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DISCUSSION <br />The attached draft Grazing Lease incorporates the provisions specified in the purchase <br />agreement, including the lease rate based on the San Francisco Public Utilities <br />Commission (SFPUC) watershed rates. Grazing lease rates for areas owned by the <br />SFPUC are based on animal unit months (AUM) indexed with a blended average of <br />feeder cattle prices. For example, using the SFPUC rates, a sample rental calculation <br />fora 200 acre lease area was $4,226.25 for the period 11/1/05 - 10/3/06. <br />In the current situation, the amount of lease revenue to be generated for the City will be <br />less, because the South End Conservation Area is only 60 acres (a smaller AUM <br />capacity). In addition, based on the limitations of the Grazing Management Plan and <br />other interests of the environmental resource agencies, the City's goal for the South End <br />Conservation Area is not to maximize lease revenue, but rather habitat enhancement <br />and water quality protection. <br />The attached draft Grazing Lease has previously been provided to Mr. Koopman, who is <br />generally in agreement with the terms. As Mr. Koopman awaits final review by his <br />attorney, however, staff recommends that the City Council authorize the City Manager <br />to execute a Grazing Lease in generally the form provided, subject to modifications <br />which will not result in fiscal impacts to the City. <br />Sut~nitted by: <br />Ja es .Wolfe ~ <br />Dire r of Parks and <br />Community Services <br />Fiscal Review: <br />P. ~u ~~~~'~~ <br />avid C <br />Finance Director <br />Approved by: <br />Nelson Fialho <br />City Manager <br />Attachments: <br />1. Construction Contract <br />2. Draft Grazing Lease <br />Page 4 of 4 <br />