AGENDA

BOARD OF TRUSTEES OF
THE INTERNAL IMPROVEMENT TRUST FUND

MAY 15, 2001

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Item 1 Minutes

Submittal of the Minutes from the March 29, 2001 Cabinet Meeting.

(See Attachment 1, Pages 1-19)

RECOMMEND APPROVAL

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Item 2 Wald Acquisition Agreement/East Everglades CARL Project

DEFERRED FROM THE APRIL 24, 2001 AGENDA

REQUEST: Consideration of authorization to acquire a 100 percent interest in 18.41 acres (120 lots) within the East Everglades CARL project from Morton L. Wald.

COUNTY: Miami-Dade

LOCATION: Section 17, Township 54 South, Range 39 East

CONSIDERATION: $816,000

STAFF REMARKS: The East Everglades CARL project is ranked number 4 on the CARL Mega/Multiparcel Project List, as the list appears in the 2000 Interim CARL Report approved by the Board of Trustees on October 24, 2000, and is funded under the Division of State Lands' Land Acquisition Workplan. The area known as the East Coast Buffer covers 59,088 acres. Of this, 2,189 acres will be protected by mitigation and 33,817 acres are of a lower priority, including land owned by local governments and acres that may not need to be acquired. Of the remaining 23,082 acres proposed for acquisition, 18,415.10 acres have been acquired. After the Board of Trustees approves this acquisition, 4,648.49 acres, or 20 percent of the area, will remain to be acquired.

The East Coast Buffer consists of approximately 59,088 acres of marshes, reservoirs, and groundwater recharge areas in Palm Beach, Broward and Miami-Dade counties. However, the most significant aspect of the East Coast Buffer is its role in restoring the Everglades. In 1992, Congress authorized the U.S. Army Corps of Engineers (COE) to conduct a restudy of the Central and Southern Florida Project. The reconnaissance report for this restudy was completed in 1994 and COE incorporated the East Coast Buffer into its analysis, referring to the area as the "Water Preserve Areas." The Final Restudy Report and Programmatic Environmental Impact Statement for the restudy were released on April 7, 1999, for final public review and comment. The report received a favorable review by the Department of Environmental Protection (DEP) and other agencies and was submitted to Congress on July 1, 1999, under the title of the Comprehensive Everglades Restoration Plan (CERP). Congress authorized the CERP, as part of the Water Resource Development Act of 2000, to provide the framework for Everglades restoration. Further detailed study of the Water Preserve Area project component has been authorized by Congress, and a final detailed plan will be prepared by September 2001.

The purpose of the East Coast Buffer/Water Preserve Areas is to: (1) increase storage and hold more water in the system by controlling seepage from the Everglades, thus restoring more natural Everglades hydropatterns; (2) capture and store excess stormwater currently discharged to coastal waters, thus retaining an important water supply source for both urban and natural systems; (3) provide a buffer between natural and developed areas; (4) preserve and protect

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wetlands outside the publicly-owned Everglades; and (5) provide important transitional land uses between the natural and developed areas. East Coast Buffer/Water Preserve Areas may also enhance flood control in areas to the east of these lands. The East Coast Buffer lands are under intense development pressure in all counties. Therefore, immediate public acquisition is needed to preserve and enhance wetlands and to preserve opportunities for the restoration of the Everglades ecosystem.

To implement this restoration, during the last decade, the South Florida Water Management District (District) has acquired over 16,000 acres at a cost of $119,000,000. In anticipation of the Board of Trustees' participation in this effort, the East Coast Buffer was added to the East Everglades CARL project on March 15, 1996. District funding is now limited, but the District offered to take the lead in acquiring the property on behalf of the Board of Trustees. On December 8, 1998, the Board of Trustees authorized staff to enter into an acquisition agreement to acquire various ownerships located in the East Coast Buffer portion of the East Everglades CARL project, in accordance with section 259.041(16), F.S., utilizing the procedures set out in section 373.139, F.S. On June 15, 1995, the Board of Trustees approved the use of the District's procedures to allow the District to acquire lands to be held by the Board of Trustees. Since the land being acquired will be part of a federal project, federal acquisition procedures are being used.

The Central and Southern Florida Project was authorized 50 years ago to provide flood protection and fresh water to south Florida. This project accomplished its intended purpose and allowed people to more easily live on the land; however, it did so at a tremendous ecological cost to the Everglades. While the population has risen from 500,000 in the 1900s to more than 6 million today, the number of native birds and other wildlife have dwindled, and some have vanished. The Water Resources Development Acts of 1992 and 1996 provided COE with the authority to review the current Central and Southern Florida Project. COE was asked to develop a comprehensive plan to restore and preserve South Florida's natural ecosystem while enhancing water supplies and maintaining flood protection. Resulting from this effort, the CERP calls for a series of water system improvements over more than 20 years, with an estimated cost of $7.8 billion. The CERP will incorporate a number of restoration projects already underway. It will be the most ambitious ecosystem restoration effort ever undertaken in the United States. Its fundamental goal is to capture most of the fresh water that now flows unused to the Atlantic Ocean and the Gulf of Mexico, and to deliver it to the natural system, agricultural areas or urban areas, when needed.

The subject land is needed for the CERP's Bird Drive Basin project component. This is one of the 68 project components that comprise the CERP. The CERP puts more water in the Everglades and reduces groundwater flows coming out of the Everglades to prevent flooding of the adjacent private lands. The Bird Drive Basin project is intricate to the overall Everglades restoration effort by providing several hydrologic functions. First, the Bird Drive Basin project is designed to replace groundwater recharge from Everglades seepage that is interrupted by seepage management features of the CERP. Groundwater recharge in this area is critical to the West Dade Wellfield and the drinking water supply for Dade County. Second, the Bird Drive Basin project component will reduce seepage from the Everglades National Park's buffer areas by increasing water table elevations east of Krome Avenue. Third, the facility will also complement flood protection in the basin by providing C-4 canal flood peak attenuation. Fourth, the facility will also provide water supply deliveries to the South Dade Conveyance System and Northeast Shark River Slough for Everglades National Park restoration. The Bird Drive Basin project component accomplishes these functions by capturing runoff from the western C-4 Basin and accepting advanced treated inflows from the West Miami-Dade Wastewater Treatment Plant into the recharge area. A seepage management

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Item 2, cont.

system will be constructed around the east and southern perimeters of the recharge area to allow water supply deliveries to the South Dade Conveyance System and Northeast Shark River Slough.

The District has acquired an agreement for sale and purchase to purchase the Morton L. Wald parcel at 100 percent of appraised value. Pursuant to the terms of the acquisition agreement, the District shall be reimbursed for all costs associated with acquiring the property, including pre-acquisition and closing related costs. The Board of Trustees' purchase price will be 100 percent of the contract price negotiated by the District, plus 100 percent of the cost incurred in the purchase of the property. Title to the property acquired will vest in the Board of Trustees.

As provided for in the acquisition agreement, on December 14, 2000, the Governing Board of the District adopted Resolution 2000-105, requesting the Board of Trustees' purchase price for the parcel, reimbursement of 100 percent of its pre-acquisition costs and reimbursement of 100 percent of its closing costs. Pursuant to the acquisition agreement, the pre-acquisition and closing costs will be reimbursed from CARL incidental expense funds. The District's resolution contains all of the assurances required by the acquisition agreement.

The East Coast Buffer portion of the East Everglades CARL project will be managed by the District in conjunction with COE Everglades restoration projects. As local sponsor for the restoration projects, the District is required to hold a title interest sufficient to meet COE certification requirements. While COE would prefer the sponsor to hold fee title, section 259.101(3)(g), F.S., states that title to lands acquired with P2000 funds under the CARL program must vest in the Board of Trustees. The acquisition agreement includes a provision whereby the Board of Trustees will convey to the District an easement, consistent with section 253.034(4), F.S., for any lands acquired under this agreement that are to become part of a COE-approved Everglades restoration project. DEP staff is currently working with COE and the District to develop an easement sufficient for COE certification. COE will require the easement to include a statement that the land interest will not be impaired during the life of the project, and that COE is granted an irrevocable right to enter the project lands for the purpose of constructing, inspecting, completing, operating, repairing, maintaining, replacing or rehabilitating the projects. In the event that COE determines that fee title by the District is required to meet certification requirements, statutes would need to be amended to permit entities other than the Board of Trustees to hold title to lands acquired with P2000 funds under the CARL program.

This acquisition is consistent with section 187.201(10), F.S., the Natural Systems and Recreational Lands section of the State Comprehensive Plan.

RECOMMEND DEFERRAL TO THE JUNE 12, 2001 AGENDA

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2^nd Substitute Item 3 Fisheating Creek Expanded Corridor Citizen Advisory Board Creation

REQUEST: Initiate the creation of a thirteen-member citizen Advisory Board to make recommendations to the Fish and Wildlife Conservation Commission as to the future management issues involving the Fisheating Creek Expanded Corridor.

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2^nd Substitute Item 3, cont.

COUNTY: Glades

STAFF REMARKS: On May 25, 1999, the Board of Trustees of the Internal Improvement Trust Fund approved a Settlement Agreement in the case of Board of Trustees of the Internal Improvement Trust Fund of the State of Florida, Plaintiff and Save Our Creeks, Inc. and Environmental Confederation of Southwest Florida, Intervenors vs. Lykes Bros. Inc., a Florida Corporation. The Settlement Agreement requires, among other things, the following:

"19. The Trustees shall create a thirteen-member Advisory Board composed of one County Commissioner from Glades County, two representatives of Lykes Bros. Inc., two representatives from Save Our Creeks, Inc., two representatives from the Environmental Confederation of Southwest Florida, Inc., one representative from the Division of State Lands of the Florida Department of Environmental Protection, one representative from an environmental organization, two representatives of Lykes' lessees, one concerned citizen, and one representative of the Managing Agency if the agency desires to participate. The representatives shall be designated by their own organizations except for the concerned citizen and the representative of an environmental group who shall be designated by the Trustees from a list submitted by the Advisory Board."

"22. The Citizen Advisory Board created pursuant to paragraph 19 above may make recommendations to the Managing agency as to future management issues involving the Expanded Corridor. The Managing agency has no financial obligation to fund the activities of the Advisory Board."

The members as named by their respective organizations are as follows:

County Commissioner of Glades County: Honorable Commissioner Bob Giesler, Chairman

Representatives of Lykes Bros. Inc.: Mr. John Tallent and Mr. Mike Milicevic.

Representatives from Save Our Creek, Inc.: Ms. Becky Hendry and Mr. Jon Coffey.

Representative of the Environment Confederation of Southwest Florida: Ms. Ellen Petersen and Mr. Wayne Daltry

Representative of the Division of State Lands: Mr. Greg Brock

Representatives of Lykes' Lessees: Mr. Jim Bryan and Ms. Lorraine Hogue

Representative of the Managing Agency: Mr. Mark Robson

The following two members shall be appointed by the Board of Trustees from two lists submitted by the Advisory Board:

One Representative of an Environmental Organization

One Concerned Citizen

To facilitate the appointment of the remaining two members, the Department of Environmental Protection staff will convene a meeting of the above eleven members to develop a list of nominees for submission to the Board of Trustees.

Section 259.032(10)(b), F. S., requires FWCC to develop a management plan for the Fisheating Creek Expanded Corridor with input from an advisory group. The advisory group is required to conduct at least one public hearing in the county where the subject property is

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2^nd Substitute Item 3, cont.

located and is required to reconvene once every five years for the purpose of recommending updates and revisions to the management plan. At a minimum the advisory group must include representatives of FWCC, co-managing entities, local private property owners, the appropriate soil and water conservation district, a local conservation organization, and a local elected official. The management plan is required to be in strict compliance with the terms and conditions the Settlement Agreement. Accordingly, given a common interest in Fisheating Creek, the specificity of the Settlement Agreement concerning the management of the property, and the possibility for overlapping membership between the statutorily-required advisory group and the Settlement Agreement Advisory Board, FWCC will include the Settlement Agreement Advisory Board members as part of the statutorily required advisory group. In addition, FWCC will appoint other individuals as it deems appropriate.

The Settlement Agreement provides that the Advisory Board to be created by the Board of Trustees may make recommendation to the managing agency concerning future management issues involving the Expanded Corridor. Accordingly, the Advisory Board may meet as often as it deems necessary, may develop procedures for conducting its meetings, and may make recommendations to the managing agency as it deems necessary. However, it should be noted that the managing agency has neither the responsibility to convene such meetings nor the financial obligation to fund the activities of the Advisory Board.

(See Attachment 3, Pages 1-3)

RECOMMEND APPROVAL

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Item 4 2001 Florida Forever List & Five-Year Plan

REQUEST: Consideration of: (1) the Department of Environmental Protection's 2001 Florida Forever Five-Year Plan; and (2) the Acquisition and Restoration Council's recommended 2001 Florida Forever List.

LOCATION: Statewide

APPLICANT: Department of Environmental Protection, Division of State Lands, on behalf of the Acquisition and Restoration Council

STAFF REMARKS: Pursuant to sections 259.035 and 259.105, F.S., and chapter 18-24, F.A.C., the Acquisition and Restoration Council (ARC) adopted the 2001 Florida Forever List of acquisition projects on April 6, 2001. The 2001 Florida Forever List consists of 90 projects; 79 projects that were transferred from the 2000 CARL Priority List, and 11 new projects developed by ARC. Based on resource values, acquisition status and other relevant factors, ARC ranked these 90 projects in two groups: 29 Group A projects, and 61 Group B projects. Based on acquisition processing factors, projects from Groups A and B were separated into three subgroups: Full Fee, Less-Than-Fee, or Small Parcels.

Fourteen projects included on the 2000 CARL Priority List are not included on ARC's recommended 2001 Florida Forever List. Alford Arm (Leon County) and Apalachicola River [Less-Than-Fee: Hatcher Tract (Liberty County)] were removed because they were completely acquired. Cayo Costa Island (Lee County), Cypress Creek (St. Lucie County), Escribano Point (Santa Rosa County), Heather Island (Marion County), Longleaf Pine [Chassahowitzka

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Item 4, cont.

Site (Hernando County)], Newnan's Lake (Alachua County), and Suwannee Buffers [Falling Creek Falls and Trillium Slopes Sites (Suwannee and Colombia Counties)] were removed because the remaining owners are unwilling to sell at this time and each project is included on another Florida Forever program acquisition list. Apalachicola River [Atkins Tract (Calhoun County)], Barnacle Addition (Miami-Dade County), and Lake Powell (Bay and Walton Counties) were removed because each owner was an unwilling seller and the properties are being developed or their resources have been compromised. Freedom Tower (Miami-Dade County) was removed because the owner will not allow us to appraise the property.

Two CARL projects were combined with other CARL projects, and one new Florida Forever project was added to an existing CARL project. Charlotte Harbor was combined with Cape Haze/Charlotte Harbor; Suwannee Buffers [Bargain/Shared = Deep Creek Site (Columbia County)] was combined with Pinhook Swamp; and the new Bell Ridge Sandhill project (Gilchrist County) was added to the Longleaf Pine Ecosystem CARL project. In addition to the Bell Ridge Sandhill, eleven other new projects were added to the 2001 Florida Forever List: Carr Farms/Price's Scrub (Alachua and Marion Counties), McKeithen Site (Columbia County), Millstone Plantation (Leon County), Northeast Florida Blueway (Duval County), Old Town Creek Watershed (Hardee and Polk Counties), Panther Glades [Full Fee & Less-Than-Fee (Hendry County)], Tiger Island/ Little Tiger Island (Nassau County), Twelve Mile Slough (Hendry County), and Volusia Conservation Corridor [Full Fee & Less-Than-Fee (Volusia County)].

The 2001 Florida Forever Five-year Plan and List are consistent with section 187.201(10), F.S., the Natural Systems and Recreation Lands section of the State Comprehensive Plan.

Pursuant to section 259.04(1)(c), F.S., within 45 days after ARC submits the Florida Forever List to the Board of Trustees, the Board of Trustees shall approve, in whole or in part, the list of acquisition projects in the order of priority in which such projects are presented. If approved, the Division of State Lands will develop a workplan to acquire projects in accordance with rules 18-24.006 and 18-24.007, F.A.C.

(See Attachment 4, Page 1; 2001 Florida Forever Five-year Plan to be submitted separately.)

RECOMMEND (1) ACCEPTANCE OF THE 2001 FLORIDA FOREVER FIVE-YEAR PLAN; AND (2) APPROVAL OF THE 2001 FLORIDA FOREVER LIST

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Substitute Item 5 Eminent Domain Authorization/Delegation of Authority/Golden Gate Estates/Save Our Everglades (Phase V) CARL Project

REQUEST:  Consideration of a request to (1) direct the Department of Environmental Protection to acquire fee simple title to all remaining land within the portion of the Save Our Everglades CARL project (Phase V) lying south of I-75 on which two bona fide offers have been made by the exercise of the power of eminent domain pursuant to the provisions of chapters 259, 73 and 74, F.S.; and (2) delegate authority to the Secretary of the Department of Environmental Protection to accomplish the acquisition as described herein through negotiation or condemnation, including authority to prepare and execute all necessary parcel-specific condemnation resolutions.

COUNTY:  Collier

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Substitute Item 5, cont.

STAFF REMARKS: The Save Our Everglades CARL project is ranked number 3 on the CARL Mega/Multiparcel Project List approved by the Board of Trustees on February 22, 2000, and is eligible for negotiation under the Department of Environmental Protection (DEP), Division of State Lands' (DSL) Land Acquisition Workplan. That portion of the project lying south of I-75, commonly referred to as Golden Gate Estates South, contains 55,566.2 acres, of which 47,867.94 acres have been acquired or are under agreement to be acquired, leaving 7,698.26 acres, or 14 percent, remaining to be acquired. The Golden Gate Estates South portion of this project includes the Southern Golden Gate Estates subdivision and surrounding acreage tracts bordered by I-75 to the north, US-41 to the south and the Fakahatchee Strand and Belle Meade CARL projects to the east and west, respectively.

On January 23, 2001, the Board of Trustees recognized that (1) property within the Save Our Everglades CARL project lying south of I-75 is of special importance to the state; (2) the acquisition of the land is necessary to protect hydrological connections among Big Cypress National Preserve, Fakahatchee Strand State Preserve, and Everglades National Park, and to protect and restore the Everglades, which is an endangered natural resource of unique value to the state; and (3) the failure to acquire this property will result in irreparable loss to the state and seriously impair the state's ability to manage or protect other state-owned lands. DEP has since been directed by the Board of Trustees to proceed with acquisition of the parcels in Phases I, II, III, and IV.

Public acquisition is essential to continue the conservation, preservation and restoration of this endangered portion of the western Everglades ecosystem that is a vital component of the Comprehensive Everglades Restoration Plan (CERP). Conserving this land is critical to the ecosystem in the western Everglades, its wildlife and the water quality throughout the area.

In 1996, the hydrological restoration plan was identified as a "Critical Project" under the Federal Water Resources Development Act making it eligible for federal funds. The project was subsequently added to CERP.

The acquisition will allow the restoration of significant wetlands crucial to the reestablishment of the historic water flow pattern in the western Everglades. Nearly half of this region's water flows into Everglades National Park.

Purchasing this portion of the Save Our Everglades CARL project will also help preserve and restore the fresh water flow necessary for maintaining the rich productivity of Gulf Coast estuaries, such as Rookery Bay and the Ten Thousand Islands. Moreover, the timely implementation of the hydrological restoration plan will restore important habitat for numerous endangered and threatened species, including the Florida panther, one of the world's most endangered mammals.

Public acquisition of this portion of the Save Our Everglades CARL project will preserve a large piece of South Florida's unique ecosystem. Ultimately, this will contribute to the formation of a continuous public conservation corridor extending across South Florida from the Gulf Coast to approximately ten miles from the Atlantic Ocean. It will help protect the western Everglades ecosystem from encroachment of residential, commercial and industrial development.

In 1999, the Big Cypress Basin Board advised DEP that the hydrologic restoration was scheduled to commence as early as October 2002, and 100 percent public ownership would be required. After multiple rounds of appraisals and offers over the last fifteen years, nearly 4,000 parcels in Southern Golden Gate Estates and the surrounding area still remain to be

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Substitute Item 5, cont.

acquired. Due to the relatively large number of remaining parcels, a plan was developed to increase the percentage of parcels acquired by voluntary means while assuring that all lands are acquired by October 2002. The first step in the plan was to seek authority from the Board of Trustees to offer amounts in excess of the appraised value in an effort to acquire as much property as possible without having to resort to the use of eminent domain. On July 11, 2000, the Board of Trustees authorized the Director of DSL, or her designee, to extend bona fide offers and approve any contract for the sale and purchase of land at $5,000 over or up to 125 percent of the appraised value, whichever is greater, when the purchase price per parcel does not exceed $50,000, and at up to 125 percent of the appraised value when the purchase price per parcel exceeds $50,000.

In anticipation that a substantial portion of the remaining parcels will still require the use of eminent domain to assure that all lands are in public ownership by the time the restoration is to begin, preliminary meetings have been held with the Chief Judge in Collier County. Current projections are that it may take nearly two years to process the parcels that cannot be acquired voluntarily through the court system of Collier County. To assure a constant flow of parcels to the Office of the Attorney General, the plan contemplates the processing of parcels in multiple phases over the next 18 months.

On the advice of the Office of the Attorney General, appraisals were updated to assure that offers would satisfy the bona fide offer requirement and on March 26, 2001, second bona fide offers were tendered to the 220 owners (224 parcels) in Phase V. The initial mailing and follow-up negotiations with the owners within Phase V resulted in the successful negotiation and approval of contracts for 69 of the 224 parcels or 31 percent of Phase V. Negotiations for the acquisition of the 155 remaining parcels in Phase V have reached an impasse; however, the bona fide offer requirement of section 259.041(14), F.S., has been satisfied. In the event one or more of the parcels placed under contract cannot close for any reason, the authority requested today covers all 224 parcels. Parcels under contract will be held by DSL and only parcels that have reached impasse or parcels that cannot be closed by voluntary means will be turned over to the Office of the Attorney General.

Section 259.041(14), F.S., authorizes the Board of Trustees, by majority vote of all of its members, to direct DEP to exercise its power of eminent domain pursuant to the provisions of chapters 73 and 74, F.S. Eminent domain may be used to acquire any of the property on the CARL priority list if (1) the state has made at least two bona fide offers to purchase the land through negotiation and an impasse between the state and the land owner has been reached; and (2) the land is of special importance to the state because (a) it involves an endangered or natural resource and is in imminent danger of being developed; (b) it is of unique value to the state and failure to acquire the property would constitute an irreparable loss to the state; or (c) the failure to acquire the property would seriously impair the state's ability to manage or protect other state-owned lands.

The parcels included in Phase V of the Save Our Everglades project lying south of I-75 meet these criteria: (1) the state has made at least two bona fide offers and has been unable to acquire these parcels through negotiation; and (2) in section 373.4592(1), F.S., the legislature has recognized that the Everglades ecological system is unique in the world and one of Florida's great treasures. They also recognize that the CERP is important for restoring the Everglades ecosystem and sustaining the environment, economy, and social well being of South Florida. The Everglades ecological system is endangered as a result of adverse changes in water quality, and in the quantity, distribution, and timing of flows and, therefore, must be restored and protected. The hydrological restoration of these lands is an essential component of the CERP.

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Substitute Item 5, cont.

Pursuant to the Board of Trustees' eminent domain policy, DSL has mailed proper notice to all owners of record in Phase V at least 45 days prior to this Board of Trustees' meeting. In accordance with the eminent domain policy, the notice advised the owners that homesteaded property was exempt from eminent domain without the owner's written permission. As of May 8, 2001 at 5:00 p.m., only four responses to the written notice had been received. While four of the owners representing four parcels objected to the use of eminent domain, they only represent two percent of the remaining ownerships in Phase V. Based on research of tax records by staff, there does not appear to be any homesteaded property within Phase V. If it is later determined that there is any homesteaded property and the owner has not given written consent, that parcel will be excluded from the eminent domain process unless the Board of Trustees waives its policy on homestead property. If the Board of Trustees approves this item, DSL intends to amend its existing contract with the Office of the Attorney General to handle the condemnation of these parcels. Once second bona fide offers are tendered on additional groups of parcels, staff will return to the Board of Trustees periodically to seek authority to pursue those parcels that have reached impasse or parcels that cannot be closed by voluntary means. It is anticipated that there may be as many as ten such groups or phases.

The property will be managed by the Department of Agriculture and Consumer Services, Division of Forestry as an addition to Picayune State Forest. DEP's Division of Recreation and Parks will manage the property in the area east of the Faka Union Canal. The South Florida Water Management District will coordinate the implementation of the hydrologic restoration project.

These acquisitions are consistent with section 187.201(10), F.S., the Natural Systems and Recreational Lands section of the State Comprehensive Plan.

(See Attachment 5, Pages 1-15)

RECOMMEND APPROVAL

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Item 6 USDA Forest Service/BOT Memorandum of Understanding/Exchange of Mineral Rights/Substitution of Acquisition Procedures

REQUEST: Consideration of a request to (1) enter into a memorandum of understanding between the U.S. Department of Agriculture, Forest Service and the Board of Trustees for a value-for-value exchange of mineral and other property interests, and the associated joint processing documents, such as an agreement to initiate, survey standards, appraisal standards, and an exchange agreement; and (2) substitute the land acquisition procedures of the U.S. Department of Agriculture, Forest Service for this transaction pursuant to section 259.041(1), F.S.

COUNTY: Statewide

CONSIDERATION: Value-for-Value (To be determined by appraisal.)

STAFF REMARKS: Many tracts of state-owned land that were originally acquired from the federal government do not contain all or a portion of the associated oil, gas and mineral rights (mineral rights). These subsurface mineral rights were retained all or in part by the federal government. Obtaining the federal mineral interests under state-owned surface rights has been

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a state goal since the early 1970's. In addition, there are now numerous parcels owned in fee title by the U.S. Department of Agriculture, Forest Service (USFS) that are either managed by the state or could more logically be managed by the state.

In 1994, the U.S. Department of the Interior, Bureau of Land Management (USBLM) and USFS initiated serious discussions with the state regarding a lands-for-minerals exchange, offering nineteen mineral interest properties to the state in 1995. In response, in 1996, the Land Acquisition Advisory Council (now the Acquisition and Restoration Council) approved the addition of the federal mineral rights (Split Estate tract) to the Pinhook Swamp CARL project for exchange purposes.

In 1998, the Board of Trustees approved a memorandum of understanding between USFS, USBLM, and the Board of Trustees concerning mineral appraisal procedures (the appraisal MOU). Research at that time, however, indicated that the state did not own the surface rights on five of the nineteen properties. The 1998 appraisal MOU, therefore, only included a list of 14 properties of state-owned surface and federally owned mineral rights. The two largest tracts of state-owned land for which the federal government owns the mineral rights are the Withlacoochee and Blackwater River State Forests. In 1957, the USDA deeded approximately 182,300 acres of land to the state for Blackwater River State Forest, reserving 75 percent of the mineral interests. In 1958, the Florida Board of Forestry entered into a 25-year agreement of sale with the USDA to acquire the approximately 113,800-acre Withlacoochee State Forest, subject to the reservation by the federal government of 100 percent of the mineral interests. Once acquired, the Withlacoochee State Forest was conveyed to the Board of Trustees in 1983, still subject to the federal government's reservation of 100 percent of the mineral interests. The list of properties available for exchange has been reviewed and recently updated, and is included in Exhibit I in the MOU currently under consideration (the master MOU).

In the past year and a half, all parties have intensified their efforts to expedite the exchange process and have been meeting regularly to work out the multitude of details required by both the federal and state governments for such a transaction. The conceptual plan agreed to by USFS and the affected state agencies is to value the federal mineral interests under the Withlacoochee and Blackwater River State Forests and certain federal holdings that would be more appropriately owned and managed by the Board of Trustees and exchange those interests and holdings for Board of Trustees-owned lands that would be more appropriately owned and managed by USFS. If the initial valuation of the lands to be exchanged is not equal, the USFS has the ability and intent to pay up to a 25 percent of the federal land value as cash boot to equalize the exchange. The Board of Trustees will have the option of paying a cash boot or removing acreage to equalize the exchange.

The updated appraisal MOU is included as Exhibit IV in the proposed master MOU. The appraisal MOU approved in 1998, involved only the appraisal of the federally owned mineral interests. Because the complexity and costs of that appraisal assignment were unknown prior to the start, the appraisal process was to be divided into two phases. The first phase would have revealed the complexity, and hence the costs, of the second phase. At that point, USFS and the state were to further negotiate the allocation of the appraisal expenses, which may have been costly if mineral testing was necessary.

As there are now other properties involved in the exchange, both parties agree to bear the costs of the appraisal for the property they are acquiring, as outlined in the agreement to initiate. For Board of Trustees acquisitions of conservation land, this is consistent with current procedures. If the state pays for the appraisal of the federal mineral interests, the need to negotiate payment

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Item 6, cont.

of the appraisal fees with USFS is eliminated; thus, the appraisal will not need to be done in two phases as was outlined in the 1998 appraisal MOU.

Under the amended appraisal MOU that is an exhibit to the master MOU, the Florida Department of Environmental Protection's Division of State Lands (DSL) and USFS will jointly select the appraisers. Each agency will have the opportunity to individually review and approve the appraisal of each property in the exchange.

Under federal law when doing an exchange, federal agencies are required to obtain a single appraisal and to negotiate an exchange agreement in which the value of the land being received is equivalent to the value of the land being given up. Recognizing that different surveying and appraisal procedures are required under the respective laws, both the federal and state agencies have devised a process acceptable to both parties. Section 259.041, F.S., allows the Board of Trustees to substitute, for its own procedures, other reasonably prudent procedures so long as it believes the public's interest is being reasonably protected. Considering that this transaction involves two governmental agencies and the parties will jointly select and review each appraisal procured for this exchange, staff believes the alternative procedure of obtaining only one appraisal is reasonably prudent and will protect the public's interest.

The amended appraisal MOU also incorporates mutually agreed upon timber cruise standards for the valuation of timberlands and Exhibit III provides for the use of state survey standards to survey all lands involved in the exchange. USFS has agreed to the use of the state timber cruise and survey standards.

Both the state and federal governments will benefit greatly from the exchange. From the state's perspective, managing efficiency will increase when all property rights (surface and subsurface) are owned. The state will be acquiring approximately 296,300 acres of minerals under state-owned surface rights. Additionally, the exchange will result in the state acquiring the surface and subsurface of approximately 357 acres of federal land (undivided 100 percent title interest) upon which Rocky Bayou State Park is located, five tracts containing approximately 240 acres of federal land within the boundary of the Seminole State Forest, and approximately 4,053 acres of federal land within the Tates Hell State Forest New River Corridor. In return, USFS will obtain approximately 33,700 acres of the westernmost portion of the recently acquired Rayonier tract within the Pinhook Swamp CARL project, consolidating three disjunctive units of the Osceola National Forest. USFS will also receive three tracts containing approximately 214 acres within the boundary of the Ocala National Forest.

It is also noteworthy that the Florida Department of Agriculture and Consumer Services, Division of Forestry pays 15 percent of gross revenue receipts to the counties and the state has a payment-in-lieu of taxes program. Similarly on national forests, USFS makes annual payments to counties. The first payment is equal to 25 percent of all revenues made from national forest lands, such as timber sales, special uses, and easements. The second is a payment in-lieu-of taxes that is annually allotted by Congress.

It is estimated that all parties will complete the formal documents and procedures required to finalize the exchange by the end of 2002 or early 2003. If the Board of Trustees approves this item today, the director of DSL will execute the master MOU, the appraisal MOU and the agreement to initiate on behalf of the Board of Trustees.

Board of Trustees

Agenda - May 15, 2001

Page Twelve

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Item 6, cont.

USFS will manage the land it receives in the exchange as a unit of the national forest system under the same general policy guidelines under which the land has been managed since its acquisition.

The primary goals of management of the Pinhook Swamp CARL project are: to conserve and protect significant habitat for native species or endangered and threatened species, to conserve, protect, manage, or restore important ecosystems, landscapes, and forests, in order to enhance or protect significant surface water, coastal, recreational, timber, fish or wildlife resources which local or state regulatory programs cannot adequately protect; and to provide areas, including recreational trails, for natural resource-based recreation.

These guidelines have been incorporated into the MOU. Additionally, federal management practices are also directed by the following:

· Proclamation establishing Osceola as a National Forest in 1931:

· National Forest System Organic Act of 1897, which states, "No national forest shall be established, except to improve and protect the forest within the boundaries¼ "

· Forest and Rangeland Renewable Resources Planning Act of 1974, which states that National Forest Management Plans shall be developed and maintained in coordination with state and local governments and other federal agencies. This Act also includes provisions for providing a multitude of renewable forest resources;

· National Forests in Florida's Land and Resource Management Plan of 2000, which allocates currently owned (Federal) Pinhook land to primarily land to be managed in a condition to allow or mimic natural processes and patterns to maintain a rich diversity of native plants and animals, produce pole timber and large pine saw timber, plus a wide range of opportunities for people to use and experience the forest.

This acquisition is consistent with section 259.101(9)(a)3.(c), F.S. and with section 187.201(10), F.S., the Natural Systems and Recreational Lands section of the State Comprehensive Plan.

(Backup to be submitted separately.)

RECOMMEND APPROVAL

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Item 7 Florida National College, Inc. Offer Acceptance/Land Sale/DOC/Glenbeigh Hospital Property

REQUEST: Consideration of acceptance of an offer submitted by Florida National College, Inc. in the amount of $ 4,025,000 for a 4.45-acre parcel of state-owned land consisting of a 100 bed hospital building and parking lot on 2.58 acres and a 1.87 acre vacant parcel in Dade County and leased to the Department of Corrections.

COUNTY: Dade

Deed No. 30781

LOCATION: Section 02, Township 53 South, Range 40 East

4425 West 20^th Avenue, Hialeah, Florida

Board of Trustees

Agenda - May 15, 2001

Page Thirteen

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Item 7, cont.

CONSIDERATION: $4,025,000 to be deposited in the Florida Department of Correction's Grants and Donations Trust Fund.

STAFF REMARKS: On April 10, 2001, the Board of Trustees approved without objection, staff's recommendation to reject all current bids, and to proceed with the sale of the Glenbeigh Hospital in accordance with the provisions of section 18-2.020, F.A.C.

Chapter 2000-166, Laws of Florida, provides the Department of Corrections (DOC), with approval of a majority of the Board of Trustees, may sell, trade, exchange or otherwise dispose of the Glenbeigh Hospital property, and for the proceeds to be directed to DOC's Grants and Donations Trust Fund, and subject to specific appropriation, to use the proceeds to acquire, construct, equip, maintain, or improve DOC's correctional facilities.

As set forth in section 18-2.020(2)(b), F.A.C., "Disposal of surplus land shall be competitively bid except that parcels five acres or less in size or with a market value of $100,000 or less may be sold by any reasonable means, including open or exclusive listing with real estate sales services, competitive bid, auction, and negotiated direct sales." In order to expedite the sale of the property prior to the expiration of the proviso language on June 30, 2001, and since the property was previously marketed extensively and under five acres, staff marketed the property by accepting offers and negotiating with interested parties. The information packages were mailed on April 18, 2001, to 16 prospective purchasers, via overnight delivery. The offers were due 11:00 AM, April 27, 2001.

Listed below are all offers received in order of the amounts received:

Florida National College, Inc., is the only respondent that met all the terms and conditions specified in the Division of State Lands' contract.

(See Attachment 7, Pages 1-24)

RECOMMEND APPROVAL OF THE OFFER RECEIVED BY FLORIDA NATIONAL

COLLEGE, INC. IN THE AMOUNT OF $4,025,000

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Item 8 Springs Protection Policy/Direction to Initiate Rulemaking to Amend Chapter 18-21, F.A.C.

DEFERRED FROM MARCH 29, 2001 AGENDA

SUBSTANTIALLY REWRITTEN

REQUEST: Consideration of (1) a policy recognizing the value of public acquisition of private lands surrounding sovereignty springs and spring runs; and (2) direction to staff to initiate rulemaking to amend chapter 18-21, F.A.C., to establish management policies, standards, and criteria when reviewing requests for authorization of activities at sovereignty

Board of Trustees

Agenda - May 15, 2001

Page Fourteen

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Item 8, cont.

springs and spring runs, and to establish fees for structures and water-oriented, revenue-generating/income-related activities at these springs.

APPLICANT: Department of Environmental Protection (DEP)

LOCATION: Statewide

STAFF REMARKS: DEP is requesting that the Board of Trustees consider a Springs Protection Policy regarding:

1. Acknowledging the need for acquisition of private lands surrounding sovereignty springs and spring runs; and

Amendment of chapter 18-21, F.A.C., regarding the establishment of management polices, standards, and criteria to be considered for requests for activities at sovereignty springs and spring runs, and the assessment of lease fees for water-oriented, revenue-generating/income-related structures and activities at sovereignty springs and spring runs.

Pursuant to section 253.001, F.S., all lands, including submerged lands, held in the name of the Board of Trustees are to be held in trust for the use and benefit of the people of the state. This is to be accomplished by conserving and protecting the state's natural resources, including the scenic beauty of those resources. Conserving and protecting the natural resources on or over submerged lands requires the Board of Trustees to consider and balance a wide variety of public uses (e.g., navigation, fishing, and recreation) against sometimes-conflicting private uses on riparian private property. The Board of Trustees has adopted rules (chapters 18-18, 18-20, and 18-21, F.A.C.) establishing criteria for authorizing structures and activities on sovereignty submerged lands. The criteria contained in the Board of Trustees' rules were adopted for the purpose of balancing public uses against private uses; however, no specific criteria have been adopted for activities and structures at Florida's sovereignty springs and spring runs.

Florida's springs have long been recognized as a unique public trust resource from which riparian private property owners may also benefit, provided such benefit is not detrimental to the public trust resources. Considering this need to balance competing public and private uses at sovereignty springs, DEP staff has determined that the Board of Trustees should consider a policy acknowledging the need for acquisition of private lands surrounding sovereignty springs and spring runs, and adopting specific measures to ensure conservation and protection of sovereignty springs and fees for water-oriented, revenue-generating/income-related structures and activities at sovereignty springs.

Development of this proposed policy was further prompted by the Springs Initiative contained in Governor Jeb Bush's 2001 recommended state budget.

Background

The Springs Initiative contained in Governor Bush's recommended 2001 budget includes the appropriation of $2,535,000 to DEP for the protection and restoration of springs. The proposed funding is specifically recommended to provide for additional water quality monitoring and scientific information, and development and implementation of protective measures at springs.

Board of Trustees

Agenda - May 15, 2001

Page Fifteen

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Item 8, cont.

The impetus for the Springs Initiative is the final report and recommendations of the Florida Springs Task Force (Task Force). The Task Force consisted of sixteen representatives from federal, state, and regional agencies, universities, and the private sector, and was created to review environmental, social, and economic issues associated with Florida's springs and to recommend strategies for the protection, enhancement, preservation, and restoration of Florida's springs. The Task Force met monthly from September 1999 to September 2000, and recently produced a final report containing strategies and action steps for public outreach, scientific monitoring, management, regulation, and funding of these initiatives.

Considering the current uses of springs and proposed future developments around springs, together with the Task Force's report and the Springs Initiative, DEP staff has determined that additional guidance from the Board of Trustees is needed regarding the management, protection, and fees for water-oriented, revenue-generating/income-related activities at sovereignty springs and spring runs.

Measures for the Protection of Sovereignty Springs

In November 2000, the Florida Springs Task Force produced a final report containing strategies for public outreach, information, management, regulation, and recommendations for funding the strategies to ensure the protection and restoration of Florida's sovereignty springs. To implement the strategies outlined in the Task Force's report, a number of individual action steps were developed. The Task Force envisioned that many of these action steps would involve cooperative efforts between public agencies and private entities.

For those activities at sovereignty springs for which authorization is needed, DEP staff has determined that some incremental environmental benefits consistent with the Task Force's recommendations can be achieved by working collaboratively with the riparian land owners to protect the environmental quality of the springs and spring runs. To that end, DEP staff has developed the following criteria to be considered when reviewing requests for authorization of activities at sovereignty springs. Staff proposes to add all of the below criteria as specific conditions to section 18-21.004, F.A.C, Management Policies, Standards, and Criteria:

Whether the activity for which authorization is sought will involve the deposition of sand within or adjacent to the spring or spring run. The deposition of sand within or on slopes adjacent to springs is likely to create an adverse environmental impact;

Whether the activity for which authorization is sought may lead to the removal or trampling of upland vegetation by humans or livestock causing shoreline erosion, sedimentation, or turbidity on slopes draining into the spring and spring run. An upland management plan should be developed by the riparian land owner that minimizes impacts to vegetation surrounding the spring and spring run;

Whether the activity for which authorization is sought will involve the removal or control of native aquatic plants within the spring or spring run. Healthy native aquatic vegetation is essential to the health and viability of springs and spring runs. Removal or damage from trampling or boat propellers of native aquatic vegetation within the spring or spring run is discouraged;

Whether the activity will involve proposed modifications of the spring vents or other internal physical features of the spring that would adversely affect the spring and spring run;

Board of Trustees

Agenda - May 15, 2001

Page Sixteen

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Item 8, cont.

Whether the upland riparian land owner seeking authorization has a management plan in place that includes eliminating the application of fertilizers, pesticides, or other products that may degrade water quality within the spring or spring run. Such activities are discouraged on slopes draining into or within 100 yards of the spring and spring run;

Whether the activity for which authorization is sought may lead to requests for withdrawals of water from the spring vent or nearby caves resulting in an unacceptable reduction in the volume of discharge from the spring; and

Whether the activity for which authorization is sought may lead to the installation of septic tanks or other wastewater facilities (including drainfields) on slopes draining into or within 100 yards of the spring and spring run.

It is anticipated that the specific conditions proposed to be added to section 18-21.004, F.A.C., will be included, as appropriate, in new authorizations for activities at sovereignty springs issued by the Board of Trustees or, when delegated, by staff. When authorizations for existing uses are being reviewed for renewal, the new conditions will be included in the renewals.

In addition, DEP staff will also work collaboratively with the adjacent property owners in the planning and implementation of projects developed for the protection, enhancement, preservation, and restoration of springs and spring runs, and in the development and implementation of educational programs for visitors and customers regarding the environmental and economic value of springs and the avoidance of adverse impacts to springs and spring runs.

Fees for Revenue-Generating/Income-Related Activities

Section 253.03(7), F.S., empowers the Board of Trustees to administer all state-owned lands and to adopt administrative rules to implement the provisions of the statute. Section 18-21.004(1)(c), F.A.C., provides that "equitable compensation shall be required for leases and easements which generate revenues, monies or profits for the user or that limit or preempt general public use." Section 18-21.005(1)(b)2, F.A.C., specifies that a lease is required for revenue-generating/income-related activities. Section 18-21.011(1)(b)6, F.A.C., allows DEP to negotiate an annual lease fee for non-water dependent uses considering the appraised market rental value of the riparian uplands and the enhanced property value, benefits, or profit gained by the owner if the proposed authorization is approved; however, there is no such rule for negotiating lease fees for water-oriented uses. Staff proposes to amend section 18-21.011, F.A.C., to establish fees for structures and water-oriented, revenue-generating/income-related activities at springs and spring runs. Grandfathering of existing fees for existing uses will be considered during rulemaking.

PROPOSAL

Acknowledge a policy recognizing the need for and value of public acquisition of private lands surrounding sovereignty springs and spring runs, including Second and Third Magnitude Springs. DEP has already begun efforts to acquire lands surrounding First Magnitude Springs as part if its acquisition program. The Florida First Magnitude Springs Project, which is a recommendation to purchase lands surrounding First Magnitude Springs, is on the Florida Forever List recommended for approval on this agenda. The Task Force recommended that further acquisition efforts should

Board of Trustees

Agenda - May 15, 2001

Page Seventeen

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Item 8, cont.

target lands surrounding Second and Third Magnitude Springs and spring runs where those springs have been identified as needing additional protection and restoration.

Initiate rulemaking to incorporate the standards and criteria into rule and to modify how lease fees are determined for revenue-generating/income-related activities at sovereignty springs. Currently, section 18-21.011, F.A.C., requires a lease with lease fees assessed at the greater of the minimum annual lease fee or the per square foot lease rate. Staff should consider modifying the fee to also include the greater of either a certain percentage of the revenues generated (as required for marinas) or a negotiated fee based on the upland property value and the enhanced property value, benefit, or profit gained by the owner.

If approved, staff will publish a notice of proposed rule development regarding incorporating specific standards and criteria for authorizing activities at sovereignty springs and amending the method of assessing lease fees. The notice will include an opportunity for public comment and public workshop. Additionally, staff will continue to look for and consider alternative or additional methods for protecting, enhancing, preserving, and restoring the sovereignty springs of Florida.

(See Attachment 8, Pages 1-2)

RECOMMEND APPROVAL

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