Water Services is requesting comments and/or recommendations from the Council on the scope of work for the grazing lease at Red Gap Ranch.

In 2004 the voters in the City of Flagstaff approved a bond initiative to purchase land and water rights for future water supply and to be paid for through the Utility (Water Services) fund. In 2005, the City purchased Red Gap Ranch as a future water source. The Ranch is located approximately 30 miles east of flagstaff along the I-40 corridor near Meteor City. It consists of approximately 8,500 acres of deeded lands (private and City-owned) and 15,000 acres of State Lands. The City of Flagstaff currently holds the grazing lease on all state lands within the boundary of Red Gap Ranch. The lease agreement the City of Flagstaff holds with the grazing operator also required the operator to apply for Arizona State Lands Division grazing sub-lease with the City of Flagstaff being the primary leaseholder.

 The prior owner of Red Gap Ranch had received grants from the Department of Agriculture that required the installation of four water storage tanks with watering troughs for wildlife and grazing animals. In order to meet the requirements of the grant, Water Services completed the installation of the four water tanks and then sought out a grazing operator to partner with to fulfill the final requirements of the grant. The operation and maintenance requirements of the original grant expire in  2020. This allows for other options in the grazing lease at Red Gap.

For the last 10 years, Manterola Sheep Company has held the lease for grazing at Red Gap Ranch, including a sublease to graze on State Lands. Purchasing is in discussions with the current grazing operator to extend their lease until a new lease is awarded. It is not a requirement of  Arizona State Lands Division (ASLD). The City of Flagstaff's grazing lease with Arizona State Land Division expires in 2023 and when the new contract is awarded by the City of Flagstaff, Arizona State Lands Division would issue a grazing sub-lease to the new grazing operator not to exceed the City of Flagstaff's ASLD lease.

Water Services continues to oversee the Red Gap Ranch with a Primary focus on protecting the future water supply with a secondary focus keeping the agricultural aspects of the ranch and potentially utilizing a portion of the ranch for sustainable energy. The new scope of work for the grazing lease is not animal-specific, however, it does limit the domestic livestock to 181 Animal Units.

Other opportunities exist that align with the City of Flagstaff Key Community Priorities and Objectives. These values are being incorporated into a Request for Proposal from potential grazing operators. While this solicitation is for grazing, it does not provide exclusive rights and allows for other optional uses of the land by the City of Flagstaff  Water Services is emphasizing the importance of environmental stewardship.

If the scope of work meets the Council's approval, a solicitation would be posted by October 15, 2020, with a due date three weeks after the initial posting. Recommendation for award of the grazing lease would be anticipated at the first Council meeting in December.

Key Community Priorities and Objectives: Safe and Healthy Community, Sustainable, Innovative Infrastructure, Environmental Stewardship.