HomeMy WebLinkAbout20150859.tiff .et*" City of Thornton
Annual Farm Management Operations Report
Prepared for the
Weld County Board of County Commissioners
December 16, 2014
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Executive Summary
• Thornton acquired farm land and water rights in Weld County in 1985 and 1986
as part of a water supply project.
• Since 1986, Thornton has contributed over $11.8 million to the local Weld County
economy through its Farm Management operations, including Voluntary
Payments in Lieu of Taxes to Weld County agencies, and the use of local
vendors on Thornton's Weld County projects and operations.
• Thornton owns 104 farms on approximately 17,750 acres in Weld County.
• Thornton currently owns 72 farm houses in Weld County. Thornton is in the
process of selling its farm houses. To date, seven houses have been sold (two in
2013; five in 2014).
• Thornton's Farm House Repair Program has, to date, addressed repair needs on
houses at a cost of $882,000. Thornton uses local contractors and vendors for
this Program.
• In 2014, there were 6,941 acres included in Thornton's Revegetation Program in
Weld County. To date, 5,733 acres have been approved as established native
grasslands by the Natural Resources Conservation Service. Thornton's 2014
Revegetation Program successfully maintained these native grasses with weed
management and mowing.
• The remaining Thornton-owned acres in Weld County are still associated with
irrigated agriculture and are leased to local farmers, or include house lots, roads,
ditches and other land uses.
• 2014 provided an opportunity for Thornton to participate in several oil and gas
leases and drilling activities throughout the area.
Page 2 of 9
Introduction
In 1985 and 1986, Thornton purchased over 20,000 acres of farms and associated
water rights in Weld and Larimer Counties. Thornton purchased the assets for a water
supply project. Since Thornton's acquisitions of farms and water, Thornton has
operated under a good neighbor policy of working with farmers, residents, businesses,
and governmental entities to effectively manage its properties and provide benefits to
the Larimer and Weld County communities. This annual report, which first began in
2007, provides a summary of Thornton's 2014 operations and activities in Weld County.
Since 1986, Thornton has operated a local Farm Management Office in Ault. The
function of the Farm Management Office is to oversee the operation, leasing,
management, and maintenance of Thornton's properties in Larimer and Weld Counties.
Thornton cash-leases many of its farms to local farmers, and several farmers who
originally sold farms to Thornton continue to lease farms from the City. Other Thornton
farms have been removed from irrigated agriculture, and Thornton has converted, or is
in the process of converting, these farms to native grass vegetation. This conversion of
farms from irrigated agriculture to a non-irrigated use is required by the Water Court
Decree, and must be satisfactorily accomplished before Thornton can deliver water to
Thornton customers.
The Thornton Farm Management Office pro-actively manages Thornton's properties
and tenants, and responds to issues and concerns when they arise. Since 1986,
Thornton has spent over $11 .8 million on its Farm Management operations, which
includes activities ranging from tree trimming, to plumbing and electrical repairs, to
culvert replacements. In addition, since 1987, Thornton has made voluntary payments
in lieu of taxes to Weld County. Up until 2010, these annual payments were in the
amount of $137,877. In 2010, Thornton increased its voluntary payments to Weld
County to adjust for changes in property values and the local tax schedule. The 2014
voluntary payment to Weld County taxing authorities was $228,430.
Over the years, Thornton has partnered with local governmental entities and businesses
to enhance their operations. For example, Thornton sold land and the associated
mineral rights to the Weld County RE-9 School District for expansion of the school
campus in Ault and construction of a new station for the Ault/Pierce Fire District. The
City has also worked with local agricultural producers to acquire land to improve their
operations. Fagerberg Produce expanded their onion processing facility onto land
acquired from Thornton and Longs Peak Dairy has acquired three Thornton farms to
improve their operation.
Since 2003, Thornton has leased approximately 57,846 acre feet of water to the Central
Colorado Water Conservancy District (Groundwater Management Sub-district and Well
Augmentation Sub-district) for operation of an augmentation plan for irrigation wells in
Weld County.
age 3of9
Thornton looks forward to its continued contribution to and cooperation with the Weld
County community.
Thornton's 2014 Farm Management Operations
Reveqetation Project
Thornton currently owns 104 farms on approximately 17,750 acres in Weld County. To
date, a total of 6,941 acres in Weld County have been taken out of irrigated agriculture
and have been or are in the process of being revegetated to native grasses. Through
2014, 5,733 acres in Weld County have been approved as revegetated by the Natural
Resources Conservation Service (NRCS). Thornton implements its revegetation
program with contractors and vendors that are selected through a bid process that is
advertised locally. Since 2006, all revegetation contractors and vendors have been
from the local community in Weld County. Since 2006, Thornton has spent well over
$1 .5 million with these local vendors on its revegetation project. Attached is a current
map of all of the Thornton properties located in Weld Counties.
There is currently one grazing lease in place on the City's revegetated farms in Weld
County. This tenant works with Thornton to manage his cattle appropriately to maintain
the health of the pasture grass on the farm. Thornton does not allow horse grazing on
its properties, as in the past this activity led to erosion problems.
The pasture grass on the other farms that have been revegetated is cut and baled by
Thornton vendors when adequate, natural moisture has been available to produce a
harvestable stand of grass. This procedure maintains the health of the pasture grass,
and avoids potential damage from overgrazing. Adequate moisture in 2014 allowed for
grass production on some Thornton land. Just over 1 ,000 bales were sold to local area
cattle producers. Other farms that did not receive adequate moisture were monitored to
control weeds and pests. Below are some pictures of the bales that were sold in 2014
and certified grass fields.
Page G of9
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Farm #31 located east of Pierce, CO. on WCR 90
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Farm #38 located North East of Pierce , CO. on WCR 88 .
Page 5 of 9
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Farm #78-8 located North East of Pierce, CO. , on WCR 94
Thornton's current plans are to complete revegetation and obtain NRCS approval on a
total of 6,941 acres in Weld County by 2020 . The remainder of the farms in Weld
County will stay in irrigated agriculture until the water is needed for municipal use in
Thornton . It is currently estimated that additional conversions from irrigated agriculture
to native grasses will not be needed until approximately 2030, when blocks of
approximately 1 ,200 acres will be taken out of irrigated production every three or four
years. This timeline is a planning estimate and is subject to change to meet Thornton 's
water supply needs.
Thornton's revegetation program has resulted in the successful establishment of a self-
sustaining , dry-land cover on the farms that have been removed from agricultural
production . Each farm is unique , and the revegetation process is highly dependent on
natural moisture . Thornton evaluates and adjusts its revegetation methods on a yearly
and a farm-by-farm basis .
Thornton's Irrigated Farms
The Thornton farms that remain in agricultural production in Weld County are leased to
local farmers on a cash-lease basis at market rates . Water from ditch company shares
or wells is provided with the leases for irrigated land . Thornton generally provides
three-year leases to allow farmers to adequately plan their operations . These farms
had the following approximate crop distribution in 2014:
Page 6 of 9
Crop Percent
Shell Corn (used for dairy/ cattle feed) 30%
Silage Corn (used for dairy/cattle feed) 25%
Wheat (used for flour) 15%
Alfalfa (used for dairy/cattle feed) 19%
Sugar Beets (used for sugar) 6%
Onions (used for human consumption) 5%
The Water Supply and Storage Company (WSSC) water that was used to irrigate these
farms continues to be used within the WSSC irrigation system. The Farm Management
Office maintains a list of interested farmers and will rent the water on a first come, first
serve basis. Tenants of Thornton-owned farms have priority in renting this excess
water. After those requests have been fulfilled, then any water left is rented to other
farmers throughout the WSSC system.
Thornton's Residential Houses
In 2014, of the 72 farm houses owned by Thornton in Weld County, 66 were leased.
These houses are leased on an annual basis. Rent is charged at market rates and is
re-evaluated each year based on local market conditions. Thornton's houses provide
affordable housing options for over 150 residents in Weld County. Thornton's house
tenants take pride in their homes, and generally stay in the houses for over five years.
The City has tenants who have been leasing houses from Thornton since 1986, as well
as long-term tenants who have moved from one Thornton farm house to another to
meet their space needs.
House Repair Program
In 2009, Thornton began a comprehensive Farm House Repair Program. All of the
Thornton-owned houses were inspected by a local contracting company, and an
inventory of major repairs for each house was generated. In 2009, high priority repairs
were performed on 34 houses. Thornton then prioritized the remaining repairs and
developed a schedule and criteria for completion. The types of repairs are wide-
ranging, and include foundation improvements, site drainage improvements, new roofs,
new paint, siding, structural repairs and site grading as well as interior repairs such as
painting, and repairs to sheet rock, windows, and flooring. To date, approximately
$882,000 has been spent under this repair program. Repairs under this program are
completed by local vendors.
Sale of Thornton Houses
In 2013, Thornton began the process of selling some of the houses it owns in Weld and
Larimer Counties. To date seven houses have been sold: two in 2013 and five in 2014.
Four houses are currently for sale, or are being prepared for sale, and an additional 16
houses are being platted and exempted for sale beginning in 2015.
Page 7 of 9
Oil and Gas Leasing
During 2013 and 2014, Thornton experienced an increase in drilling activities for oil and
gas production on various farms. Leases were signed in late 2011 and early 2012 with
three different oil companies - Petroleum Development Corporation (PDC), Bayswater
Exploration, and Marathon Oil. In 2013, Marathon assigned its Thornton Leases to DJ
Resources. Another drilling company, Extraction Minerals, signed additional leases
during 2014. Depending upon the parcel, Thornton may own all or a portion of the
minerals. Marathon/DJ, and PDC have drilled a total of 16 wells on Thornton and
adjacent properties under these Leases. Additional wells may be drilled on these sites
in the future. The recently drilled wells, and wells that are planned to be drilled in the
near future, are all horizontal wells and have been drilled from multi-well pad sites.
Some additional wells have been drilled on Thornton-owned Farms where the City
doesn't own any of the minerals.
Because drilling locations can impact development locations as well as building
envelopes, Thornton also worked closely with the Highland School District in providing
assistance in the development of the mineral assets they acquired from Thornton. In
working with the various oil and gas ownerships, as well as the drilling companies, both
Thornton and the School District will benefit from the oil and gas exploration taking
place on these parcels just to the west of the Town of Ault.
Page tl of9
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�`� City of
Vie Thornton
December 23, 2014
Ms. Jenny Fuller, Office Manager
Office of Board of County of Commissioners
Weld County
1150 O Street
P.O. Box 758
Greeley, CO 80631
RE: City of Thornton Farm Property Management Update
Dear Ms. Fuller:
Attached for the Weld County Board of County Commissioners' review is the City of
Thornton's 2014 Annual Farm Management Operations Report, which summarizes
certain land management activities on Thornton's Weld County farm properties during
2014.
Thornton representatives will be available to meet with the Commissioners in 2015
during the month of March to address questions from the report, or other issues of
interest. I will contact you after the first of the year to set a date for this meeting and
to establish an agenda.
Thornton is pleased to continue open communication with the Commissioners and
County staff throughout the year. Please feel free to contact me with any questions or
concerns at 720-977-6504.
Sincerely,
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Emily Hurst'
Water Resources Manager
EH/dm
cc: Bud Elliot, Deputy City Manager — Infrastructure
Mark Koleber, Water Supply Director
Scott Twombly, Real Estate Manager
Brian Foss, Farm Operations Administrator
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