorizing Cash Rent Farm Lease with Craig Hill for DeWitt County Water Wellfield at no cost to the City. 2. Resolution Authorizing Crop Share Lease with Steve Bell for Exterior of the Oakley Sediment Basin at no cost to the City. BACKGROUND: According to First Illinois Ag Group,the City's farm management consulting firm,farm leases like these are usually executed in the fall so that tenants have adequate time to plan for the next planting season,including fall farm ground preparations and conservation practices such as seeding winter cover crops. Therefore,even though the current leases do not end until February 28, 2022,it is recommended that the new leases be authorized now. DeWitt County Water Wellfield Farm Lease The City owned DeWitt County Water Wellfield has 106.21 tillable acres that have been farmed for several years by Mr.Hill. First Illinois Ag Group recommends that Mr.Hill be allowed to continue farming the wellfield since he is very knowledgeable of the unique characteristics of the property and has successfully farmed on it for many years. Since the quality of the soil at the wellfield is high,the leases have been on a cash rent basis,with a bonus rent based on actual crop production and average market price,to maximize City income. In 2020,the City's net farm income at this location was $26,611.09. Due to commodity price increases for corn and soybeans,First Illinois Ag Group also recommends that the base cash rent be increased$25 per tillable acre to$310 per tillable acre. This will provide the City with slightly more base cash rent income than last year. Due to the increased cost of crop production compared to last year,First Illinois Ag Group also recommends that the basis for the bonus rent payment for corn be adjusted to a breakeven profit point of$845 per acre and$620 per acre for soybeans. This may slightly decrease the amount of bonus rent income that the City may receive compared to last year. Both recommendations are included in the lease. Since the City is more proactively involved in Lake Decatur water quality improvements,the lease also includes the requirement that a winter cover crop(cereal rye)be planted to reduce soil erosion from this year's crop harvest through next year's crop planting. Exterior of the Oakley Sediment Basin Farm Lease The exterior of the City owned Oakley Sediment Basin,where dredged lake sediment was pumped into,has 30.93 tillable acres that have been farmed for several years by Mr.Bell. First Illinois Ag Group recommends that Mr.Hill be allowed to continue farming the wellfield since he is very knowledgeable of the unique characteristics of the property and has successfully farmed on it for many years. The terms of the lease are identical to the previous lease. hftps:Hdecatur.novusagenda.com/AgendaWeb/CoverSheet.aspx?ltemiD=3598 1/2