LEASE POLICY The Governing Board authorized a new Lease Policy at its September Board meeting and deleted the old Lease Policy

NEW LEASES, RESERVATIONS, LEASEBACKS To the extent possible, all leases should be standardized Rent shall be based on an approved appraisal or competitive bid. Revenue may be based on $ per acre or % of gross sales received from crop harvesting Lease should be consistent with crop cycles Term should extend to date of project certification To the extent possible, all leases should be standardized Rent shall be based on an approved appraisal or competitive bid. Revenue may be based on $ per acre or % of gross sales received from crop harvesting Lease should be consistent with crop cycles Term should extend to date of project certification

NEW LEASES CONTINUED... Should be competitively bid when time permits When competition is not possible, Waiver of Competition approved by Governing Board License Agreement based on written quotes may be utilized for crop sales or land uses for less than 12 months Governing Board approved Waivers of Competition not required for License Agreements Should be competitively bid when time permits When competition is not possible, Waiver of Competition approved by Governing Board License Agreement based on written quotes may be utilized for crop sales or land uses for less than 12 months Governing Board approved Waivers of Competition not required for License Agreements

RENEWAL OF EXISTING LEASES If existing lease meets the following conditions, it may be renewed and the competitive bid process may be waived if Lessee: Agrees to appraisal to establish market rent (1 st year and every 4 th year of the term Agrees to annual CPI index or agricultural commodity index escalation for other years of the term Has received satisfactory evaluations from the lease project manager Agrees to any modifications to the Lease terms and conditions as determined by District staff Regardless of the previous criteria, the final decision as to whether a lease is renewed or competitively bid is at the sole discretion of the District Governing Board or its delegatee. If existing lease meets the following conditions, it may be renewed and the competitive bid process may be waived if Lessee: Agrees to appraisal to establish market rent (1 st year and every 4 th year of the term Agrees to annual CPI index or agricultural commodity index escalation for other years of the term Has received satisfactory evaluations from the lease project manager Agrees to any modifications to the Lease terms and conditions as determined by District staff Regardless of the previous criteria, the final decision as to whether a lease is renewed or competitively bid is at the sole discretion of the District Governing Board or its delegatee.

ACCEPT OR REJECT The Lessee shall have 10 business days from receipt of the renewal terms to accept by delivering written notice by certified mail. District’s failure to receive acceptance within the 10 days shall be deemed a rejection of the terms. The Lessee shall have 10 business days from receipt of the renewal terms to accept by delivering written notice by certified mail. District’s failure to receive acceptance within the 10 days shall be deemed a rejection of the terms.

LEASE TERMINATION 6 month or end of current crop cycle –whichever is less unless otherwise approved by the Governing Board

DISTRICT PROTECTION Lessees are required to deposit one year’s estimated property and sales tax liability with the District upon execution of the lease. Funds are held in escrow. In lieu of depositing funds, Lessee may deliver an irrevocable letter of credit or payment bond. Lessee is responsible for ad valorem and non-ad valorem property taxes, special assessments and sales taxes levied against leased property Lessees are required to deposit one year’s estimated property and sales tax liability with the District upon execution of the lease. Funds are held in escrow. In lieu of depositing funds, Lessee may deliver an irrevocable letter of credit or payment bond. Lessee is responsible for ad valorem and non-ad valorem property taxes, special assessments and sales taxes levied against leased property

AUTHORIZATION OF LEASES In the event of any inconsistency between the District’s Procurement Policy and the District’s Land Management Policy concerning the administration of agricultural leases, the Land Management Policy shall control.

EXCEPTIONS The Governing Board delegated authority to the Land Resources Committee to approve exceptions to the policy without further review by the District Leadership Team or Management Action Team.