Actions pertaining to the lease of city-owned agricultural land at the Fresno-Clovis Regional Wastewater Reclamation Facility (Bid File #9704) (District 3) 1. Adopt a finding of Categorical Exemption per staff determination pursuant to Sections 15301/Class 1 and 15304/Class 4 of the California Environmental Quality Act (CEQA) Guidelines 2. Approve a Lease Agreement between the City of Fresno and James F. Cook in the amount of $80,227.05 annually for lease of approximately 305.88 acres of City-owned agricultural land at the Fresno-Clovis Regional Wastewater Reclamation Facility (RWRF) for an initial term of four years, plus two optional one-year extensions totaling $481,362 in rent

REPORT TO THE CITY COUNCIL FROM: BRIAN BARR, Director General Services Department PAUL AMICO, PE, Director Department of Public Utilities SUBJECT ..Title Actions pertaining to the lease of city-owned agricultural land at the Fresno-Clovis Regional Wastewater Reclamation Facility (Bid File #9704) (District 3) Adopt a finding of Categorical Exemption per staff determination pursuant to Sections 15301/Class 1 and 15304/Class 4 of the California Environmental Quality Act (CEQA) Guidelines Approve a Lease Agreement between the City of Fresno and James F. Cook in the amount of $80,227.05 annually for lease of approximately 305.88 acres of City-owned agricultural land at the Fresno-Clovis Regional Wastewater Reclamation Facility (RWRF) for an initial term of four years, plus two optional one-year extensions totaling $481,362 in rent ..Body RECOMMENDATION Staff recommends Council approve actions pertaining to the lease of city-owned agricultural land at the Fresno-Clovis Regional Wastewater Reclamation Facility (Bid File #9704) (District 3): 1.) Adopt a finding of Categorical Exemption per staff determination pursuant to Sections 15301/Class 1 and 15304/Class 4 of the California Environmental Quality Act (CEQA) Guidelines; 2.) Approve a Lease Agreement between the City of Fresno and James F. Cook in the amount of $80,227.05 annually for lease of approximately 305.88 acres of City-owned agricultural land at the RWRF for an initial term of four years plus two optional one-year extensions totaling $481,362 in rent, and authorize the City Manager, or designee, to execute the Lease Agreement and subsequent extensions on the City’s behalf. EXECUTIVE SUMMARY The General Services Department (GSD) and Department of Public Utilities completed a competitive proposal process for leasing approximately 305.88 acres, over various parcels, at the RWRF. These acres are spread over APN 327-050-02T, APN 327-021-04T (portion of), APN 327-021-45T (portion of) and APN 327-021-5T (portion of). Two proposals were received and an Evaluation Committee selected James F. Cook as the best value proposer with the highest proposal amount. The Lease Agreement provides for an initial term of four years, with an option of two additional one-year extensions. Approval of the Lease Agreement will result in lease revenues to the Sewer Enterprise Fund of $320,908, or up to $481,362 if the two optional one-year extensions are exercised. Pursuant to Waste Discharge Requirements by the California Regional Water Quality Control Board, undisinfected secondary-treated (effluent) wastewater is permitted for irrigation of agricultural land to reduce the amount of effluent sent to irrigation ponds. As a result, the agricultural land is restricted to the farming of crops not for human consumption such as cotton or crops used for animal feed. BACKGROUND The Department of Public Utilities (DPU) operates the RWRF which is regulated under Waste Discharge Requirements (WDR) Order R5-2018-0080 issued by the California Regional Water Quality Control Board (CRWQCB). The facility’s primary means of disposing undisinfected secondary-treated effluent is to percolate on 1,720 acres of disposal ponds. In addition to the onsite disposal ponds, DPU is permitted to convey undisinfected secondary effluent as recycled water to farmers, reducing the amount of effluent sent to disposal ponds. Since the early 2000’s, DPU has leased several tracts of agricultural land to farmers within the boundaries of the RWRF for this purpose. This lease includes approximately 157.79 acres of land for this purpose (APN 327-050-02T). Recycled water at the undisinfected secondary treatment level is restricted to the irrigation of crops not for human consumption, such as cotton, or crops used for animal feed, such as alfalfa, Sudan grass, forage, winter wheat, silage corn and other fibrous crops. Until December 31, 2003, the DPU received and processed winery stillage, pursuant to a regulatory permit granted by the CRWQCB and disposed of the processed stillage on approximately 148.09 acres of property located at 5607 Jensen Avenue, Fresno, CA 93706 (APN 327-021-04T, 327-021-45T, 327-021-05T (portion of), which was acquired for that purpose (Winery Stillage Beds). The CRWQCB has since required the City to remove excess nutrient on the Winery Stillage Beds left by the disposal of winery stillage by planting and harvesting crops. To remove the excess nutrients in the soil, the Winery Stillage Beds shall be used exclusively for cultivating and harvesting Sudan Grass, Sorghum or Sudan-Sorghum hybrid, Silage corn, forage, hay, and/or similar crops for non-human consumption. A Request for Proposals was advertised on March 13, 2026, in The Business Journal and PlanetBids seeking farmers to cultivate and harvest crops, not for human consumption, on approximately 305.88 acres. Two farmers submitted lease proposals. James F. Cook was determined to provide the best value for the City of Fresno with an annual rent payment of $80,227.05 for a total of approximately 305.88 acres (all parcels). The Lease Agreement has been reviewed by the City Attorney’s Office and has been approved as to form. ENVIRONMENTAL FINDING Staff has performed a preliminary environmental assessment of this project and has determined that it falls within the Categorical Exemption set forth in section 15301/Class 1 and Section 15304/Class 4. Under Section 15301/Class 1, the proposed project is exempt from CEQA requirements when the project consists of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use. The key consideration is whether the project involves negligible or no expansion of use. Section 15301/Class 1 applies because the proposed project includes the lease and continued historical use of existing properties for agricultural purposes. The project does not involve new construction, ground disturbance, or increased capacity beyond existing facilities and previous use. Accordingly, the project will not have a significant impact on the environment. Under Section 15304/Class 4, the proposed project is exempt from CEQA requirements when the project consists of minor alterations in the condition of land, water, and/or vegetation which do not involve the removal of healthy, mature, scenic trees except for forestry or agricultural purposes. Section 15304/Class 4 applies because the proposed project limits the use to its continued historical use of agriculture, including cultivation and harvesting of non-human consumption crops, and expressly prohibits the construction of improvements as well as the alteration, improvement, or removal of trees upon the leased premises, minimizing possible alterations, except for agricultural purposes. None of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines, Section 15300.2, apply to the project. LOCAL PREFERENCE Local preference was not implemented because this is not an award of product, services, or construction contract. FISCAL IMPACT The Lease Agreement will result in lease revenues to the Sewer Enterprise Fund of $320,908, or up to $481,362 if the two optional one-year extensions are exercised. Attachments: Categorical Exemption Acceptance Letter Evaluation Lease Agreement Proposal Solicitation