MEMORANDUM

TO: Pete Sprague, Assembly President

Kenai Peninsula Borough Assembly Members

THRU: Dale L. Bagley, Mayor

THRU: Max J. Best, Planning Director

Paul Ostrander, Land Management Officer

FROM: Roy E. Dudley, Land Management Agent

DATE: May 8, 2003

SUBJECT: Ordinance 2003-20, An Ordinance Authorizing the Market Value Lease of Agricultural Land by Sealed Bid

The Kenai Peninsula Borough (KPB) has received a final decision from the State of Alaska for 400 acres of land located at Mile Post 15, Kalifornsky Beach Road. This 400 acres was classified agricultural and preservation by Resolution 2003-014. The preservation portion will be delineated by a Natural Resource Conservation Service (NRCS) wetland determination. It is estimated that approximately 160 acres will be suitable for crop production.

The subject ordinance authorizes an agricultural lease of the 400 acres by sealed bid. The KPB will offer the right to enter into the agricultural lease to the high bidder. The lease terms are fixed by the subject ordinance and cannot be negotiated.

The pertinent terms of the lease are:

� The lessee is required to submit to NRCS a Request for Certified Wetland Determination/Delineation (Form NRCS-CPA-38) at time of signing the lease.

� The initial term of the lease is 20 years.

� The lease provides one renewal option of 10 years.

� The minimum rental rate for the first five years shall be the fair market rental value as determined by a qualified appraiser. The rental rate will be adjusted every five years to the current market value. The rental rate is based on the market value of the portion of the lease that is not designated wetland by NRCS.

� The lessee is only authorized to grow crops.

� The lessee is required to submit a farm management plan approved by the NRCS prior to growing crops.

� Ground may not be tilled for crop production within 50 feet of subdivided lands on the northern and western boundaries of lease area.

The bid opening will be June 30, 2003. The sealed bid will be advertised four times in the 30 days prior to the bid opening in the Peninsula Clarion, Seward Phoenix Log, and Homer News.