R2024-11 Resolution Authorizing Cash Rent Farm Lease with Craig Hill for Two DeWitt County Farms

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1/8/24, 11:39 AM Item Coversheet Public Works DATE: 1/8/2024 MEMO: 2024-01 TO: Honorable Mayor Julie Moore Wolfe and City Council Members FROM: Scott Wrighton, City Manager Matt Newell,P.E.,Public Works Director Keith Alexander,Water Production Manager Jennifer Gunter,Watershed and Lake Manager SUBJECT: Resolution Authorizing Cash Rent Farm Lease with Craig Hill for Two DeWitt County Farms SUMMARY RECOMMENDATION: It is recommended that the City Council authorize the Mayor to sign, and the City Clerk to attest,to the Resolution Authorizing a Cash Rent Farm Lease with Craig Hill for Two DeWitt County Farms at no cost to the City. BACKGROUND: The City owns DeWitt County Wellfield(Farm#1)with 120 acres that have been farmed for several years by Mr. Hill. The City also purchased a second DeWitt County Farm(Farm#4)in late 2023 with 82.91 acres. First Illinois Ag Group(the City's farm management consulting firm)recommends that Mr. Hill be allowed to farm both properties since he has successfully farmed the wellfield for many years including the City's requirement that a winter cover crop be planted to reduce soil erosion from fall crop harvest through spring crop planting. A winter cover crop will also be required for the new farm. Since the soil quality of both farms is high,the leases are on a cash rent basis,with a bonus rent based on actual crop production and average market price,to maximize City income. Due to recent commodity price increases for corn and soybeans,First Illinois Ag Group also recommends that the base cash rent be increased$15 per tillable acre to$340 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$965 per acre for corn and$700 per acre for soybeans. This may slightly decrease the amount of bonus rent income that the City may receive compared to last year. All of these recommendations are common in cash rent farm leases in our region. In 2023,the City's new revenue from Farm 1 was$35,236.92. LEGAL REVIEW: The lease was provided to the Legal Department for review on December 29,2023. PRIOR COUNCIL ACTION: On January 17,2023 the City Council authorized a similar Cash Rent Farm Lease with Craig Hill for the DeWitt County Wellfield (Farm#1). POTENTIAL OBJECTIONS: None Foreseen STAFF REFERENCE: Matt Newell,Public Works Director,424-2747. Keith Alexander,Water Production Manager,424-2863. Matt will be present at the Council meeting. BUDGET/TIME IMPLICATIONS: There are no implications. ATTACHMENTS: Description Type https://decatur.novusagenda.com/agendaweb/CoverSheet.aspx?ltemlD=4770 1/2