Arizona State Land Department annual report 2001-2002 |
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Message to the Governor ............................................................................................. Preface Mission Statement & Agency Goals ............................................................................ Preface Fact Sheet & Land Ownership in Arizona .............................................................................. 1 Historical Overview ................................................................................................................. 3 Permanent Fund .................................................................................................................... 5 Expendable Revenue ............................................................................................................. 6 Agency Highlights ................................................................................................................. 7 Department Organization ....................................................................................................... 9 Division Highlights Natural Resources ........................................................................................................ 10 Real Estate ................................................................................................................... 13 Land Information, Title, and Transfer .............................................................................. 17 Board of Appeals ........................................................................................................... 20 Fire Management .......................................................................................................... 21 Administration and Resource Analysis .......................................................................... 23 Beneficiary Summary Determination of State Trust Land Location ................................................................... 27 Common Schools Grant ................................................................................................ 29 Legislative, Executive, and Judicial Buildings ................................................................ 31 State Hospital Grant ..................................................................................................... 32 Miners Hospital ............................................................................................................ 33 State Charitable, Penal, and Reformatory ...................................................................... 34 Penitentiary Grant ......................................................................................................... 35 Normal Schools Grant ................................................................................................... 36 Agricultural and Mechanical Colleges ............................................................................ 37 Military Institutes Grant ................................................................................................. 38 School of Mines Grant ................................................................................................... 39 University Land Code .................................................................................................... 40 University of Arizona 1881 Grant (Act of 2-18-1881) ...................................................... 41 School for the Deaf and Blind Grant .............................................................................. 42 Financial Schedules Rental Acreage and Receipts ........................................................................................ 43 Receipts by Category .................................................................................................... 44 Treasurers Formula Distribution .................................................................................... 45 State Trust Land Acreage by Beneficiary ...................................................................... 46 Auctions of Leases with & without the Preferred Right to Match the Highest Bid ........... 47 Trust Management Maps Surface Management Responsibility ............................................................................. 48 State Trust Land Beneficiary Distribution ....................................................................... 49 Please visit our home page at www.land.state.az.us.
Preface
ARIZONA STATE LAND DEPARTMENT ANNUAL REPORT 2001-2002
Michael E. Anable Arizona State Land Commissioner
September 1, 2002 The Honorable Jane Dee Hull Governor of Arizona 1700 W. Washington Street Phoenix, Arizona 85007 Dear Governor Hull: The State Land Departments annual report for fiscal year 2001-2002 is submitted to you as required by A.R.S. 37-132. The report contains a summary of the Departments management activities and revenue production during the fiscal year. Fiscal year 2001-2002 was an extremely productive one for the Land Department, and it was another record year for State Trust land revenues in many areas. First, the Sales Section held 28 successful land sale auctions during FY 2001-2002, resulting in a total selling price of approximately $128 million. Of the total, $26.6 million was from cash sales. The balance of just over $101.2 million will be carried on terms by the Department at an average interest rate of 9.86% for an average term of 10 years. This year the Department generated a record $35.0 million in expendable revenue that was sent to beneficiaries for their immediate use. Records were also set in several areas of expendable revenues: sales interest, $9.9 million; rights of way, $5.2 million; agriculture, $3.2 million; and special land use permits, $1.9 million. The $154.7 million revenue generated this year by the Trust has been allocated as follows: $56.0 million from the sale of land and minerals was deposited into the Trust Permanent Fund, increasing the Fund to $1,072,134,000; the public schools and institutions received $35.0 million from land rents and interest income as well as $59.4 million from the Treasurers formula distributions; the Treasurers Office also received $.3 million in commercial prepayments that the Land Department will receive back over time as expendable revenue for the beneficiaries; and a record $4.0 million was deposited in the General Fund. It is significant that these revenues were created during a year of tremendous challenges on national, State and local levels. Foreign attacks, recessionary pressures, and budget constraints had their impact on the market. That being said, the Department continued to make excellent progress due to the Trusts strategically located land assets and also due to the Departments progressive approach to land management techniques. Advance land planning and innovative methods of real estate dispositions, for example, contributed to a record single sale of $66.3 million for a 780-acre parcel of Trust land in the Scottsdale area. In addition, a participation agreement attached to the sale will allow the Trust to participate in future revenues as individual homes are sold by the developer. Also worth noting are the types of ground leases the Department has continued to develop. A lease, for example, for a 186-acre mixed-use parcel in north Phoenix that was auctioned during the year is expected to generate approximately $535 million in expendable revenues during its term. Also important were the contributions from other areas within the Land Department. The Forestry and Fire Management Division continued to work aggressively in their protection of forested areas and communities. Their training, coordination, and fire-fighting efforts contributed greatly to the early containment of a number of serious fires. The Department continued to provide for new school sites through ground leases under the Student First Program. Conceptual planning was accomplished for 128,000 acres of Trust land under the Growing Smarter mandate, while Engineering and other support functions continued to provide for enhancement of land values and timely dispositions. The Natural Resources Division generated $10 million in revenue and continued to effectively manage its agricultural, grazing, mineral, water, environmental, and cultural resource Preface
MESSAGE TO THE GOVERNOR
A Written Report to Governor Jane Dee Hull by the Arizona State Land Commissioner
Jane Dee Hull Governor State of Arizona
programs. Strong conservation efforts continued under the Arizona Preserve Initiative, and a total of 37,700 acres have now been reclassified as suitable for conservation under the program. Also, 880 acres of Trust land were sold for open space under the matching grant program during the year. The Department also continued to significantly improve its efficiency and productivity. A major redesign of the Departments Website, for example, provides for much more comprehensive information on the Agency. It also provides for the addition and updating of upcoming sales and leases, which has proven to be an extremely valuable marketing and informational tool. The beneficiaries, especially the schools, have given very positive feedback on the easy accessibility to Department information and activities that are of interest to them. The Agency has also developed a Business Continuity Plan and has implemented a Disaster Recovery Server that is located offsite. With these implementations, the Department will be able to continue its critical business functions within 24 hours if a disaster occurs. The Department has received a clean audit from the Legislative Office of the Auditor General for the fifth year in a row. This is especially significant considering the volume and dollar value associated with the Departments transactions. For example, 1,600 new applications were processed during the fiscal year, and almost 1,400 pending applications were finalized. The Board of Appeals, which serves as an Administrative Review Board for the Department, continued its important work in its review of commercial leases, land sales, and rights-of-way appraisals. Also important is the Departments continued strengthening of its working relationship with the leadership of the education community. This relationship with the Land Trusts primary beneficiary has resulted in strong advocacy for the Department in furtherance of its Trust mission. This has been particularly pivotal in efforts to ensure that the value of the Trust, now and in the future, remains protected in the face of efforts to reach a consensus in the ongoing discussions regarding Land Trust law revision. As evidenced by this past years results, the Department has remained focused and committed to its important mission on behalf of the Trust beneficiaries. Through sound and responsible land management strategies, the Department will continue to meet its challenges in providing for the State Trust assets. Sincerely,
AGENCY GOALS
To implement a progressive asset management process, to improve the q u a l i t y and efficiency of the Departments decision making, and to meet the requirements of the Growi n g Smarter and Growing Smarter Plus Acts. To enhance revenue production. To improve efficiency in processing revenue production activities. To meet the growing demands for fire and forestry management programs on State Trust and private lands, especially in the wildland/urban interface. To incorporate environmental protection into the Departments management actions to enhance the future productivity of the Trusts land and assets. To continue an effective land conservation of appropriate State lands while ensuring continued economic benefits to the Trust. To improve the availability of information and to increase the analytical capabilities of the Agency. To continue to develop and implement m e a s u r e s to improve internal and external customer service. To improve internal and external communication.
Michael E. Anable State Land Commissioner
LAND DEPARTMENT MISSION STATEMENT
To manage State Trust lands and resources to enhance value and optimize economic return for the Trust beneficiaries, consistent with sound stewardship, conservation, and business management principles supporting socioeconomic goals for citizens here today and generations yet to come. To manage and provide support for resource conservation programs for the well-being of the public and the States natural environment.
Preface
MISSION To manage State Trust lands and resources to enhance value and optimize economic return for the Trust beneficiaries, consistent with sound s t e w a r d s h i p , conservation, and business management principles supporting socioeconomic goals for citizens here today and generations yet to come. To manage and provide support for resource conservation programs for the well-being of the public and the States natural environment. ORGANIZATION AND BUDGET Revenues derived from lands managed by the State Land Department benefit numerous educational, health, and penal institutions. These beneficiaries have received a portion of the millions of dollars in income that have been earned since the State Land Department was established in 1915. The Department is organized into five major Divisions: Administration and Resource Analysis; Land Information, Title, and Transfer; Real Estate; Natural Resources; and Fire Management. In addition to these Divisions, a fivemember Board of Appeals approves all sales and commercial leases for State lands. The FY 2002 General Fund budget was $14,107,695 with 187 positions. FUNDS The Department has a fiduciary responsibility to maximize the income from the sale and use of Trust lands and their products. Funds derived from land transactions are deposited into either a Permanent Fund or classified as Expendable Revenue. Permanent Fund revenues come from the sale of land or royalties from natural products of the land. These funds are not expendable for any purpose; rather, they are invested by the State Treasurer in stocks, bonds, and other
STATE LAND DEPARTMENT FACT SHEET
interest-bearing securities. Expendable Revenue includes lease revenue from Trust land leases and permits, interest from sales contracts, and treasurers formula distribution on Permanent Fund investments. Expendable Revenue is available to beneficiaries to use directly for their operations. REVENUES During the first 65 years of Arizonas statehood, its economy was focused on natural resources, and the Land
Departments program was primarily the management of rural lands and natural resources livestock grazing, agriculture, and mineral production. As urban areas grew and new opportunities arose, the Land Departments program shifted to urban land and commercial development. The dramatic increases in revenues during the last 20 years, reflect this change in emphasis.
LAND OWNERSHIP IN ARIZONA The State of Arizona contains an estimated 72,931,000 acres, or about 113,417 square miles, making it the sixth largest state in the United States. The surface land ownership in Arizona can be classified in four basic categories.
42.1 %
Fe de ra l Ind ia n Trust P riva te S tate Trust
State Land Commissioner
Michael E. Anable
Deputy State Land Commissioner
27.3 % 12.8 % 17.8 %
James L. Adams
The percentages are estimates derived from digitized map data. The category called Private is overestimated due to the inclusion of small amounts of land owned by local, State, and Federal agencies.
Preface 1
FY 2002 REVENUES
BY BENEFICIARY
ANNUAL REVENUES
COMPARISON: FY 1982 AND FY 2002
FY 1982 % FY 2002 INCREASE $3,980,132.5 0 $34,982,201.11 $56,006,521.62 $328,041.00 $7,250.00 $95,304,146.23 641.5% 199.6% 845.8% N/A N/A 425.6% TOTAL EXPENDABLE RECEIPTS PERMANENT FUND RECEIPTS Land Department General Fund $5 36,772 Leases & Sales Contract Interest $11,674,888 Permanent Commercial Prepayment School Leases Total Land Department State $5,921,829 $0 $0 $18,133,489
BENEFICIARIES
TRUST ACRES
STATE LAND EXPENDABLE EARNINGS
TREASURERS FORMULA DISTRIBUTION
Common Schools (Includes County Bonds) Legislative, Executive, & Judicial Buildings State Hospital Miners Hospital (Two Grants) State Charitable and Penal Institutions Penitentiaries Normal Schools Agricultural and Mechanical Colleges Military Institutes School of Mines University Land Code University of Arizona (Act of 2-18-1881) School for the Deaf and Blind TOTAL
8,102,553
$31,103,994.90
$54,781,906.00
$85,885,900.90
$46,747,852.92
64,257 71,249 95,458
$92,354.23 $290,692.94 $1,172,056.98
$366,999.00 $99,864.00 $307,779.00
$459,353.23 $390,556.94 $1,479,835.98
$583,932.10 $349,501.99 $619,311.16
Treasurer
Treasurers Formula Distributions Grand Total Revenue General Fund Expendable Permanent Commercial Prepayment Grand Total
$14,020,264 $32,15 3,75 3
$5 9,371,443.00 $15 4,675 ,5 89.23
323.5% 381.0%
77,669 76,334 174,798
$560,299.06 $766,566.51 $118,381.49
$891,235.00 $169,813.00 $96,710.00
$1,451,534.06 $936,379.51 $215,091.49
$4,726,523.12 $109,548.69 $343,449.72
Summary $536,772 $25 ,695 ,15 2 $5,921,829 $0 $32,15 3,75 3 $3, 9 8 0 , 1 3 2 . 50 $94,360,894.11 $56,006,521.62 328,041.00 $15 4,675 ,5 89.23 641.5 % 267.2% 845.8% N/A 381.0% 655.4%
124,914 80,168 123,558 138,038
$67,190.46 $113,766.87 $97,152.54 $180,223.10
$444,795.00 $38,530.00 $431,523.00 $454,344.00
$511,985.46 $152,296.87 $528,675.54 $634,567.10
$1,141,174.58 $2,112.72 $58,390.67 $96,520.63
Permanent Fund Growth $141,927,370 $1,072,134,000.00 Revenue Growth Categories
54,602 82,560 9,266,158
$304,523.72 $122,248.31 $34,989,451.11
$1,087,677.00 $200,268.00 $59,371,443.00
$1,392,200.72 $322,516.31 $94,360,894.11
$779,543.37 $448,659.95 $56,006,521.62
Commercial Land and R/W Sales Gr azi ng Agriculture Royalties
$ 1 , 57 9 , 6 50 $2,705,864 $1,426,445 $2,608,336 $2,480,5 66
$10,768,941.03
5 81.7%
$52,631,934.42 1,845.1% $2,540,084.08 $3,234,831.63 $3,303,485 .73 78.1% 24.0% 33.2%
2 Preface
LAND GRANT The Territory of Arizona was established on February 24, 1863, by an Act of Congress. This Act granted sections 16 and 36 of each township for the b e n e f i t of the Common Schools. E n d o w m e n t of public lands for educational purposes was a practice established by the Northwest Ordinance in 1787. Congress quickly recognized the value of the land and the importance of public schools to a developing nation. The State Enabling Act, passed on June 2 0 , 1910, allowed the Territory of Arizona to prepare for statehood. In addition to the previously designated s e c t i o n s of land, the Enabling Act assigned sections 2 and 32 of each township to be held in trust for the Common Schools. The needs of other public institutions were considered by Congress, and through the Enabling Act, more than two million additional acres were allocated for their use.
temporary Land Department of the State. The members were Mulford Wi n s o r, Chairman; Cy Byrne, S e c r e ta r y ; and William A. Moody, m e m b e r. Appointed by Governor
the multitudinous detail attached to the States varied land interests may have constant attention and to prevent irretrievable loss. The State Land Department and the system by which Trust lands were to be managed were established in 1915 by the State Land Code. In compliance with the Enabling Act and the State Constitution, the State Land Code gave the Department authority over all Trust lands and the natural products from these Trust lands. Since the State Land Departments inception, its missions have been to m a n a g e the Land Trust and to m a x i m i z e its revenues for the beneficiaries. All uses of the land must b e n e f i t the Trust, a fact that distinguishes it from the way public land, such as parks or national forests, may be used. While public use of Trust land is not prohibited, it is regulated to e n s u r e protection of the land and reimbursement to the beneficiaries for its use.
HISTORICAL OVERVIEW
The Federal government established State Trust land for the public institutions specified as beneficiaries. The largest beneficiary is the schools (K-12). As a result, the Trust will continue to make a major contribution to the support of these beneficiaries.
George W. P. Hunt, they were charged with assessing, evaluating, and making r e c o m m e n d a t i o n s about the land granted by Congress to the State for t h e Common Schools and other institutions. The Commission was to report back to the Legislature with its findings and conclusions by the end of the second Legislative session. The Commission concluded that Arizona should not sell its Trust land outright, as other states had done. Instead, it should put the lands to their highest and best use. The decision to sell or lease the land should be based upon the potential use of each p a r c e l . The Commission recommended the creation of a permanent State Land Department ... in order that
State Land Commission on south boundary of Santa Teresa division, Crook National Forest. Standing: Senator W.W. Pace Sitting; left to right: W.A. Moody, Forest Ranger J.H. Kirby, Webster, Cy Byrne.
CREATION OF THE LAND DEPARTMENT On May 20, 1912, an act of the First Legislature created the three-member State Land Commission to serve as the
State Land Commission riding Crook National Forest boundary (Graham County). Horseman in foreground is Forest Supervisor Swift. Second Horseman is W.A. Moody. Third Horseman is Cy Byrne.
BENEFICIARIES There are 14 beneficiaries of State Trust land revenues. The Common Schools
Preface 3
is the beneficiary with the largest Trust land acreage, originally receiving about 8 . 4 million acres of land. Other beneficiaries, which originally received a total of about 2.5 million acres, include the University Land Code; Legislative, Executive, and Judiciary Building Fund; P e n i t e n t i a r y Fund; State Hospital; School for the Deaf and Blind; Normal
through public auction to the highest and best bidder. Short-term leases of up to 10 years may be issued without public auction. All lands are to be appraised at fair market value and cannot be disposed of for less than that amount. TRUST REVENUE Revenues earned from Trust land are c l a s s i f i e d as either permanent or expendable. Revenues derived from the sale of State Trust land, the sale of natural products (such as sand, gravel, water, and fuel wood), and royalties from mineral materials are deposited in the Permanent Fund and invested in stocks, bonds, and interest-bearing securities by the State Treasurer. The treasurers formula distribution from this fund is subsequently transferred each y e a r for use by the appropriate beneficiary. All revenues generated from lease rentals are expendable revenue. The beneficiaries may use these funds directly for their operations. The actual expendable revenue accrued each year from the Trust land is derived from the treasurers formula distribution and the
Departments lease rentals. State Trust land management priorities continually evolve to remain efficient in all areas of the Trusts maintenance.
PAST ARIZONA STATE LAND COMMISSIONERS
W.A. Moer
1915-1920
Rudolph Kuchler
1921-1922
Vernon Vaughn
1923-1928
State Land Commission in camp near Fort Grant, Graham County.
Don C. Babbitt
1928-1929
(Universities) Schools; State Charitable, Penal, and Reformatory Institutions; Agricultural and Mechanical Colleges; School of Mines; Military Institutions; University of Arizona (Act of 2-18-1881); and two funds for the Miners Hospital. A 15th beneficiary, County Bonds, was funded by Trust revenues until it was eventually paid. Revenues derived from County Bond lands are now added to the Common Schools grant. ENABLING ACT RESTRICTIONS C e r t a i n restrictions for Trust land management are outlined for the State Land Department by the Enabling Act. These restrictions state that Trust lands cannot be mortgaged or encumbered in any way. Land sales or land leases i n excess of 10 years must be advertised for 10 weeks prior to public auction. After advertising, the sale or long-term lease of the land is awarded
One change that dramatically increased the Departments revenue-generating potential was the passage of the Urban Lands Act in 1981. The Act allows the Department to increase the value of Trust land in urban areas by planning and zoning it in cooperation with the local governments. The Legislature has a l s o expanded the Departments leasing capabilities, making long-term leases of up to 99 years possible for land that either has been planned under the urban planning process, or is rural commercial land.
Howard J. Smith
1931-1934
Charles P. Mullen
1934-1937
William P. Alberts
1937-1941
O.C. Williams
1941-1949
W.W. Lane
1949-1953
Rodger Ernst
1953-1957
Obed M. Lassen
1957-1970
Andrew L. Bettwy
1970-1978
Joe T. Fallini
1978-1982
Robert K. Lane
1983-1987
M. Jean Hassell
1987-1997
J. Dennis Wells
Northern Arizona University c.1913
1997-1999
Preface 4
PERMANENT FUND
Growth in Permanent Fund FY 1982 - FY 2002
1200 1100
1000
The Permanent Fund, which reached $1.072 billion at the end of FY 2002, is made up of revenues earned from the sale of State Trust land and the sale of minerals and natural products such as sand, gravel, water, and fuel wood. The corpus of the fund is invested, not spent. The State Treasurer manages the fund and invests it in stocks, bonds, and other interest-bearing securities. The State Treasurer was given the authority in 1998 to invest a portion of the Permanent Fund in stocks and b o n d s in addition to the annuities already invested. The Permanent Fund earnings are transferred for use b y the beneficiary through the treasurers formula distribution. Income from sales and royalties continues to earn money for the beneficiaries on a permanent basis, in essence replacing the value of Trust lands or resources that were sold or removed. The Permanent Fund ensures that the Trust is not depleted and will continue to provide the beneficiaries with nontax dollars into the future. During the first 65 years of Arizonas statehood, its economy was focused o n natural resources. The Land Departments program was primarily the management of rural lands and natural resources livestock grazing, agriculture, and mineral production. In F Y 1982, the book value of the Permanent Fund stood at $142 million. As urban areas grew and new industries a n d opportunities arose, the Land Departments program shifted to urban land and commercial development. With the passage of the Urban Lands
M a n a g e m e n t Act in 1981, the Department was given new authority a n d direction to plan, zone, and merchandise the urban Trust lands s u r r o u n d i n g the States major population centers. I n addition, several major reform i n i t i a t i v e s were undertaken and staffing levels increased, which enabled more aggressive and effective leasing and sales programs. The impact of these changes is best illustrated by the dramatic growth in the
P e r m a n e n t Fund in the last two d e c a d e s . The book value of the P e r m a n e n t Fund grew from $142 million in FY 1982 to $1.072 billion by the end of FY 2002. T h e table below shows each b e n e f i c i a r y s share of the total Permanent Fund. The chart to the left shows the growth in the Permanent Fund since FY 1982.
BENEFICIARY SHARE OF PERMANENT FUND JUNE 30, 2002
BOOK VALUE MARKET VALUE
Common Schools Legislative, Executive, and Judicial State Hospital Miners Hospital (Two Grants) Penitentiaries Normal Schools Agricultural & Mechanical Colleges Military Institutes School of Mines University Land Code University of Arizona (Act of 2-18-1881) School for the Deaf & Blind TOTAL
$982,851,000 $4,970,000 $3,240,000 $5,355,000 $4,934,000 $1,688,000 $7,109,000 $418,000 $5,169,000 $7,785,000 $18,883,000 $3,181,000 $1,072,134,000
$947,689,000 $4,749,000 $3,295,000 $5,203,000 $25,909,000 $4,783,000 $1,622,000 $6,637,000 $395,000 $4,738,000 $7,543,000 $18,283,000 $3,069,000 $1,033,915,000
900
State Charitable, Penal, and Reformatory $26,551,000
800 700
600
500 400
300
200
100 0
86 82 90 94 98 20 2 0
Preface 5
EXPENDABLE REVENUE BY BENEFICIARY FY 2002
TREASURERS FORMULA DISTRIBUTION LEASE AND SALES CONTRACT INTEREST TOTAL EXPENDABLE REVENUE
BENEFICIARIES Common Schools (Including Lands to Retire County Bonds) Legislative, Executive, and Judicial Buildings State Hospital Miners Hospital (Two Grants)
$54,781,906.00
$31,103,994.90*
$85,885,900.90
$366,999.00 $99,864.00 $307,779.00
$92,354.23 $290,692.94 $1,172,056.98 $560,299.06 $766,566.51 $118,381.49 $67,190.46 $113,766.87 $97,152.54 $180,223.10 $304,523.72 $122,248.31
$459,353.23 $390,556.94 $1,479,835.98 $1,451,534.06 $936,379.51 $215,091.49 $511,985.46 $152,296.87 $528,675.54 $634,567.10 $1,392,200.72 $322,516.31
Expendable revenue totaled $ 9 4 , 3 6 0 , 8 9 4 . 11 in FY 2002 and included lease revenue from Trust land l e a s e s and permits, and interest e a r n i n g s from sales contracts administered by the Department and from the treasurers formula distribution. Expendable revenues are available to the beneficiaries to use for their operations in the same year they are generated. Over the past 20 years more than $1.21 billion in expendable revenue has been transferred to the beneficiaries. This consists of $.36 billion from lease and sales contract i n t e r e s t and $.85 billion from the treasurers formula distribution. As with the Permanent Fund, e x p e n d a b l e revenue has grown dramatically in the last two decades, for the same reasons. The Department h a s taken advantage of the new opportunities arising as urban areas grew and new industries developed. Expendable revenues have increased from $25.7 million in FY 1982 to $94.4 m i l l i o n in FY 2002. The Common Schools is the largest beneficiary and, on average, receives approximately 90 percent of the expendable revenue. The table to the left shows the source of the FY 2002 expendable revenue for each beneficiary, and the expendable revenue chart to the right shows the growth in revenues since FY 1982.
EXPENDABLE REVENUE
State Charitable, Penal, and Reformatory $891,235.00 Penitentiaries Normal Schools Agricultural and Mechanical Colleges Military Institutes School of Mines University Land Code University of Arizona (Act of 2-18-1881) School for the Deaf & Blind $169,813.00 $96,710.00 $444,795.00 $38,530.00 $431,523.00 $454,344.00 $1,087,677.00 $200,268.00
Total Expendable Revenue FY 1982 - FY 2002
10 0
9 0
8 0
7 0
6 0
5 0
4 0
3 0
2 0
1 0
0
84 82 86 88 90 92 94 96 00 98 02
TOTAL
$59,371,443.00 $34,989,451.11
$94,360,894.11
School Leases Treasurers Formula Distribution Rent and Interest
* T h e amount for expendable earnings includes the revenue of $7,250.00 from the school leases in a c c o r d a n c e with ARS 3 7 - 2 2 1 , D .
Preface 6
JUNE 2002 STATE TRUST LAND AUCTIONS EARN NEARLY $100 MILLION FOR PUBLIC EDUCATION In June 2002, three Trust auctions involving just 1,138 acres earned $96,780,000 million for Arizonas public s c h o o l s . Ten percent down payments on these purchases have been received, with the balances to be paid off over the next 10 years with interest at almost 10% per annum. The successful auctions included a 780-acre parcel that is located in north Scottsdale at 104th Street and Bell Road. The parcel was purchased by Edmunds-Toll Construction Company. The successful bid was at the parcels appraised value, which was $66,300,000. A 253acre parcel located north of Jomax Road, east of I-17 and southwest of the CAP canal in Phoenix, was purchased by Hancock MTH Builders. The successful bid was in the amount of $23,380,000. There were a total of 109 competitive bids beginning at the appraised value of $17,641,185. A 105-acre parcel located at the southwest corner of 105th Avenue and Williams Drive in Peoria was purchased by Vincent A. Morano. The successful bid was at the parcels appraised value of $7,100,000. All the principal proceeds from these tremendously lucrative sales will go directly to the public schools portion of the Permanent Fund, while the interest on these sales will be distributed to the schools as it is earned. The total Permanent Fund for all beneficiaries of the State Land Trust is nearly $1.1 billion. It is anticipated that the portion of the Permanent Fund dedicated solely to the public schools will reach $1 billion within FY 2003. C o m m i s s i o n e r Anable said, These auctions are illustrative of the enormous value of State Trust land. This is Arizonas single most valuable asset, and it is just now beginning to realize its potential. It is easy to understand why the education community appropriately recognizes the school land Trusts critical role as a dedicated funding source to our K-12 schools.
AGENCY HIGHLIGHTS
FY 2002 was an excellent year for the Land Department, and tremendous progress was made on many fronts. Following are some of the more notable accomplishments.
STATE COMBATS TRESPASS AND TRASH ON STATE TRUST LAND For FY 2002 the Land Department pursued trespass actions that resulted in the collection of $510,000 in penalties on behalf of the Trusts beneficiaries. During this same period, more than 2,000 citizen and employee volunteer man-hours were spent on 29 clean-up projects. This resulted in the removal from State Trust land of 81 tons of trash, 266 tires, and 30 abandoned vehicles. The Commissioner said, Im especially proud of the dedication it took to achieve these notable accomplishments under very difficult circumstances. We have only very limited staff and resources to pursue trespassers and effect cleanups, yet we are making headway in both of these important areas of trust a u t h o r i t i e s and the help of citizen v o l u n t e e r s on clean-up projects, a difference is being made in the caretaking of this most valuable Trust asset for our public schools. The Commissioner added, People need to remember that the Trust lands are dedicated primarily to Arizonas public schools, and that they may only be u s e d by obtaining the proper authorization and making the necessary payment for the contemplated use. management. With continuing growing cooperation with local law enforcement
7 Preface
FIRE HAZARD REDUCTION IN THE WILDLAND/URBAN INTERFACE The Oak Tree, Mustang, Oversight, Merritt, Center, Ryan, Little, City Hall, Witch, Walker, Carrizo, and Darnell; were all wildland fires that each burned more than 1,000 acres this past summer in Arizona. The Indian Fire forced the evacuation of hundreds of citizens from their houses and burned several homes in the Prescott basin, the Bullock wildfire in the wildland/urban interface. Thinning and o t h e r fuel mitigation treatments of trees have been identified for thousands of acres on State and private lands in the critical wildland/ urban interface. The State Land Department provides coordination and leadership for fire management efforts on State and private lands throughout Arizona. Assistance provided through the Departments cooperative fire and forestry programs help individual landowners and rural communities treat wildland fuels. The Land Department educates homeowners, builders, and community planners about Firewise development techniques. The Department assists rural fire departments with training and equipment for controlling wildfires, and mobilizes fire departm e n t and Federal firefighting resources throughout the State to assist local communit i e s threatened by wildfire. The State Land Department is the lead agency for managing fire and forest health iss u e s on State and private lands in Arizona and has initiated and served as the conduit for several new programs with Federal financial assistance in the last few years to address these critical wildfire issues.
8 Preface
Agency Highlights
EMPLOYEE RECOGNITION PROGRAM
EMPLOYEE OF THE YEAR: Gary Hase 2001 EMPLOYEE OF THE QUARTER: Gary Hase Michele Muench Karl Sieglaff Nancy Garcia Dawn Dillman 3rd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 2001 2001 2001 2002 2002
Fire forced the total evacuation of Mt. Lemmon for weeks, and the Peak Fire forced the evacuation of Pine Lakes in the Hualapai Mountains near Kingman. The Rodeo/ Chediski Fire burned nearly half a million acres and destroyed more than 460 homes in Heber, Overgaard, Linden, Timberland Acres, and Pinedale, and threatened thousands more i n Show Low, Lakeside, Pinetop, and Forest Lakes. The summer of 2002 was t h e worst fire season in Arizona history. The rapid expansion of rural c o m m u n i t i e s and the building of new homes in forest and range lands have e x p o s e d thousands of citizens and their homes to
MERV MASON CUSTOMER SERVICE AWARD: Cameron Hanye Susan Turner Dawn Dillman Sue Russell Catherine Balzano Carol Holtorf Karl Sieglaff 3rd Qtr 4th Qtr 1st Qtr 1st Qtr 2nd Qtr 2nd Qtr 2nd Qtr 2001 2001 2002 2002 2002 2002 2002
ARIZONA STATE LAND DEPARTMENT
ORGANIZATIONAL CHART
Administration & R e s o u r c e Analysis Division
C o m m i s s i o n e r s Office
Conservation A d v i s o r y Committee B o a r d of Appeals U r b a n Land P l a n n i n g Oversight Committee
L a n d Information, Title, & Transfer Division
R e a l Estate Division
F i r e Management Division
N a t u r a l Resources Division
Commissioners Office (602) 542-4621 Administration and Resource Analysis Division (602) 542-4634 Land Information, Title, and Transfer Division (602) 542-4602 Real Estate Division (602) 542-1704 Fire Management Division (602) 255-4059 Natural Resources Division (602) 542-4625
A c c o u n t i n g Section
T i t l e s and Contract Section
S a l e s & Commercial L e a s i n g Section
D e e r Valley Office
N R C D Section
F o r e s t r y / F i r e Fiscal Section
Administrative Procedures & I n f o r m a t i o n Section
Rights-of-Way Section
P h o e n i x District
R a n g e Section
Information Technology Section
P u b l i c Affairs, L e g i s l a t i o n , and Communication Section
R e a l Estate Management Section
F l a g s t a f f District
W a t e r Rights & A g r i c u l t u r e Section
Geographic I n f o r m a t i o n Systems Section
A p p r a i s a l Section L a n d Conservation & T r a n s f e r Section P l a n n i n g Section
Tu c s o n District
Environmental Resources & T r e s p a s s Section
S t a t e Cartographers Office
M i n e r a l s Section
E n g i n e e r i n g Section
U r b a n & Community Forestry
Preface 9
L e a s i n g categories in the Natural Resources Division include grazing, agriculture, mineral, mineral material, exploration, and apiary. Other areas of natural resource administration include water sales, mineral material sales, water rights administration, trespass, recreational permits, environmental contamination, and cultural resources. The following six sections manage the Divisions programs. RANGE SECTION The Range Section administers 1,293 grazing leases covering more than 8.4 million acres and manages State Trust range land. Duties include: developing coordinated management plans; monitoring range land; reviewing land treatment and range improvement projects;
grazing lessees on changes to law, rule, and policy. W ATER RIGHTS & AGRICULTURE SECTION The Water Rights & Agriculture Section was diversified this fiscal year with the addition of the agricultural leasing program and dam safety administration. The agricultural leasing p r o g r a m administers 405 leases covering 175,188 acres and 42 apiary p e r m i t s on 459 sites. The Water R i g h t s program continues the management of the following: surface water rights (including applications, permits, certificates, and registrations), grandfathered groundwater rights, wells, a Central Arizona Project (CAP) allocation of 32,076 acre-feet, and an irrigation Colorado River contract for State Trust lands. Additional Water Rights program responsibilities include: assessing water charges on leases; facilitating public auction water sales; administration of water reporting for Colorado River contracts; and managing the Trusts CAP water allocation. The Section conducts site investigations for the following purposes: leases/permits, i m p r o v e m e n ts , new uses, safety, trespass, location verifications, etc. NATURAL RESOURCE CONSERVATION SECTION The Natural Resource Conservation Section continues to support Natural R e s o u r c e Conservation Districts (NRCDs) which are political subdivisions of the State and admistratively linked to the Land Department. A new conservation district was created last year, bringing the number of districts
served to 32. More than 200 supervisors and advisors address natural resource conservation in their respective districts, covering over 85% of the State and serving more than 5,000 cooperators. The Environmental Special (license) Plate Fund provides monies to the 20 e d u c a t i o n centers organized by NRCDs and distributes competitive grants. The Arizona Advisory Council on Environmental Education sunset occurred June 30, 2002. The fund oversight is now entirely with the Natural Resource Conservation Section. MINERALS SECTION The Minerals Section administers four distinct Statewide leasing programs. During this fiscal year, continued low copper prices resulted in production being curtailed to a 16-year low. Over the next year or two, however, copper p r i c e s are expected to increase.
Division Highlights
NATURAL RESOURCES DIVISION
...administers all natural resource-related leases, Natural Resource Conservation Districts, and any natural resource issue that affects State Trust land.
Division Director Bill Dowdle
Personnel in the Range Section and Water Rights Management Section ensure the long-term viability of State grazing lands and water rights.
ensuring that appropriate laws, rules, and guidelines are followed when range improvements affect protected plants, archaeological resources, and wildlife habitat; processing all grazing-related applications for new leases, renewals, and assignments; representing the Department at administrative hearings; preparing billings for grazing-related rentals and surcharges; and updating
Mineral leases, managed by the Minerals Section, are an important source of revenue for the Trust.
Additional revenues should accrue from the first production of a minimum 1.7 million cubic feet of CO2 gas per day from a gas field located near St. Johns.
Section Managers Jody Latimer, NRCD Stephen Williams, Range Cynthia Stefanovic, Water Rights & Agriculture Chuck Hudson, Environmental Mike Rice, Minerals Ron Romatzke, Urban & Community Forestry
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Division Highlights
FACTS AND FIGURES FY 2002
ACRES NUMBER OF LEASES
Agriculture*
175,188 2,529
405 26 1,293 79 140 190
Mineral Material Grazing Exploration Permits Mineral Oil & Gas
8,397,881 24,505 16,377 323,971
Although base metal performed poorly, the Section has begun to realize the benefits of efforts initiated three years ago. Building upon mineral assessment studies completed in FY 2000, the Section has developed a p r o g r a m for the sustainable development of mineral aggregate resources. The approach has gained attention at the national level and was presented to the National Research C o u n c i l s Committee on Earth Resources in Washington D.C. in 2002. The approach is being considered in the development of a nationwide study, and the Research Council will follow with a r e c o m m e n d a t i o n to the National Academy of Sciences. ENVIRONMENTAL RESOURCES AND TRESPASS SECTION The Environmental Resources and T r e s p a s s Section manages five programs: Trespass Program Investigates and resolves unauthorized and illegal use of State Trust land, and manages the Land Maintenance Fund for clean-up and protection projects. Environmental Contamination Prevention and Remediation Program Provides oversight and manages remediation projects. C u l t u r a l Resources Management Program Coordinates interagency review of proposed revenue-producing Trust land use to ensure compliance with the State Historic Preservation Act.
Recreational Program E n c o m p a s s e s off-highway vehicle m a n a g e m e n t and recreational permitting. The primary goal is to conserve the land asset while providing o p p o r t u n i t i e s for the responsible operation of off-highway vehicles and other recreational pursuits. Access permits are available for individual, family, and group activities. Dust Abatement Program Manages fugitive dust problems on Trust land in Maricopa County from unpaved roads and parking lots and from vehicle use in open spaces. URBAN AND COMMUNITY FORESTRY SECTION The Urban and Community Forestry Section provides technical assistance and grants to Arizona cities and towns, and tree planting assistance to private landowners.
Section staff work closely with the A r i z o n a Community Tree Council, coordinating the Community Challenge Grant Program, the Arizona Arbor Day Foundation poster contest, and the State Arbor Day celebration. The staff a l s o participate in trade shows, consumer education programs, and industry classes and workshops. A r b o r i s t study classes are also coordinated by the staff and the Arizona Community Tree Council, providing training and certification for tree care professionals. Key to the programs success and viability are partnerships with such organizations as the Arizona Nursery Association and Landscape Contractors Association, the States universities and community colleges, and numerous cities and towns.
NUMBER OF REGISTRATIONS AND WATER RIGHTS CLAIMS Stockpond Registrations Certificated Surface Water Rights Well Registrations Adjudication Statements of Claimant Water Right Registrations Grandfathered Groundwater Rights 4,312 99 2,670 7,022 7,424 237
FUTURE GOALS
Encourage lessee stewardship of State Trust range land through coordinated planning activities. Encourage competition in the grazing lease program through annual advertisement of expiring leases. Develop and implement a strategic plan for the sustainable development of mineral wealth. Continue to facilitate the execution of Colorado River contracts with the Bureau of Reclamation. Continue efforts to educate and support law enforcement agencies throughout the State with training opportunities and information to assist in their efforts to provide enforcement of laws on Trust land. Encourage urban forestry through Statewide promotions and educational materials. Provide in-State grant disbursement programs to 10 communities for planting trees.
*Includes Agricultural Use Permits
Preface 11
D I V I S I O N ACCOMPLISHMENTS Produced revenues of $10.2 million. Participated in the development of coordinated resource management plans, monitored existing plans, and produced $2.5 million in revenue from grazing leases. Field inspected all 405 agriculture leases and resolved 17 compliance problems, which generated $102,431 in
Reviewed and commented on 99 rightsof-way applications for native plant and e c o l o g i c a l impacts. Conducted environmental analysis on Arizona P r e s e r v e Initiative applications. Attended numerous meetings of Weed Management Areas. Administered 435 exploration, mining, oil, and gas leases, producing a total of $3.56 million. In addition to lease revenues, indirect income in the amount of $573,000 was generated from miningrelated land uses. C o n d u c t e d 157 water resource evaluations for land applications (land p u r c h a s e s / l e a s e s ) ; reviewed 41 improvement applications. Completed 86 site investigations related to wells/ water facilities, and 47 corrections were made to existing water filings; four wells were capped/abandoned by lessees, 12 wells were capped by ASLD, and six new water filings were submitted. Implemented a new program to achieve c o m p l i a n c e related to dam safety requirements for regulatory structures on State Trust land, which resulted in six dam safety field investigations. Negotiated the last settlement with the H a r q u a h a l a Valley Irrigation and Drainage District over the distribution of HVID CAP buy-out monies. The settlement resulted in the State Trust land beneficiary receiving a payment of $95,026. Reduced outstanding CAP irrigation district assessment delinquencies by $189,471 and collected $146,021 in
reimbursements to the Arizona Federal Reclamation Trust Fund. Designed, initiated, and completed the f i r s t two stages of the multistage analysis of State Trust lands as required by Gila V to support the States claims for Federal reserved water rights. Through 29 clean-up projects, utilizing over 2,004 hours of volunteer time, Section staff coordinated the removal of 81 tons of trash, 266 tires, and 30 abandoned vehicles. Over 3,171 miles of integrated trails were surveyed for management considerations. Staff reviewed 454 land use and disposition actions for cultural resource issues; finalized remediation of 28 hazardous m a t e r i a l s sites; and issued 5,320 individual, family, and group recreation permits. With the assistance of the Information Technology Section, established an intra-agency database for tracking information about parcels of Trust land that have been inspected for cultural resources. Urban and Community Forestry Prog r a m activities resulted in five communities and 12 organizations bei n g awarded 18 grants totaling $114,000; 3,300 individuals attended Certified Arborist training and tree care clinics. Arbor Day 2002 was celebrated throughout the State of Arizona. The educational component of Arbor Day was the elementary school poster contest, which included 450 participating students from 20 schools.
Division Highlights
N ATURAL RESOURCES DIVISION REVENUE PRODUCTION
Lease Rentals Agriculture* Mineral Material Grazing Exploration Permits Geothermal Mineral Oil & Gas TOTAL $3,234,832 $158,886 $2,540,084 $29,137 $0 $8,144 $476,896 $6,447,979 Sale of Products Public Auction Water Sales Lease Water Charges Mineral Royalties Natural Products TOTAL $259,868 $174,904 $510,708 $2,375,154 $3,320,634
The Agricultural Leasing Program manages over 400 state agricultural leases.
a d d i t i o n a l rental revenue. Lease revenue totaled $3.2 million. Field inspected 459 apiary sites on 42 permits plus six compliance problems. Permit revenue totaled $22,950. Participated in 62 Natural Resource Conservation District-related meetings. Provided staff support to the Arizona Association of Conservation Districts and Natural Resources Conservation Service. Assisted in the production of a Backyard Conservation for Arid Lands Video and Education Kit. S u p p o r t e d the Arizona Advisory Council on Environmental Education in a d m i n i s t e r i n g the Environmental Special Plate Fund.
Trespass Revenues Direct Revenue SecondaryLease Revenue TOTAL GRAND TOTAL
*Includes Agricultural Use Permits
$363,488 $146,439 $509,927 $10,278,540
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Division Highlights
SALES AND COMMERCIAL LEASING SECTION The Sales and Commercial Leasing Sections were combined in February 2002 in an effort to better coordinate the disposition of State Trust lands. Thirty-three land auctions were held during FY 2002, resulting in a total selling price of more than $127.8 million. Of the total, $26.6 million was generated from cash sales. The balance of just over $101.2 million will be carried on terms by the Department at an average interest rate of 9.86% for an average term of 10 years. Approximately 5,800 acres of Trust land was sold. Of that, 880 acres were sold for open space under the Arizona Preserve Initiative Program and another 230 acres of open space were located within urban planned parcels sold for residential development in FY 2002. Commercial Leasing produced revenues of $13.4 million during FY 2002. Seven long-term leases were offered at public auction. Six of the seven auctions were successful, resulting in long-term ground leases being issued for three school sites, a corporate office site, a neighborhood commercial center, and a mixed-use development site. Revenue from the six leases will total approximately $610.5 million over the term of the leases. The Department anticipates an additional $3.0 to $4.0 million in lease revenues in FY 2003 due to Arizonas growth pattern within the real estate
market and prime location of commercial Trust properties ready for development. RIGHTS-OF-WAY SECTION The Rights-of-Way Section produced revenues of more than $12.54 million during FY 2002. The Section completed 426 grants for rights-of-ways. The Section grants rights-of-ways to public agencies, utility companies, and private citizens to facilitate development and to accommodate the needs for public roads, power, water, and sewer throughout the State. REAL ESTATE MANAGEMENT SECTION The Real Estate Management Section is a new Section formed in February 2002. Its main purpose is to support and assist the other sections within the Division with management issues. It is responsible for providing information regarding the Real Estate Division to both staff and public; staff training; reporting all real estate transactions and daily business activities to both internal and external entities; preparing and conducting all public auctions; marketing, to include the Web pages for the Real Estate Division; planning, developing, and maintaining the Divisions budget; developing and maintaining of all long-term contracts such as particip a t i o n agreements and long-term leases (including plat approval and issuance of partial patents). APPRAISAL SECTION The Appraisal Section, through staff and contract appraisers, received 375 new
land appraisal requests this fiscal year. The Section completed 408 appraisals and reviewed 158 appraisals. PLANNING SECTION The Planning Section completed drafts of conceptual plans for Gila Bend, Sahuarita, Chino Valley, Prescott, Prescott Valley, Flagstaff, and North Phoenix totaling 128,055 acres. The Section also assisted the Maricopa Association of Governments in its assessment of land uses and transportation systems in the northwest Valley. The Planning Section stepped up its efforts to critique general plan updates throughout the State, while also providing assistance relative to the Verde Valley Open Space Committee, the Prescott Airport Committee, DavisMonthan Air Force Base, the Houghton Road corridor, Flagstaffs Walnut Canyon, and the SE Maricopa/Pinal transportation committee. The Section also processed general plan amendments for the 40th and McDowell development plan, and the Kortsen and Henness development plan. Finally, the Section completed the first phase of a multi-modal transportation plan for the Scottsdale Road Loop 101 intersection and initiated preliminary planning studies for the North Tatum planning area in Phoenix. ENGINEERING SECTION The Section provided engineering and hydrologic support to the Department that included: performing infrastructure, drainage, and environmental assessments; inspecting dam safety in coop-
REAL ESTATE DIVISION
...fostering well-balanced land planning and design while meeting the demand for residential and commercial properties.
Division Director Ron Ruziska Assistant Division Director Mark Hanson
Section Managers Linda Beals, Sales and Commercial Leasing Greg Novak, Rights-of-Way Sandy Jacobs, Real Estate Management Bill Shaffer, Appraisal Gordon Taylor, Planning Ott Chatupron, Engineering
Preface 13
eration with the Department of Water Resources on State Trust land; performing a technical review, giving comments and offering recommendations on applications; the Navigable Streambed program; and the Colorado River ownership and boundary determination program. In the past year the Section accomplished the following: Natural Resource Support: Assisted the Minerals Section with sand and gravel issues on Trust land; cooperated with the Department of Water Resources to bring the Wineglass Ranch Dam in Chino Valley into compliance with State and Federal dam safety standards (this task is ongoing); and assisted the Environmental and Trespass Section in having an illegal drainage structure re-
moved from State Trust land in north Mohave County. Real Estate Support: The Section provided technical support for infrastructure requirements and costs for the disposition of parcels in Desert Ridge and other master planned developments. The Section directed the master drainage studies for Paradise Ridge and obtained 401/404 permits. It is also providing technical review for ongoing flood control on seven projects with the Flood Control District of Maricopa County and with the Pima Flood Control District. Under the Streambed Navigability Program, all the major and minor water courses under former legislative bills FACTS AND FIGURES LAND SOLD FY 2002
ACRES SOLD TOTAL SALES PRICE $127,123,647 $644,400 $127,768,047 TOTAL SALES PRICE
$ 14 0 $ 12 0
I n Millions
have been completed. Revision of these study reports will be undertaken under Senate Bill 1275. In addition, 22 major water courses and other water courses in 15 counties will be revised in the next two years. D I V I S I O N ACCOMPLISHMENTS Created the Real Estate Divisions Web pages for the Land Departments new Website. Development of a training manual for new Real Estate Division employees. Land sales principal generated more than $45.3 million for the Permanent Fund. In addition, expendable revenues were generated in the amount of $9.9
Division Highlights
AVERAGE PRICE PER ACRE $32,5 93 $334
Urban Rural TOTAL ACRES SOLD
3,900.33 1,932.04 5,832.37
The real estate market continues to be strong in Arizona as a result of the explosive population growth throughout the State. To meet the market demand, the Department offered for lease and sale properties within the growth path of the major metropolitan areas. In addition, the Division worked with communities to foster well-balanced land planning and design criteria for urban Trust lands.
AVERAGE PRICE PER ACRE
$ 3 5 ,0 0 0 $ 3 0 ,0 0 0 $ 2 5 ,0 0 0 $ 2 0 ,0 0 0 $ 1 5 ,0 0 0 $ 1 0 ,0 0 0 $ 5, 00 0 $0
$ 10 0 $ 80 $ 60 $ 40
3,900.33
1932.04
$ 20 $0
U rb an R ural
R u ra l Ur ban
R ur al
U rb an
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DESERT RIDGE
A 5,400-Acre Master Planned Community in North Phoenix
PARCEL 8 S e v e n t y - s i x bids were p l a c e d by four different residential developers on a 5 0 0 - a c r e parcel in the Desert Ridge planned comm u n i t y. The highest and best bid of $52.9 million was declared by the auctioneer.
million from land sales interest, and $59.4 million from the treasurers formula distribution, for a total revenue production of $114.6 million. It is interesting to note that in FY 2001 the interest generated from land sales was only $1.7 million. Given the Departments change in emphasis to term sales, the expendable revenue will grow as the Department continues to sell lands on terms. The Division held a record sale for $66.3 million for a 780-acre parcel of State Trust land located at 104th Street and Bell Road in Scottsdale. The parcel sold with a participation agreement attached that will allow the Trust to participate in future revenues as individual homes are sold by the developer. Out of the 33 land auctions held in FY 2 0 0 2 28 were successful and two sparked competitive bidding. Spirited bidding took place on a 253-acre parcel of land within the Valley Vista Development Plan located at 19th Avenue and Jomax Road in north Phoenix. One hundred nine bids were placed over and above the appraised value of $17.7 million, earning an additional $5.7 million for the Trust for a total selling price of $23.4 million. Two interested bidders placed seven bids on a 47-acre parcel located in the Flagstaff area. The competitive bidding earned the Trust an additional $280,000 over the appraised value of $570,000. Worth noting is the 186-acre ground lease for a mixed-use development at the southeast corner of I-17 and Happy Valley Road in Phoenix that was offered at public auction in September 2001.
PARCEL 7 I n FY2001 the Division l e a s e d a 90-acre parcel w i t h i n the Desert Ridge m a s t e r planned commerce park area in north Phoenix. A m e r i c a n Express acquired the lease at auction, which over the term of the lease will earn in excess of $486 million for the Trust.
DESERT RIDGE DISPOSITIONS
Parcel No. 1A & 1B 1C 1D 1E, 1F & 1G 2A 2B 3 4 5 6 7 8 Acres Sold or Leased Sold Leased Leased Leased Leased Sold Sold Sold Sold Sold Leased Sold Use Date Sold/Leased 07/07/93 07/07/93 07/07/93 07/07/93 12/12/95 12/12/95 01/03/96 02/27/96 02/27/96 02/10/98 11/13/00 04/04/01 Revenue
780 180 54 332 106 2 242 23 24 62 91 536
Residential/Golf Resort Golf Marriott Resort Commercial Retail Sumitomo Sitix Utility Pump Station Mayo Hospital Residential Middle School High School American Express Residential
$ 9,360,000 $ 33,200,000 $ 45,800,000 $347,400,000 $ 90,300,000 $ 57,350 $ 12,320,000 $ 1,416,000 $ 1,654,040 $ 2,965,000 $486,000,000 $ 52,900,000
Parcel 3: The Mayo Clinic Hospital
15 Preface
This lease is expected to generate over $534.7 million for the Trust over the 99year lease term. A new automated modeling valuation (AMV) system was completed this fiscal year and is now being used by staff appraisers to produce valuations. This system has helped expedite appraisals needed for rights-of-way and shortterm leases. The average time for the Division to complete an appraisal has been re-
duced by approximately 10% from the previous year. The Division completed conceptual plans totaling 128,055 acres for urban Trust lands in Maricopa, Pima, Yavapai, and Coconino counties. Since the beginning of the Growing Smarter program the Division has conceptually planned a total of 416,643 acres. In addition General Plan amendments were processed for the 40th Street and McDowell Development Plan, and the
Kortsen and Henness Development Plan. Annexations were processed for the cities of Marana, Prescott, and Kingman that were subsequently approved by the Selection Board. The Division continues its involvement with cities and counties to safeguard the interests of the Trust by participating in planning committees, sitting committees, and stakeholder groups.
Division Highlights
PLANNING Completed conceptual plans for: Gila Bend Chino Valley, Prescott, and Prescott Valley Flagstaff Sahuarita Phoenix Participated in: MAG continuing issues SE/Maricopa/Pinal Transportation Committees Gateway and Desert View Village Planning Committees Prescott Airport Plan Verde Valley Open Space Committee Flagstaffs Walnut Canyon Plan Ed Fox Group Committee Phoenixs Desert View Village Design Subcommittee ENGINEERING Under Senate Bill 1275, provided technical evidence for the determination of navigability of watercourses in the State. Continued to provide technical and expert witness services for litigation cases. Assisted in the disposition of urban land in Camino a Lago (Peoria) by providing an infrastructure assessment. Completed the 401/404 permit process for Paradise Ridge.
FUTURE GOALS
Offer at public auction Trust lands valued at over $190 million in FY 2003 at terms favorable to the Trust. Emphasize sale and long-term commercial leasing efforts in the urban areas. C o n t i n u e to offer at public auction Trust lands for conservation purposes under the Arizona Preserve Initiative Program. Emphasize participation sales and long-term commercial leases. I m p r o v e the automated valuation modeling system production rate. Continue to produce appraisals and consulting services in a timely manner. Develop a strategy to reduce the fees paid for contract appraisals. C o o r d i n a t e the planning and siting of power lines in developing areas earlier in the process to ensure Trust lands are not being adversely affected. Reevaluate the rent schedule used for all rights-of-ways, c o m m u n i c a t i o n sites, and advertising sign permits to ensure market rents are being achieved. C o o r d i n a t e and integrate all State planning and engineering issues with city/town general plans and county comprehensive plans. Continue the preparation of conceptual plans for Urban Trust lands as mandated by Growing Smarter. Continue working with communities on annexation issues and safeguarding the interest of the Trust. Complete the Agencys Five Year Plan. Continue to work with communities on General Plan issues and zoning issues to protect the long-term interest of the land as well as to enhance the market utility of the land. C o n t i n u e to focus on the planning, engineering, and development of Trust lands that will lead to profitable d i s p o s i t i o n strategies for higher-quality and higherrevenue-producing sales and leases. Coordinate with the Maricopa County Flood Control District and the cities of Phoenix and Scottsdale for a regional solution to the drainage problems in the northern Maricopa County area. Preface 16
Division Highlights
TITLE AND CONTRACTS SECTION (T&C) T h e Title & Contracts Section processed 1,601 new applications, finalized 1,385 pending applications, and researched 5.5 million acres of land associated with the sale, lease, and use of the States Trust and sovereign lands. T&C issued five certificates of purchase, 37 patents, and one partial patent on State Trust lands. T & C researched an additional 1.1 million acres of Trust land involving title issues and special projects. A portion of the research involved assisting the Attorney Generals Office in researching over 670,000 acres of Trust lands within the Little Colorado River Watershed. O n a continuing basis, T&C is responsible for processing, developing, revising, and docketing all surface lease, sale, or use applications. Other r e s p o n s i b i l i t i e s include preparing, drafting, and revising all surface lease, permit, right-of-way documents, as well as ensuring compliance with laws, r u l e s and guidelines of the Land Department. The Title Unit is responsible for all a c q u i s i t i o n and disposition of the States 9.3 million acres of State land, ensuring computer records are current and reflect accurate information. Other r e s p o n s i b i l i t i e s include extensive research and preparation of title reports for all legal actions addressing Trust lands. T & C continues enhancement of thousands of current and historical land acquisition and disposition records,
providing our customers with ease and clarity in which to gather needed land use and ownership information. ADMINISTRATIVE PROCEDURES & INFORMATION SECTION (APIS) T h e Administrative Procedures & Information Section is responsible for: 1 ) coordination of administrative hearings and litigation issues; 2) public records; and 3) cadastral survey of Trust lands.
LAND INFORMATION, TITLE, AND TRANSFER DIVISION
...ensuring the integrity and quality of the States land ownership, public relations, communication, and public records as well as the coordination of applications and preparation of contracts associated with the surface use of the States 9.3 million acres of Trust land. Division Director
of Administrative Hearings (OAH). It was APIS goal to resolve as many of t h e appeals through settlement conferences as possible. As a result, APIS resolved 20 appeals (83%) through settlement conferences, thus saving considerable time and money for the appellant and the Department. M o d i f i c a t i o n s were made in the c u s t o m e r service and employee satisfaction surveys. Actions were taken to improve unfavorable ratings or issues in both areas. The customer service survey form is now easier for customers to read. Favorable customer service
TOTAL ACREAGE 136,122 8,397,881 80,185 498 175,188 240,775 18,275 119 12,892 0 9,061,935 16,377 24,505 2,529 323,971 0 367,382 9,429,317 % OF ACREAGE 1.50 92.68 0.88 0.01 1.93 2.66 0.20 0.00 0.14 0.00 100.00 4.46 6.67 0.69 88.18 0.00 100.00
A P I S coordinated 24 appeals of Departmental decisions with the Office STATE TRUST LAND USES
NO. OF LEASES SURFACE Rights-of-Way Grazing Commercial Commercial School Leases Agriculture Use Permits U.S. Government Homesite Institutional Recreation Subtotal (Leases) SUBSURFACE Mineral Mineral Exploration Mineral Material Oil & Gas U.S. Government Subtotal (Leases) TOTAL LEASES 6,715 1,293 307 6 405 495 158 16 10 70 9,475 140 79 26 190 0 435 9,910 70.87 13.65 3.24 0.06 4.27 5.22 1.67 0.17 0.11 0.74 100.00 32.18 18.16 5.98 43.68 0.00 100.00 % OF LEASES
Richard Oxford
Section Managers Terry Arce, Title & Contracts Rozanna Sedillo, Administrative Procedures & Information Nick Simonetta, Public Affairs, Legislation & Communication Lillian Moodey, Land Conservation & Transfer
Preface 17
ratings have increased from 60% in November 2001 to 85% in June 2002. More detailed employee satisfaction survey results were produced this past y e a r, and they identified specific problem areas for the Department to address. T h e Public Records area is the Departments information and records research center. It provides expertise on an extensive land use database of 9.3 million acres of Trust land. A major role of the Public Records area is to conduct and instruct the public and Departmental staff in land title research procedures and interpretation of title r e c o r d s , both physical and computerized. Issuance of recreational permits played a significant role in the routine public i n q u i r i e s received this year.
Approximately 6,000 permits were issued this fiscal year, as compared to 3,478 for the last fiscal year. CADASTRAL AND SURVEY UNIT The Departments Parcel and Land Mapping System (PALMS) State land d a t a b a s e is maintained by the C a d a s t r a l Unit (Cadastral), a fully computerized land mapping and survey unit. PALMS depicts the current status and availability of State Trust lands. Cadastral resolved 1,495 land legal description issues associated with leases and other land use contracts, and approximately 1,550 new parcels were plotted this year. C a d a s t r a l provided computerized mapping services on several on-going special projects, such as the revision
of Kortsen/Henness, the State Plat 21 Planning Project, and new projects c o n s i s t i n g of the revision of the Valencia-Houghton Roads Planning Project in Pima County. A large array of Colorado River sovereign land maps were produced, depicting the everchanging location of the river banks over time. Various field operations relating to land b o u n d a r i e s and surveys were conducted this past year to assist other Divisions in resolving trespass issues, determining ownership for lease and title discrepancies, and locating landfill areas. LAND CONSERVATION AND TRANSFER SECTION The Land Conservation and Transfer S e c t i o n administers the Arizona Preserve Initiative (API) Program, the S o v e r e i g n Lands Management P r o g r a m , and State-Federal Land M a n a g e m e n t Programs, involving F e d e r a l land condemnations from Congressional actions. API became law in 1996. The law lays out a process by which urban Trust land that meets specific criteria can be petitioned for reclassification as suitable for conservation, and subsequently leased for up to 50 years or sold for c o n s e r v a t i o n purposes at public auction. In 1998, the voters passed P r o p o s i t i o n 303, which included a matching grant program created under the auspices of the State Parks Board for the acquisition of urban State Trust lands for conservation.
Division Highlights
DIVISION FACTS AND FIGURES
The State Land Department manages 9.3 million surface acres of Trust land and 9.0 million acres of subsurface or mineral estate. 97% (9.0 million acres) of the surface is under 9,475 leases and other contracts. 4% (367,000 acres) of the subsurface is under 435 leases and other contracts. Four API petitions for reclassification encompassing approximately 11,835 acres were received. Three API petitions totaling 13,856 acres were reclassified. Two API sales applications that totaled 8 8 1 acres were auctioned, adding $14,568,200 to the Permanent Trust fund.
FUTURE GOALS
Continue the research and input of recently identified missing Federal rightsof-way. Strive to develop and implement innovative methods to improve customer service and employee satisfaction surveys. Complete In-Lieu land selection of 15,230 acres to be added to the Trust inventory in the Fall of 2002. Continue to improve and expand the communications program within the Agency and with the public and private sectors. Continue to improve and expand public information and media relations regarding Trust land purpose and function. Continue to improve and expand the Divisions response to public and staff information requests. Continue to evaluate and administer the conservation potential of qualified parcels of State Trust land for open space to benefit future generations, without compromising the benefits to the Trust beneficiaries.
Preface 18
Division Highlights
The Division is responsible for a variety of administrative land management functions, including: Land title, ownership, and use of 9.3 million acres C o o r d i n a t i o n of processing applications and preparation of contracts for lease and use of Trust surface lands Maintains public records and land database information on 10,000 active contracts L a n d surveys, plat maps, and legal descriptions of land Processing Federal condemnations land
Sovereign land is land that is owned by the State but that is not part of the Trust land granted to Arizona at Statehood. The Trust obligations contained in the Arizona Constitution have no direct rel a t i o n s h i p to the management of sovereign lands. This Section is responsible for three of the four types of sovereign lands: 169 acres of Federal Emergency Management Administration (FEMA) lands, 24 acres of land from other State agencies, and 82 acres of escheat (deeded) lands. PUBLIC AFFAIRS, LEGISLATION & COMMUNICATION SECTION The dramatic growth of the State and its urban areas has increased the need f o r internal as well as external communication. The Department has initiated an active approach toward educating the public/media regarding Trust land revenues as a critical source of funding for Arizonas public schools. The Sections legislative function is r e s p o n s i b l e for maintaining a p r o f e s s i o n a l working relationship b e t w e e n the Department and the L e g i s l a t u r e , and ensuring that the Departments responses to constituent issues and other legislative requests for information are timely, thorough, and accurate. The legislative function further s e r v e s to develop and promote l e g i s l a t i o n that is beneficial to the e f f i c i e n c y of the Departments operations, and to advise the Land Commissioner and Department staff of legislative proposals potentially affecting the Department and its mission.
Through both regular sessions of the 45th Legislature, the Department was greatly successful in accomplishing the passage or other implementation of all o f its offered legislation. These important statutory changes include more clearly and accurately reflecting t h e Fire Management Divisions o p e r a t i o n s as necessitated by the nature and timing of emergencies, modernizing numerous aspects of the f r a m e w o r k for the Departments business operations related to real e s t a t e and minerals functions, coordinating and consolidating various u r b a n land planning statutes, and r e v i s i n g and reworking the States statutory land exchange provisions. The Section was also instrumental in assuring the passage of numerous bills and referenda that would have a highly positive effect on the management of State Trust land, while working to defeat all proposed legislation that would have been detrimental to the school land Trust and its mission. D I V I S I O N ACCOMPLISHMENTS Instrumental in bringing two important public policy Trust land measures before voters on the November 2002 ballot: one giving the State public-to-public land exchange authority that would conserve State Trust land, and the other securing supplemental Trust revenues for public education funding. Developing and strengthening an indepth working relationship with the Trusts public education beneficiaries.
C o m p l e t e d the initial entry of all settlement or agreement documents (KE-56) involving the Department. Reclassified 13,816 acres of State Trust land as suitable for conservation purposes. C r e a t e d new methods and implemented a number of actions to improve customer relations in response to customer service survey results. R e s p o n d e d to 55,000 customer requests for information relating to Trust lands. Transferred title of 11.43 acres of Surplus (FEMA) land to the Town of Camp Verde for the public purpose of the open space and trail system. Prepared and submitted the required State Indemnity Selection Application and advertisement for the In-Lieu Lands owed to the State. Prepared and submitted the required advertisement for Fort Huachuca on the lands to be acquired by the State under t h e authority of the National Authorization Act of 2000. Concluded negotiations and resolved land issues with the Bureau of Land Management in the transfer of the In Lieu Selection and Fort Huachuca Land Exchanges.
P u b l i c relations and media communications Legislative coordination liaison and
C o o r d i n a t i o n of administrative hearings, appeals, and litigation issues Coordinates and processes API petitions and land conservation issues Promulgation of rules and policy development.
19 Preface
The State Land Department Board of Appeals consists of five board members selected by the Governor and confirmed by the Senate for six-year terms. Three members represent the 15 counties in the State, which is divided into three districts. Two members hold positions-at-large. The Board members are as follows: Sanders K. Solot, Tucson, represents the First District, consisting of Pima, Santa Cruz, Cochise, Graham, and Greenlee counties. William R. Gray, Scottsdale, represents the Second District, consisting of Maricopa, Pinal, Gila, Yuma, and La Paz counties. Norman R. Brown, St. Johns, represents the Third District, consisting of Mohave, Yavapai, Coconino, Apache, and Navajo counties. James M. Webb, Phoenix, and Kathleen M. Holmes, Scottsdale, are members-at-large.
A r i z o n a Revised Statute 37-215 requires all land sales and commercial leases to be approved by the Board of A p p e a l s , which also serves as an A d m i n i s t r a t i v e Review Board. Applicants and lessees may appeal to the Board a final decision of the State Land Commissioner that relates to appraisals and classifications. The Board meets once a month unless s p e c i a l circumstances warrant a d d i t i o n a l sessions. Meetings are usually held in Phoenix. This fiscal year, the Board visited Flagstaff to hold m e e t i n g s and to tour various land projects. D u r i n g the fiscal year, the Board a p p r o v e d 45 commercial leases, including eight long-term leases, one for 60 years, one for 65 years, one for 67 years, three for 75 years, and two for 99 years; 96 rights-of-way sales a p p r a i s a l s ; and 34 land sales appraisals, nine of which were urban land sales. The Board denied approval of two land sales, one of which was an Urban Planning Project. Twenty-six new appeals were filed with the Board, with five pending appeals carried forward. Six appeals modified the Commissioners decision. Two appeals sustained the Commissioners decision. 12 appeals were withdrawn and dismissed by the Board. Presently, 11 appeals are still pending.
Division Highlights
BOARD OF APPEALS
REPLACE PICTURE
Board of Appeals meeting on October 11, 2001.
Preface 20
Division Highlights
FIRE MANAGEMENT DIVISION
...preventing and suppressing wildland fires on 9.3 million acres of State Trust land and 13 million acres of private land.
The State Forester (the State Land Commissioner) has the authority to prevent and suppress wildland fires on more than 9 million acres of State Trust land and 13 million acres of private land l o c a t e d outside incorporated municipalities. The Land Departments cadre of professional fire management specialists mobilizes firefighters and equipment to and from all parts of Arizona and other states for fire and non-fire emergencies. The Department maintains cooperative agreements with more than 200 local and rural fire departments, other State and Federal agencies, and private companies to control wildfires on State and private lands. The Department also coordinates the mutual aid activities between the rural fire departments within the State and the cooperating Federal agencies.
products. Management and harvesting a c t i v i t i e s are designed not only to maximize and sustain income from forest products, but also to enhance wildlife, watershed, range, and open s p a c e values. Another prime management concern is reducing the risk of catastrophic wildfires. The agency also manages the Centennial F o r e s t , in close cooperation with Northern Arizona University for research and education related to forest health,
a c r e s of private forest land under management to 1,136,000. More than a thousand acres of State and private lands were treated to reduce hazardous fuels. D I V I S I O N ACCOMPLISHMENTS Training is essential for safe, efficient, and cost-effective fire fighting efforts. The Fire Management Division provided and/or coordinated 36 wildland fire management courses for 168 rural departments this fiscal year. More than 1,100 firefighters were trained in basic w i l d l a n d fire fighting strategy and tactics, fire behavior, urban/wildland interface operations, air operations, and incident command systems. The Division also refurbished and distributed nine excess Federal fire
maintenance of natural forest assets and values, and long-term ecological stewardship objectives. The Land Department also provides technical, educational, and financial assistance to private landowners in the management of their forested lands. Forest Stewardship Plans are written and implemented by natural resource professionals to guide landowners in reducing the of risk of wildfire and insect and disease, protecting soil and water quality, providing timber and other forest products, improving fish and wildlife h a b i t a t , and maintaining the l a n d s c a p e s natural beauty. The Department provided management assistance to 893 landowners during the fiscal year, bringing the number of
Division Director Kirk Rowdabaugh
FOREST MANAGEMENT PROGRAMS State Trust lands include nearly 29,000 acres of ponderosa pine forest near Flagstaff, and approximately 4 million a c r e s of pinyon-juniper and oak woodlands elsewhere. Most of these lands are managed for the sale of forest
Section Managers Dave Behrens, Deer Valley Office Scott Hunt, Phoenix District Kevin Boness, Flagstaff District Brian Lauber, Tucson District Al Hendricks, Foresty Programs
R e f u r b i s h e d Vehicle
Preface 21
e n g i n e s to cooperating rural fire departments. These vehicles are valued at $204,000. Currently, there are 155 refurbished fire fighting vehicles in rural fire departments Statewide. The Department has contracts for 20 heavy trucks for future retrofitting, and these
a l o n g with the equipment already provided to cooperating fire departments are worth nearly $7,500,000. Twentyfour rural fire departments also received three refurbished hand-held radios each; these 72 radios are worth just over $85,000. The Division also secured 38 State Fire A s s i s t a n c e Grants for more than $2,000,000 to assist with developing a n d implementing hazardous fuel reduction plans in communities-at-risk. An additional $709,000 in Volunteer and R u r a l Fire Assistance Grants was d i s t r i b u t e d to assist 66 rural fire d e p a r t m e n t s with training and
Division Highlights
equipment. The Division also p r o c e s s e d orders for rural fire departments for fire fighting supplies and e q u i p m e n t from the U.S. General Services Administration valued at more than $250,000.
FUTURE GOALS
Assist private landowners in the wildland/urban interface t o reduce the risk of loss from wildfire. Educate and encourage rural residents to protect their property from wildfire. Help prepare local fire departments and develop local zoning and fire codes. Mitigate potential losses due to wildland fires in the urban interface. Implement fuel hazard reduction programs on State and private lands in the wildland/urban interface. Reduce the accumulation of natural vegetation and fuels a r o u n d homes and subdivisions in the interface in a cooperative effort with our Federal partners. Provide eight to 10 excess Federal wildland fire trucks to cooperating fire departments each year. T r a i n firefighters from cooperating local rural fire departments in wildland fire suppression strategies and tactics through cooperative programs with the State Fire Marshals Office, other State and Federal agencies, and inhouse courses. Encourage and assist with developing an interagency dispatching system that will make more efficient use of fire suppression resources. Provide assistance to the Department of Emergency and Military Affairs and other State and Federal agencies to prevent and suppress wildfires and manage other non-fire emergencies. Provide prompt cost repayment of expenses incurred for the suppression of wildfires on State-protected lands to cooperating agencies and persons. Providing fire protection to rural Arizona is becoming increasingly more difficult. Much of Arizonas recent p o p u l a t i o n growth and home building activity have occurred in rural and previously undeveloped areas. Decades of wildland fire suppression and historic land use activities have led to increasing fuel accumulations, allowing fires to burn hotter, faster, further, and more frequently. Wildfires are becoming more expensive to suppress and are a greater risk to the States natural resources, its citizens, and their property. The Land Department will continue to be proactive and innovative in meeting its ever-increasing wildland fire management responsibilities. Preface 22
Despite record drought and unprecedented fire potential, 98 percent of all fires were controlled at 100 acres or less. However, fire losses were extraordinary this year; 520 fires burned nearly 40,000 acres on State and private lands. The Agency also supported Federal agencies with another 250 fires, including the Rodeo/Chediski, Bullock, and Indian fires. More than 31,000 citizens were evacuated and 600 of the nearly 23,000 structures threatened by wildfire were lost.
Division Highlights
ADMINISTRATION AND RESOURCE ANALYSIS DIVISION
T h e Administration and Resource Analysis Division is responsible for the a d m i n i s t r a t i v e functions of the D e p a r t m e n t . The Division is also r e s p o n s i b l e for managing the Departments computerized business and administrative systems, managing Geographic Information Systems (GIS) systems, and administering the Arizona Land Resource Information System (ALRIS) and the State Cartographers Office (SCO). T h e business and administrative s y s t e m s are designed to provide automated capabilities for processing data related to ownership, title, sales, and lease transactions, as well as f i n a n c i a l operations and internal accounting for the Department. The ALRIS Program was established by the Legislature to provide a GIS service center for government agencies in Arizona. ALRIS maintains a GIS facility, creates and maintains data layers, provides training, transfers data, and provides technical assistance. T h e SCO was created by the Legislature to provide the framework for a coordinated development of GIS t e c h n o l o g y in Arizona through the development of standards, facilitation of cooperative efforts, and improvement of access to geo-spatial databases. ALRIS and the SCO work closely with the Arizona Geographic Information Council (AGIC) and provide it with technical support. AGIC is a multia g e n c y, multi-government council responsible for determining areas of s t a n d a r d i z a t i o n and facilitating c o o p e r a t i v e data and system
development for GIS. D I V I S I O N ACCOMPLISHMENTS The Division experienced an extremely busy year and has several notable accomplishments in both the fiscal and computer systems areas. DEPARTMENT WEBSITE The Division coordinated the redesign of the Agencys Website. The new Website provides a significant amount of information about the Agency and its activities and provides an interactive map service that allows anyone with access to the Internet to view locations o f Arizona State Trust lands and Federal public lands. A valuable feature f r o m our marketing program is information on upcoming sales and leases. The beneficiaries, especially the schools, have provided very positive feedback on the easy accessibility to Department information and activities that are of interest to them. ACCOUNTING SECTION The Department received a clean financial audit for the fifth consecutive year. This is a significant accomplishment g i v e n the complexity of the Departments financial structure and the fact that close to $100 million in revenue from leases and sales is processed annually. FORESTRY/FIRE FISCAL SECTION The Department received close to $3 million in new Federal funds for fuels treatment projects and other grant projects intended to improve Arizonas capacity to respond to wildland fires. In order to accommodate this additional funding, the Section was required to set
up additional accounting structure and work process. Another challenge the Section faced was the increased workload due to the worst wildland fire year in Arizona history. The Section saw a dramatic increase in accounts payable, payroll transactions, fire cost estimating, and pre-positioning costs. I N F O R M AT I O N SECTION (ITS) TECHNOLOGY
...responsible for the administrative functions of the Department, including the computer information systems.
The Agency has a totally automated W i n d o w s - b a s e d business system (OASIS), programmed in Oracle, which is accessed on desktop PCs. Both Department employees and private sector firms, such as title companies, use the system extensively. The IT Section Manager and the CIO completed the conceptual design for the next major upgrade of the Agencys i n f r a s t r u c t u r e , servers, network b a c k b o n e , Oracle databases, PC hardware, and application software. The Project Information Justification (PIJ) has been submitted to the Government Information Technology Agency (GITA) for review and approval. The major goals of the system upgrade are to expand s y s t e m capacity to deal with the planned additional GIS databases; the conversion of OASIS (Oracle business system) from client server to the Web; the development and implementation of I n t e r n e t - b a s e d applications; the upgrade of the PCs and network to handle the expanded capacity of the GIS applications and data; and the r e p r o g r a m m i n g and conversion of Business System and GIS applications to new versions of Oracle, Arc Info, and Arc View. Converting to browser-based
Division Director Lynn Larson
Section Managers Dave Bee, Accounting Roy Myhlhousen, Forestry/Fire Fiscal Bill Reed, Information Technology Gary Irish, Geographic Information Systems Eugene Trobia, State Cartographers Office
Preface 23
a p p l i c a t i o n s will advance the Governors direction to agencies to improve service to customers through expanding the information and services available to the public and businesses t h r o u g h the Internet. The Internet applications will also greatly expand the ability of Land Department staff to conduct their field work and provide information to lessees in the field. The Parcel and Land Mapping System (PALMS), which is the system that provides access to GIS data, including business system data, has been fully deployed. The Section designed and implemented a Disaster Recovery Server that is
located off site and that will enable the D e p a r t m e n t to continue its critical business functions the next day if an emergency occurs. The system backup procedures were also enhanced. The OASIS business system, all office automation files, and the cadastral databases would all be available on the offsite Disaster Recovery Server. In the event that the Department could not a c c e s s the main office, critical functions such as billing, receiving receipts, work on critical lease and sales projects, auctions, etc. could continue. T h e Section completed several upgrades (including the Corel Suite to
2002), replaced and re-engineered the Uninterrupted Power Supply (UPS), and upgraded color printers and hi-speed business printers. The Section also c o m p l e t e d an upgrade to all applications, software, and hardware for the Drainage Section. STATE CARTOGRAPHERS OFFICE The State Cartographers Office (SCO) hosted over 200 attendees at the AGIC 2002 GIS Conference in Mesa during A u g u s t 2002. The Office has c o o r d i n a t e d the development and dissemination of Digital Ortho Quarter Quads (DOQQs), which cover all of
Division Highlights
GENERAL FUND APPROPRIATION & TRUST REVENUE
2 0 02 2 0 01 2 0 00 1 9 99 1 9 98 1 9 97
FUTURE GOALS
The Forestry/Fire Fiscal Section will review the program to ensure that adequate accounting controls and procurement procedures are in place. As activity and funding for the Fire program grows, it becomes more important to ensure that the Department is in compliance with all State and Federal laws, regulations, and policies. The ITS will implement the conceptual design plan for the s y s t e m upgrade, which will include procurement, engineering, and deployment of a gigabit ethernet backbone; upgrading and migrating to Oracle 9; upgrading to Novell 6; u p g r a d i n g the Novell servers; upgrading to Solaris 9; replacing and upgrading the Sun servers; replacing all desktop PCs and operating systems; reprogramming OASIS applications; building an internal information portal; and implementing Internet applications, including the public counter. The SCO will enhance the GeoServer Website to include local survey control data. The SCO will continue to pursue the use of Websites as a way to improve access to GIS data for public agencies. The SCO is working closely with public safety, emergency response, justice, health, and executive agencies to develop GIS data and applications to address the public safety, health, and welfare needs of Arizona and to c o n t r i b u t e to State Homeland Security. The SCO also continues to coordinate with State, Federal, regional, and local agencies and organizations to develop and improve access to geo-spatial databases in Arizona. The GIS Section will develop a plan for and initiate a major upgrade of the PALMS application during the coming fiscal year. It will also develop additional parcel layers for PALMS. Support for the API and the Growing Smarter project will continue during the coming fiscal year. Many of the data sets developed by these projects will then be incorporated into PALMS for widespread access throughout the Department. The GIS Section will also continue the development of the Internet map server to provide interactive mapping services that show the locations and aspects of State Trust lands that are of interest to the public. In the coming fiscal year, the ALRIS program will continue to distribute spatial databases to customers throughout Arizona. In the upcoming fiscal year, the program will the convert its database documentation to the Federal Geographic Data Committee national standard format.
1 9 96 1 9 95 1 9 94 1 9 93 1 9 92
0 20 40 60 80 100 120 140 160
D ol l a rs (Millio n s )
G e n e ra l F u n d Appropriation T r u st R e v e nu e s
Only the Department of Revenue and the Arizona Lottery generate more revenue than the State Land Department.
24 Preface
Arizona. The DOQQs are available in c o m p r e s s e d format (.ECW) to all agencies of the State. The SCO also developed the GeoServer Website to provide survey control data to surveyors and the GIS community. The SCO c o n t i n u e s to sponsor a National Geodetic Survey State Advisor to assist in the development of geodetic control for use by public agencies in Arizona and the Southwest region. The SCO is also working with State universities t o develop Websites that provide access to GIS data and GIS services for State agencies. The office is also coordinating with AGIC and GITA to develop State GIS data standards and GIS Web services for the public. GEOGRAPHIC INFORMATION SYSTEMS The Geographic Information Systems Section provides GIS products (such as GIS databases, maps, tabular data sets, and GIS software) for assisting Department staff and management with analyzing and managing State Trust lands. This past year the Section completed placement of the PALMS e n t e r p r i s e GIS system on staff d e s k t o p s and conducted training classes in the use of the system for Department staff. Several advanced PALMS classes were also developed and the Section began offering those to Department staff. Many quality and performance enhancements were made to the PALMS system, and several major new capabilities (including the a b i l i t y to access digital aerial p h o t o g r a p h y ) were added to the system.
The Section also continues to provide mapping and analysis support for the Arizona Preserve Initiative and the State-Federal land transfer program. During this past year the GIS Section actively worked with other Department work units and Department consultants to continue developing GIS databases t o support the development of conceptual plans for priority urban State Trust lands as part of the Departments Growing Smarter project. The first conceptual plan for State Trust lands was completed for the Peoria area this past year and inserted into the PALMS a p p l i c a t i o n for access by all Department staff. T h e GIS Section also houses the A L R I S Program, which provides Statewide support for public agencies i n Arizona in the area of GIS t e c h n o l o g y. During the past year, ALRIS distributed 1,628 sets of GIS data (a 25% increase) from its geos p a t i a l data library to program c u s t o m e r s throughout the State, providing benefits to a variety of public agencies and private organizations in Arizona. This past year, ALRIS staff continued to maintain and enhance several of its geo-spatial databases. A major new data set, the 2000 Census Geographic files, was developed and prepared for distribution to GIS users. ALRIS completed initial development and deployment of its first interactive Internet mapping service this past year. This Web-based service allows anyone with access to the Internet to view the locations of Arizona State Trust lands and Federal public lands.
Preface 25
INTERNET MAPPING SERVICES
During this past fiscal year, the Department developed an initial capability to deploy interactive maps over the Internet This new technology, utilizing Web-based map services, allows the public in Arizona, or anyone in the world, to access portions of the Departments GIS data in an interactive manner from their own desktops if they have a connection to the Internet. During this past year, the Department developed and deployed two Internet-based interactive mapping systems. Both systems allow the user to pan and zoom around the maps, add and delete map layers, and obtain information about the features on the maps by pointing and clicking the mouse cursor on the features. Users can select certain geographic features based on their attributes and then zoom the map image to their selected locations. The systems also include capabilities to create simple maps that can be sent to the users home printer. The two systems are described below. ARIZONA LAND OWNERSHIP MAP The Arizona Land Ownership Map provides users access to the locations of State Trust lands and Federal lands throughout Arizona. The users of the system can select common geographic features such as city and county boundaries, roads and streams, and towns to be shown on the map along with the land ownership data. The public land survey system, townships, ranges, and sections can also be shown, giving the user a key locational identifier to help in determining where lands are located. The system provides users a valuable tool to locate State Trust Lands and Federal public lands. Before the deployment of the Arizona Land Ownership Map, users had to purchase paper maps from the Department or from federal agencies to determine where these lands were located. This system can be accessed through the Departments Web page under the Maps button or by entering http://sco.az.gov/ website/arizona in the browsers URL window.
ARIZONA GEOSERVER The Arizona GeoServer is an Internet-based service that provides access to geodetic coordinate control data developed by agencies participating in the Arizona Geographic Information Councils (AGIC) efforts to develop an integrated and shared public land survey system and common sets of geodetic control for integrating GIS databases between various levels of governments in Arizona. The system was created to provide efficient, effective, and timely access to coordinate control data, which is defined here as monumented locations on the ground for which coordinates have been assigned. This definition includes data such as horizontal and vertical geodetic control and can include section corners. Through the use of common geodetic control, public agencies in Arizona will be able to create and manage GIS systems in which data fits together spatially. The GeoServer provides access to such data and is a key component in AGICs strategy to increase GIS data integration and the ability to share commonly needed and used GIS data throughout Arizona. The Arizona GeoServer can be accessed through the AGIC Website maintained by the Land Department at http://www.land.state.az.us/agic/agichome.html or by entering http://sco.az.gov/website/geoserver in the browsers URL window.
ARIZONA LAND OWNERSHIP MAP INTERNET SERVICE
GEOSERVER INTERNET SERVICE
The image above shows how the Arizona Land Ownership Map Service appears within the users Web browser interface. In this view the user utilized the set of map tools on the left side of the image to zoom into the map in the Carefree area. The map image shows the locations of State Trust and other land owners in the area along with the major roads and streets. The map also contains the township, range, and section lines. The right part of the image contains a scrolling legend for the features shown on the map. This image also shows a record listing for a location on the map where the user clicked first on the "identify" tool (the "I" icon on the toolbar) and then clicked on the map. The mapping service then returned a record providing information about that location for the "active" theme, in this case the land ownership theme. The user could use other tools to switch the "active theme" to another theme that appears on the map and obtain information about that theme.
The image above shows how the GeoServer appears within the users Web browser interface. In this view the user is displaying National Geodetic Survey (NGS) control points in the downtown Phoenix area. A legend for the map also appears, and if the user clicks the mouse on the "identify" tool shown above the map and then on one of the displayed points, a record from the point data-base will appear in a listing to the left of the map image window. In this case the name of the point is "Phoenix st capital bldg dome." The PID attribute shown in the record is the NGS point identifier. If the user clicks on the point identifier, then a process is initiated on an NGS server and the NGS point data sheet is displayed in a separate browser window (not shown on this example). Thus the GeoServer provides access to the point locations in a map format and also access to the complete NGS record for that point. The GeoServer also includes an extract capability to allow users to select sets of points and download them to their computers. The download points are in GIS format and contain point locations and associated attribute records that contain a subset of the NGS full record, including the point coordinates in latitude and longitude, date, condition, monument status, and recording agency.
Preface 26
Beneficiary Summary
METHODS OF ACQUISITION Arizona has acquired these lands in four types of transactions:
DETERMINATION OF STATE TRUST LAND LOCATION
1. School Sections in Place: As land surveys were completed by the Federal government, title to four school sections in each township Sections 2, 16, 32, and 36 automatically passed to the State. 2. Indemnity in Lieu Selections: When school section lands were not available to the State because they had been previously claimed by homesteaders or miners or because they fell within a Federal reservation for a national forest, park, or Indian reservation, the State was given the right to select an equal acreage of Federal public domain land as indemnity in lieu of the school sections the State should have received. 3. Quantity Grant Selections: The State selected the specified acreage of Federal lands for the County Bonds and e a c h of the individual institutional Trusts. 4. Land Exchanges: After acquiring title to the Trust lands, the State traded many of the lands for other Federal or private lands of equal value in order to relocate and block up Trust land holdings. The State acquired its School Sections in Place wherever the land surveys placed them. The State chose the lands acquired in the Indemnity in Lieu Selections, Quantity Grant Selections, and Land Exchange processes.
These choices were made by the State Selection Board, which consists of the Governor, State Attorney General, and State Land Commissioner. The Land Commissioner in recent years has been replaced on the Board by the State Treasurer. Most of the selections were made in the 1915-1960 era, with the
selection program being finally completed in 1982. Since the State was precluded by Federal laws from acquiring mineral lands, and since the homesteaders had already acquired most of the potential agricultural lands, the State focused on choosing the best grazing lands. Most of the acreage chosen
Determination of Beneficiaries and Acres
At the time of statehood, Arizona was granted nearly 10.8 million acres to be held in trust for lease and sale to produce revenues for the support of public schools and other public institutions. An 1881 Act had already granted the Territory of Arizona about 60,000 acres for the University of Arizona Grant. A 1929 Act authorized an additional 50,000 acres for the Miners Hospital Grant. This brought the total Trust grants to over 10.9 million acres. These Trust grants are:
Acres *
Common Schools Grant University Grant Legislative, Executive, & Judicial Building Grant Penitentiary Grant State Hospital Grant School for the Deaf & Blind Grant Miners Hospital for Disabled Miners Grant Normal Schools Grant Charitable, Penal, & Reformatory Institutions Grant Agricultural & Mechanical Colleges Grant School of Mines Grant Military Institute Grant County Bond Grant Total *Approximate
8,400,000 200,000 100,000 100,000 100,000 100,000 100,000 200,000 200,000 150,000 150,000 100,000 1,000,000 10,900,000
Preface 27
during the 1915-1960 era was in central and southeastern Arizona, and in the checkerboard land area along the railroad across north-central Arizona. As agriculture developed in Arizona, later selections were made in irrigated areas in the Harquahala Valley and the Gila River Valley. The final selections concentrated on commercial and agricultural lands along the Colorado River. Land exchanges in the 1935-1985 era relocated most of the school section lands out of the western deserts and into areas close to Phoenix and Tucson and into better grazing lands in such areas as western Yavapai County.
east sides of the Tucson metropolitan area is divided amongst the various institutional Trusts. The University of Arizona Trust owns a large amount of timbered land acreage in the Flagstaff area and agricultural lands near Yuma. However, the majority of the acreage in the other individual institutional Trusts are rural grazing lands. Some agricultural potential is located primarily in Cochise County; the Altar Valley of Pima County; the Picacho, Red Rock, Oracle Junction, and Florence areas of Pinal County; the St. Johns and Springerville areas of Apache County; and the checkerboard areas of western Coconino and Yavapai counties. In the 90 years since statehood, the State has disposed of about 1,633,844 acres of Trust lands. A total of 9,266,156 acres of Trust Land remains. Almost all of the lands are under one or more leases for natural resource uses and commercial development purposes. About 87 percent of the Trust lands are in the Common School Grant and approximately 90 percent of the Trust revenues go to that Grant.
is greater than the acreage in each grant because in many cases, there is more than one lease on the same parcel of land. No description is given of the County Bond grant lands, because now that the bonds have been paid, the revenues from these grant lands go into the Common Schools Grant. Included on page 49 of this publication is a map of Arizona with all Trust lands identified by the owning Trust beneficiary.
Beneficiary Summary
LOCATION OF STATE TRUST LAND Most of Arizona Trust lands are currently usable only for livestock grazing purposes. Fortunately, several hundred thousand acres of these grazing lands have become urban lands as Phoenix, Tucson, and other cities and towns have expanded. The Urban Lands Act, passed in 1981, enabled the Trust to capitalize on the large increase that planning and zoning adds to raw land values. Today the Land Departments urban lands lease and sale program is the largest revenue producer for the Trust. Nearly all of the most valuable urban Trust lands around the northern border of the Phoenix metropolitan area and north and west of Tucson are Common Schools Trust lands. The large block of Trust lands on the south and south-
Today, the original school section pattern exists only in a few locations such as the remote Arizona Strip. About three-quarters of the school section acreage were relocated through selections and exchanges that have consolidated the Trust lands into large blocks in Pinal, Pima, Graham, Greenlee, and Cochise counties in central and southeastern Arizona; north and northwest of Phoenix in Maricopa and Yavapai counties; and in the checkerboard railroad grant zone across Mohave, Yavapai, Coconino, Navajo, and Apache counties.
DESCRIPTION OF INDIVIDUAL GRANTS Descriptions of the Trust lands in the individual institutional grants follow. The acreage cited in the different land areas is only approximate. However, the data will give some indication of the income potential of the individual Trust resources. The total acreage of the lease categories listed for each grant
Preface 28
Land Endowment by Township Township = 36 Sections Each Section = 1 Square Mile
Beneficiary Summary
COMMON SCHOOLS GRANT
The Common, or Public, Schools Grant land comprises about 87 percent of the T r u s t land holdings and totals 8,102,553 acres. Most of the Common Schools lands are grazing lands scattered throughout the rural areas of the State. The original four-school-sectionper-township land pattern still exists in a few places like north of the Grand Canyon on the remote Arizona Strip, but most of the Common Schools lands have been relocated and consolidated by land selection and exchanges. The largest concentrations of acreage are:
The Common Schools Trust also holds most of the highest value and developable Trust lands. Included are: Several hundred thousand acres of urban Trust lands in the north Phoenix and Scottsdale areas and around the northern border of the Tucson metropolitan area; More than 100,000 acres of agricultural lands throughout the State;
Lease & Sale Highlights: City of Phoenix API Land Sale 53-106375-35 765.32 Acres $12,245,000 Edmonds-Toll Construction Co. Land Sale Down Payment 53-105241-00 779.96 Acres $6,630,000 BCW INC Mineral Lease 04-103379-00 81.09 Acres $385,960
In the Bagdad, Yarnell, and Wickenburg areas of western Yavapai and Maricopa counties; In the checkerboard land area along Interstate 40 across north-central Arizona and near Kingman, Seligman, Winslow, Holbrook, and St. Johns; Between Florence and Oracle in southeastern Pinal County; Along the San Pedro River Valley between Benson and Winkelman; and In the Klondyke area of southwestern Graham County.
160
Two major copper deposits in the Tucson and San Manuel areas; and Commercial properties along the Colorado River in the Yuma, Ehrenberg, Parker, Lake Havasu City, Topoc, and Bullhead City areas.
TRUST LAND INCOME FY 1982-2002
140
120
100
80
60
40
20
0 83 82 84 85 86 87 88 89 90 91 92 93 94 95 96
Pe rm an e n t Fund Interest
97 98
99 2000
2001 2002
P e rm an e n t Fund Received
R e nt & Interest Received
Preface 29
ACRES AND INCOME FY 2002
SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE SUBSURFACE LEASES Mineral Exploration Permit Mineral Material Oil & Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest Sales Interest School Leases Treasurers Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance 16,038 24,227 9,877 331,264 8,447 389,853 $7,349.95 $26,881.86 $151,286.54 $448,358.28 $0.00 $633,876.63 $73,977.46 $9,901,338.79 $7,250.00 $54,781,906.00 $85,885,900.90 $46,747,852.92 $982,851,000.00 30 Preface ACRES 127,993 22,638 7,395,099 105 126,925 189,410 0 5,406 8,448 0 7,876,024 INCOME $2,228,193.87 $8,749,719.71 $2,161,967.26 $18,830.00 $5,080,409.36 $1,641,407.42 $0.00 $118,036.04 $159,981.99 $329,006.37 $20,487,552.02
Beneficiary Summary
Lease & Sale Highlights:
Arizona Public Service Rights-of-Way 14-106003-00 1.94 Acres $398,885 56th Street AXP Campus LLC Commercial Lease 03-105713-99 90.82 Acres $872,865 Talley Defense Systems Inc. Commercial Lease 03-093792-65 221.65 Acres $472,299
Beneficiary Summary
LEGISLATIVE, EXECUTIVE, AND JUDICIAL BUILDINGS
There are 64,257 acres in the Legislative, Executive, and Judicial Buildings Land Grant. These lands consist of primarily rural grazing lands, with some parcels having agricultural, commercial, and mineral material potential. The largest concentrations of grazing lands are 12,000 acres in the Altar Valley southwest of Tucson; 10,000 acres near Bonita in Graham County; 5,000 acres east of the Picacho Mountains in Pinal County; and 4,000 acres of checkerboard lands west of Seligman in Yavapai County. Other holdings are located as follows: 4,000 acres near Willcox in Cochise County; 1,000 acres near Marana in Pima County; 3,500 acres near Florence in Pinal County; 4,000 acres near Mohawk in the Gila River Valley of Yuma County; and 4,000 acres near Gleason in Cochise County. Probably the most valuable lands are the 5,300 acres on the southern border of the Tucson metropolitan area; 3,700 acres at Colossal Cave in Pima County; 800 acres at Picacho Peak in Pinal County; and 4,000 acres in scattered parcels in the Douglas area of Cochise County.
SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE
ACRES AND INCOME FY 2002
ACRES 2,180 87 55,546 0 1,689 5,062 0 0 0 0 64,564 0 639 0 0 0 639
INCOME $23,241.79 $26,709.00 $23,780.94 $0.00 $14,480.43 $1,284.72 $0.00 $0.00 $0.00 $0.00 $89,496.88 $0.00 $639.32 $0.00 $0.00 $0.00 $639.32 $2,218.03 $0.00 $366,999.00 $459,353.23 $583,932.10 $4,970,000.00
SUBSURFACE LEASES Mineral Exploration Permit Mineral Material Oil and Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest Sales Interest Treasurers Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance
Lease & Sale Highlights:
Western States Microwave Trans Commercial Lease 03-087097-00 3.67 Acres $15,000 City of Tucson Land Sale 53-104509-00 146.95 Acres $582,003
TRUST LAND INCOME FY 1982-2002
2 .5
2
1 .5
1
0 .5
0 83 82 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 2 000 200 1 20 02
P erm a nen t Fund Received
R en t & Interest Received
P e rm an en t Fund Interest
Preface 31
SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE
ACRES AND INCOME FY 2002
ACRES 5,327 261 60,668 0 1,134 4,923 0 80 0 0 72,393 60 0 0 0 0 60
INCOME $104,855.29 $143,482.73 $24,119.86 $0.00 $11,835.05 $3,974.99 $0.00 $1,468.50 $0.00 $0.00 $289,736.42 $600.00 $0.00 $0.00 $0.00 $0.00 $600.00 $356.52 $0.00 $99,864.00 $390,556.94 $349,501.99 $3,240,000.00
The State Hospital Grant lands consist of 71,249 acres, primarily blocks and checkerboard grazing lands in Pinal, Pima, Cochise, and Yavapai counties. The largest concentration of grazing lands totals about 15,000 acres in the checkerboard area of Yavapai County west of Paulden; 9,000 acres in the Altar Valley southwest of Tucson in Pima County; 7,000 acres near Gleason; and 6,000 acres in the San Bernardino Valley in Cochise County. Lands with some agricultural as well as grazing potential include 5,000 acres in the Magma area and 9,000 acres near Picacho in Pinal County; 1,200 acres near San Simon; and 6,000 acres near Bonita in Graham County. There are scattered land parcels with some development potential near Prescott in Yavapai County, Topock and Littlefield in Mohave County, and Cave Creek in Maricopa County, and a 4,800acre block near Sahuarita in Pima County.
Beneficiary Summary
STATE HOSPITAL GRANT
SUBSURFACE LEASES Mineral Exploration Permit Mineral Material Oil and Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest Sales Interest Treasurers Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance
Lease & Sale Highlights: Phoenix Golf School Commercial Lease 03-097540-00 44.74 Acres $94,444 Pinal County Perpetual Rights-of-Way 16-103113-00 34.45 Acres $331,052 OASIS Recreational Properties Commercial Lease 03-095873-00 140.91 Acres $42,294
TRUST LAND INCOME FY 1982-2002
2
1. 5
1
0. 5
0 83 82 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 2 000 2 001 2 002
Pe rm an ent Fund Received
R en t & Interest Received
P erm an en t F und Interest
Preface 32
Beneficiary Summary
MINERS HOSPITAL
The 1912 Miners Hospital for Disabled M i n e r s Grant, consisting of 47,771 acres, and the 1929 Miners Hospital Grant, consisting of 47,687 acres, are combined for reporting purposes because they support the same beneficiary. The grant lands are more dispersed (and in some areas there is more development potential) as compared to most of the other quantity grants. This fact is reflected in the higher agricultural, commercial, and special-use revenues from these grant lands. The 1912 grant consists primarily of blocks of grazing lands in seven areas: 11,500 acres near Picacho Peak and 10,000 acres in the Florence Junction a n d Magma areas of Pinal County; 1,800 acres near Skull Valley in Yavapai County; 3,800 acres near Vail in Pima County; 5,400 acres north of the S a n Francisco Peaks in Coconino C o u n t y ; 6,200 acres near Bonita in Graham County; and 5,100 acres near Gleason in Cochise County. Some of the Picacho Peak, Vail, and Magma area lands have commercial and agricultural potential.
SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE
ACRES AND INCOME FY 2002
ACRES 13,826 590 73,875 8 2,000 3,054 0 1 0 0 93,354
INCOME $370,941.83 $702,976.15 $28,366.35 $2,500.00 $15,785.04 $40,292.95 $0.00 $798.82 $0.00 $277.14 $1,161,938.28 $74.54 $145.37 $0.00 $0.00 $0.00 $219.91 $8,648.05 $1,250.74 $307,779.00 $1,479,835.98 $619,311.16 $5,355,000.00
SUBSURFACE LEASES Mineral Exploration Permit Mineral Material Oil and Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest Sales Interest Treasurers Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance
119 225 0 0 0 344
Lease & Sale Highlight:
Talley Defense Systems Inc. Commercial Lease 03-093792-65 312.10 Acres $665,032
The 1929 grant consists of smaller parcels scattered throughout nearly all of the counties. Many small but valuable parcels have development potential, particularly in the Casa Grande, Mesa, San Luis, Topock, Lake Havasu City, Buckeye, and Mammoth areas. The Trust also owns a partial interest in Colorado River-front lands at Bullhead C i t y. The States Enabling Act was amended in 1999 to allow for the long-standing practice of and to clarify the legality of sending money earned from the Miners Hospital Grant to the Pioneers Preface 33 Home.
TRUST LAND INCOME FY 1982-2002
2.5
2
1.5
1
0.5
0 83 82 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 2000 2001 2002
Permanent Fund Received
Rent & Interest Received
Permanent Fund Interest
SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE
ACRES AND INCOME FY 2002
ACRES 3,682 2,812 63,196 0 1,917 7,039 0 475 0 0 79,121
INCOME $66,818.16 $344,469.70 $26,019.60 $0.00 $22,224.60 $38,334.68 $0.00 $53,626.35 $0.00 $3,397.00 $554,890.09 $120.00 $0.00 $0.00 $1,268.37 $0.00 $1,388.37 $4,020.60 $0.00 $891,235.00 $1,451,534.06 $4,726,523.12 $26,551.000.00
The State Charitable, Penal, and Reformatory Grant lands, totaling 77,669 acres, are shared by the Department of Corrections, the Department of Youth Treatment and Rehabilitation, and the Pioneers Home as beneficiaries. This acreage includes a mix of agricultural and commercial properties along with the usual dominance of grazing lands. Potential development lands include: 1,700 acres in the Deer Valley and Surprise areas of the Phoenix metropolitan area; 600 acres along Irvington Road in southeast Tucson; 10,000 acres in the Picacho, Red Rock, and Marana Airport area of Pinal County; 6,200 acres south of Tucson; 480 acres near Casa Grande; and 760 acres in the Butler Valley groundwater storage area in La Paz County. Over 2,700 acres of these Trust lands at Florence and Fort Grant are leased for prison facilities. The Trust also owns a partial interest in lands that surround the Patagonia Lake State Park. Grazing lands include 13,000 acres in the San Bernardino Valley in Cochise County; 7,000 acres in the Bonita and Willcox areas of Graham and Cochise counties; 8,000 acres in the Empire Cienega Ranch in southeast Pima County; and 7,500 acres in the Altar Valley of Pima County. The grant also has 3,200 acres of checkerboard grazing lands in Coconino County; 1,200 acres near Oracle Junction; 7,500 acres near Florence Junction in Pinal County; and 2,500 acres of scattered parcels in the Dragoon and Gleason areas of Cochise County.
2 0 02
Beneficiary Summary
SUBSURFACE LEASES Mineral Exploration Permit Mineral Material Oil and Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest Sales Interest Treasurers Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance
STATE CHARITABLE, PENAL, AND REFORMATORY
Lease & Sale Highlights: Barclay Group Commercial Lease 03-105514-99 22.24 Acres $111,750 Vincent Morano Land Sale 53-106992-00 105.54 Acres $710,000 Harrison-Irvington Properties Commercial Lease 03-089865-65 119.00 Acres $99,298
160 0 0 1,268 0 1,428
TRUST LAND INCOME FY 1982-2002
7
6
5
4
3
2
1
0 83 82 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 2 0 00 2 0 01
Perm anent Fund Received
Rent & Interest Received
Perm anent Fund Interest
Preface 34
Beneficiary Summary
PENITENTIARY GRANT
Most of the 76,334 acres in the Penitentiary Grant are primarily grazing lands in blocks or groups of checkerboard sections in some of the more productive ranching areas of the State. More than 9,000 acres are located in the Altar Valley between Three Points and Sasabe in southern Pima County. Elsewhere, holdings of 1,000 to 8,600 acres in size are located near Sierra Vista, Pearce, and Douglas in Cochise County; north of Florence and east of Picacho Peak in Pinal County; near Paulden in Yavapai County; in Valentine in Mohave County; and west of Williams in Coconino County. Some Penitentiary Grant lands are leased for agriculture, with the largest area being nearly 2,000 acres several miles northeast of Yuma. These lands are additions to the old Yuma Prison Grant that was given to the State in the 1890s for a garden for the prison. Today, this is a productive farm area.
SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE
ACRES AND INCOME FY 2002
ACRES 4,391 472 66,155 0 595 5,762 0 1,778 0 0 79,153 0 40 0 0 0 40
INCOME $174,503.05 $508,000.62 $23,307.64 $0.00 $2,547.45 $38,496.59 $0.00 $0.00 $0.00 $17,100.00 $763,955.35 $0.00 $40.00 $0.00 $0.00 $0.00 $40.00 $2,571.16 $0.00 $169,813.00 $936,379.51 $109,548.69 $4,934,000.00
SUBSURFACE LEASES Mineral Exploration Permit Mineral Material Oil and Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest Sales Interest Treasurers Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance
Lease & Sale Highlight:
Perhaps the most valuable Penitentiary Grant lands are two parcels in the Phoenix metropolitan area, one south of Tucson and one near Globe. They are leased for the Perryville, Santa Rita, and Rincon prisons and the Adobe Mountain and Pinal Mountain juvenile correction facilities.
TRUST LAND INCOME FY 1982-2002
5
4
3
Arnott Duncan Agricultural Permit 23-105725-01 1,283.33 Acres $35,693
2
1
0 83 82 84 85 86 87 88 89 90 91 92 93 94 Permanent Fund Interest 95 96 97 98 99 2000 2001 2002
Permanent Fund Received
Rent & Interest Received
Preface 35
SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE
ACRES AND INCOME FY 2002
ACRES 165 22,538 146,186 0 2,240 5,804 0 2,721 40 0 179,694 0 0 40 2,062 40 2,142
INCOME $3,087.84 $42,384.20 $56,126.74 $0.00 $4,028.25 $5,642.12 $0.00 $0.00 $2,000.01 $1,098
Object Description
| Rating | |
| TITLE | Annual report / Arizona State Land Department |
| CREATOR | Arizona. State Land Dept. |
| SUBJECT | Arizona. State Land Dept.; Public lands--Arizona; |
| Browse Topic |
Land and resources |
| DESCRIPTION | This title contains one or more publications. |
| Language | English |
| Publisher | Arizona. State Land Dept. |
| Material Collection |
Annual Reports State Documents |
| Source Identifier | LD 1.1: |
| Location | 02622697 |
| REPOSITORY | Arizona State Library, Archives and Public Records--Law and Research Library. |
Description
| TITLE | Arizona State Land Department annual report 2001-2002 |
| DESCRIPTION | 52 pages (PDF version). File size: 3990.551 KB. |
| Language | English |
| TYPE | Text |
| Material Collection |
State Documents |
| Acquisition Note | reports@lib.az.us |
| RIGHTS MANAGEMENT | Copyright to this resource is held by the creating agency and is provided here for educational purposes only. It may not be downloaded, reproduced or distributed in any format without written permission of the creating agency. Any attempt to circumvent the access controls placed on this file is a violation of United States and international copyright laws, and is subject to criminal prosecution. |
| DATE ORIGINAL | [2002] |
| Time Period | 2000s (2000-2009) |
| ORIGINAL FORMAT | Born Digital |
| Source Identifier | LD 1.1: 2001/2002 |
| DIGITAL IDENTIFIER | report2002_full.pdf |
| DIGITAL FORMAT | PDF (Portable Document Format) |
| REPOSITORY | Arizona State Library, Archives and Public Records--Law and Research Library. |
| Full Text | Message to the Governor ............................................................................................. Preface Mission Statement & Agency Goals ............................................................................ Preface Fact Sheet & Land Ownership in Arizona .............................................................................. 1 Historical Overview ................................................................................................................. 3 Permanent Fund .................................................................................................................... 5 Expendable Revenue ............................................................................................................. 6 Agency Highlights ................................................................................................................. 7 Department Organization ....................................................................................................... 9 Division Highlights Natural Resources ........................................................................................................ 10 Real Estate ................................................................................................................... 13 Land Information, Title, and Transfer .............................................................................. 17 Board of Appeals ........................................................................................................... 20 Fire Management .......................................................................................................... 21 Administration and Resource Analysis .......................................................................... 23 Beneficiary Summary Determination of State Trust Land Location ................................................................... 27 Common Schools Grant ................................................................................................ 29 Legislative, Executive, and Judicial Buildings ................................................................ 31 State Hospital Grant ..................................................................................................... 32 Miners Hospital ............................................................................................................ 33 State Charitable, Penal, and Reformatory ...................................................................... 34 Penitentiary Grant ......................................................................................................... 35 Normal Schools Grant ................................................................................................... 36 Agricultural and Mechanical Colleges ............................................................................ 37 Military Institutes Grant ................................................................................................. 38 School of Mines Grant ................................................................................................... 39 University Land Code .................................................................................................... 40 University of Arizona 1881 Grant (Act of 2-18-1881) ...................................................... 41 School for the Deaf and Blind Grant .............................................................................. 42 Financial Schedules Rental Acreage and Receipts ........................................................................................ 43 Receipts by Category .................................................................................................... 44 Treasurers Formula Distribution .................................................................................... 45 State Trust Land Acreage by Beneficiary ...................................................................... 46 Auctions of Leases with & without the Preferred Right to Match the Highest Bid ........... 47 Trust Management Maps Surface Management Responsibility ............................................................................. 48 State Trust Land Beneficiary Distribution ....................................................................... 49 Please visit our home page at www.land.state.az.us. Preface ARIZONA STATE LAND DEPARTMENT ANNUAL REPORT 2001-2002 Michael E. Anable Arizona State Land Commissioner September 1, 2002 The Honorable Jane Dee Hull Governor of Arizona 1700 W. Washington Street Phoenix, Arizona 85007 Dear Governor Hull: The State Land Departments annual report for fiscal year 2001-2002 is submitted to you as required by A.R.S. 37-132. The report contains a summary of the Departments management activities and revenue production during the fiscal year. Fiscal year 2001-2002 was an extremely productive one for the Land Department, and it was another record year for State Trust land revenues in many areas. First, the Sales Section held 28 successful land sale auctions during FY 2001-2002, resulting in a total selling price of approximately $128 million. Of the total, $26.6 million was from cash sales. The balance of just over $101.2 million will be carried on terms by the Department at an average interest rate of 9.86% for an average term of 10 years. This year the Department generated a record $35.0 million in expendable revenue that was sent to beneficiaries for their immediate use. Records were also set in several areas of expendable revenues: sales interest, $9.9 million; rights of way, $5.2 million; agriculture, $3.2 million; and special land use permits, $1.9 million. The $154.7 million revenue generated this year by the Trust has been allocated as follows: $56.0 million from the sale of land and minerals was deposited into the Trust Permanent Fund, increasing the Fund to $1,072,134,000; the public schools and institutions received $35.0 million from land rents and interest income as well as $59.4 million from the Treasurers formula distributions; the Treasurers Office also received $.3 million in commercial prepayments that the Land Department will receive back over time as expendable revenue for the beneficiaries; and a record $4.0 million was deposited in the General Fund. It is significant that these revenues were created during a year of tremendous challenges on national, State and local levels. Foreign attacks, recessionary pressures, and budget constraints had their impact on the market. That being said, the Department continued to make excellent progress due to the Trusts strategically located land assets and also due to the Departments progressive approach to land management techniques. Advance land planning and innovative methods of real estate dispositions, for example, contributed to a record single sale of $66.3 million for a 780-acre parcel of Trust land in the Scottsdale area. In addition, a participation agreement attached to the sale will allow the Trust to participate in future revenues as individual homes are sold by the developer. Also worth noting are the types of ground leases the Department has continued to develop. A lease, for example, for a 186-acre mixed-use parcel in north Phoenix that was auctioned during the year is expected to generate approximately $535 million in expendable revenues during its term. Also important were the contributions from other areas within the Land Department. The Forestry and Fire Management Division continued to work aggressively in their protection of forested areas and communities. Their training, coordination, and fire-fighting efforts contributed greatly to the early containment of a number of serious fires. The Department continued to provide for new school sites through ground leases under the Student First Program. Conceptual planning was accomplished for 128,000 acres of Trust land under the Growing Smarter mandate, while Engineering and other support functions continued to provide for enhancement of land values and timely dispositions. The Natural Resources Division generated $10 million in revenue and continued to effectively manage its agricultural, grazing, mineral, water, environmental, and cultural resource Preface MESSAGE TO THE GOVERNOR A Written Report to Governor Jane Dee Hull by the Arizona State Land Commissioner Jane Dee Hull Governor State of Arizona programs. Strong conservation efforts continued under the Arizona Preserve Initiative, and a total of 37,700 acres have now been reclassified as suitable for conservation under the program. Also, 880 acres of Trust land were sold for open space under the matching grant program during the year. The Department also continued to significantly improve its efficiency and productivity. A major redesign of the Departments Website, for example, provides for much more comprehensive information on the Agency. It also provides for the addition and updating of upcoming sales and leases, which has proven to be an extremely valuable marketing and informational tool. The beneficiaries, especially the schools, have given very positive feedback on the easy accessibility to Department information and activities that are of interest to them. The Agency has also developed a Business Continuity Plan and has implemented a Disaster Recovery Server that is located offsite. With these implementations, the Department will be able to continue its critical business functions within 24 hours if a disaster occurs. The Department has received a clean audit from the Legislative Office of the Auditor General for the fifth year in a row. This is especially significant considering the volume and dollar value associated with the Departments transactions. For example, 1,600 new applications were processed during the fiscal year, and almost 1,400 pending applications were finalized. The Board of Appeals, which serves as an Administrative Review Board for the Department, continued its important work in its review of commercial leases, land sales, and rights-of-way appraisals. Also important is the Departments continued strengthening of its working relationship with the leadership of the education community. This relationship with the Land Trusts primary beneficiary has resulted in strong advocacy for the Department in furtherance of its Trust mission. This has been particularly pivotal in efforts to ensure that the value of the Trust, now and in the future, remains protected in the face of efforts to reach a consensus in the ongoing discussions regarding Land Trust law revision. As evidenced by this past years results, the Department has remained focused and committed to its important mission on behalf of the Trust beneficiaries. Through sound and responsible land management strategies, the Department will continue to meet its challenges in providing for the State Trust assets. Sincerely, AGENCY GOALS To implement a progressive asset management process, to improve the q u a l i t y and efficiency of the Departments decision making, and to meet the requirements of the Growi n g Smarter and Growing Smarter Plus Acts. To enhance revenue production. To improve efficiency in processing revenue production activities. To meet the growing demands for fire and forestry management programs on State Trust and private lands, especially in the wildland/urban interface. To incorporate environmental protection into the Departments management actions to enhance the future productivity of the Trusts land and assets. To continue an effective land conservation of appropriate State lands while ensuring continued economic benefits to the Trust. To improve the availability of information and to increase the analytical capabilities of the Agency. To continue to develop and implement m e a s u r e s to improve internal and external customer service. To improve internal and external communication. Michael E. Anable State Land Commissioner LAND DEPARTMENT MISSION STATEMENT To manage State Trust lands and resources to enhance value and optimize economic return for the Trust beneficiaries, consistent with sound stewardship, conservation, and business management principles supporting socioeconomic goals for citizens here today and generations yet to come. To manage and provide support for resource conservation programs for the well-being of the public and the States natural environment. Preface MISSION To manage State Trust lands and resources to enhance value and optimize economic return for the Trust beneficiaries, consistent with sound s t e w a r d s h i p , conservation, and business management principles supporting socioeconomic goals for citizens here today and generations yet to come. To manage and provide support for resource conservation programs for the well-being of the public and the States natural environment. ORGANIZATION AND BUDGET Revenues derived from lands managed by the State Land Department benefit numerous educational, health, and penal institutions. These beneficiaries have received a portion of the millions of dollars in income that have been earned since the State Land Department was established in 1915. The Department is organized into five major Divisions: Administration and Resource Analysis; Land Information, Title, and Transfer; Real Estate; Natural Resources; and Fire Management. In addition to these Divisions, a fivemember Board of Appeals approves all sales and commercial leases for State lands. The FY 2002 General Fund budget was $14,107,695 with 187 positions. FUNDS The Department has a fiduciary responsibility to maximize the income from the sale and use of Trust lands and their products. Funds derived from land transactions are deposited into either a Permanent Fund or classified as Expendable Revenue. Permanent Fund revenues come from the sale of land or royalties from natural products of the land. These funds are not expendable for any purpose; rather, they are invested by the State Treasurer in stocks, bonds, and other STATE LAND DEPARTMENT FACT SHEET interest-bearing securities. Expendable Revenue includes lease revenue from Trust land leases and permits, interest from sales contracts, and treasurers formula distribution on Permanent Fund investments. Expendable Revenue is available to beneficiaries to use directly for their operations. REVENUES During the first 65 years of Arizonas statehood, its economy was focused on natural resources, and the Land Departments program was primarily the management of rural lands and natural resources livestock grazing, agriculture, and mineral production. As urban areas grew and new opportunities arose, the Land Departments program shifted to urban land and commercial development. The dramatic increases in revenues during the last 20 years, reflect this change in emphasis. LAND OWNERSHIP IN ARIZONA The State of Arizona contains an estimated 72,931,000 acres, or about 113,417 square miles, making it the sixth largest state in the United States. The surface land ownership in Arizona can be classified in four basic categories. 42.1 % Fe de ra l Ind ia n Trust P riva te S tate Trust State Land Commissioner Michael E. Anable Deputy State Land Commissioner 27.3 % 12.8 % 17.8 % James L. Adams The percentages are estimates derived from digitized map data. The category called Private is overestimated due to the inclusion of small amounts of land owned by local, State, and Federal agencies. Preface 1 FY 2002 REVENUES BY BENEFICIARY ANNUAL REVENUES COMPARISON: FY 1982 AND FY 2002 FY 1982 % FY 2002 INCREASE $3,980,132.5 0 $34,982,201.11 $56,006,521.62 $328,041.00 $7,250.00 $95,304,146.23 641.5% 199.6% 845.8% N/A N/A 425.6% TOTAL EXPENDABLE RECEIPTS PERMANENT FUND RECEIPTS Land Department General Fund $5 36,772 Leases & Sales Contract Interest $11,674,888 Permanent Commercial Prepayment School Leases Total Land Department State $5,921,829 $0 $0 $18,133,489 BENEFICIARIES TRUST ACRES STATE LAND EXPENDABLE EARNINGS TREASURERS FORMULA DISTRIBUTION Common Schools (Includes County Bonds) Legislative, Executive, & Judicial Buildings State Hospital Miners Hospital (Two Grants) State Charitable and Penal Institutions Penitentiaries Normal Schools Agricultural and Mechanical Colleges Military Institutes School of Mines University Land Code University of Arizona (Act of 2-18-1881) School for the Deaf and Blind TOTAL 8,102,553 $31,103,994.90 $54,781,906.00 $85,885,900.90 $46,747,852.92 64,257 71,249 95,458 $92,354.23 $290,692.94 $1,172,056.98 $366,999.00 $99,864.00 $307,779.00 $459,353.23 $390,556.94 $1,479,835.98 $583,932.10 $349,501.99 $619,311.16 Treasurer Treasurers Formula Distributions Grand Total Revenue General Fund Expendable Permanent Commercial Prepayment Grand Total $14,020,264 $32,15 3,75 3 $5 9,371,443.00 $15 4,675 ,5 89.23 323.5% 381.0% 77,669 76,334 174,798 $560,299.06 $766,566.51 $118,381.49 $891,235.00 $169,813.00 $96,710.00 $1,451,534.06 $936,379.51 $215,091.49 $4,726,523.12 $109,548.69 $343,449.72 Summary $536,772 $25 ,695 ,15 2 $5,921,829 $0 $32,15 3,75 3 $3, 9 8 0 , 1 3 2 . 50 $94,360,894.11 $56,006,521.62 328,041.00 $15 4,675 ,5 89.23 641.5 % 267.2% 845.8% N/A 381.0% 655.4% 124,914 80,168 123,558 138,038 $67,190.46 $113,766.87 $97,152.54 $180,223.10 $444,795.00 $38,530.00 $431,523.00 $454,344.00 $511,985.46 $152,296.87 $528,675.54 $634,567.10 $1,141,174.58 $2,112.72 $58,390.67 $96,520.63 Permanent Fund Growth $141,927,370 $1,072,134,000.00 Revenue Growth Categories 54,602 82,560 9,266,158 $304,523.72 $122,248.31 $34,989,451.11 $1,087,677.00 $200,268.00 $59,371,443.00 $1,392,200.72 $322,516.31 $94,360,894.11 $779,543.37 $448,659.95 $56,006,521.62 Commercial Land and R/W Sales Gr azi ng Agriculture Royalties $ 1 , 57 9 , 6 50 $2,705,864 $1,426,445 $2,608,336 $2,480,5 66 $10,768,941.03 5 81.7% $52,631,934.42 1,845.1% $2,540,084.08 $3,234,831.63 $3,303,485 .73 78.1% 24.0% 33.2% 2 Preface LAND GRANT The Territory of Arizona was established on February 24, 1863, by an Act of Congress. This Act granted sections 16 and 36 of each township for the b e n e f i t of the Common Schools. E n d o w m e n t of public lands for educational purposes was a practice established by the Northwest Ordinance in 1787. Congress quickly recognized the value of the land and the importance of public schools to a developing nation. The State Enabling Act, passed on June 2 0 , 1910, allowed the Territory of Arizona to prepare for statehood. In addition to the previously designated s e c t i o n s of land, the Enabling Act assigned sections 2 and 32 of each township to be held in trust for the Common Schools. The needs of other public institutions were considered by Congress, and through the Enabling Act, more than two million additional acres were allocated for their use. temporary Land Department of the State. The members were Mulford Wi n s o r, Chairman; Cy Byrne, S e c r e ta r y ; and William A. Moody, m e m b e r. Appointed by Governor the multitudinous detail attached to the States varied land interests may have constant attention and to prevent irretrievable loss. The State Land Department and the system by which Trust lands were to be managed were established in 1915 by the State Land Code. In compliance with the Enabling Act and the State Constitution, the State Land Code gave the Department authority over all Trust lands and the natural products from these Trust lands. Since the State Land Departments inception, its missions have been to m a n a g e the Land Trust and to m a x i m i z e its revenues for the beneficiaries. All uses of the land must b e n e f i t the Trust, a fact that distinguishes it from the way public land, such as parks or national forests, may be used. While public use of Trust land is not prohibited, it is regulated to e n s u r e protection of the land and reimbursement to the beneficiaries for its use. HISTORICAL OVERVIEW The Federal government established State Trust land for the public institutions specified as beneficiaries. The largest beneficiary is the schools (K-12). As a result, the Trust will continue to make a major contribution to the support of these beneficiaries. George W. P. Hunt, they were charged with assessing, evaluating, and making r e c o m m e n d a t i o n s about the land granted by Congress to the State for t h e Common Schools and other institutions. The Commission was to report back to the Legislature with its findings and conclusions by the end of the second Legislative session. The Commission concluded that Arizona should not sell its Trust land outright, as other states had done. Instead, it should put the lands to their highest and best use. The decision to sell or lease the land should be based upon the potential use of each p a r c e l . The Commission recommended the creation of a permanent State Land Department ... in order that State Land Commission on south boundary of Santa Teresa division, Crook National Forest. Standing: Senator W.W. Pace Sitting; left to right: W.A. Moody, Forest Ranger J.H. Kirby, Webster, Cy Byrne. CREATION OF THE LAND DEPARTMENT On May 20, 1912, an act of the First Legislature created the three-member State Land Commission to serve as the State Land Commission riding Crook National Forest boundary (Graham County). Horseman in foreground is Forest Supervisor Swift. Second Horseman is W.A. Moody. Third Horseman is Cy Byrne. BENEFICIARIES There are 14 beneficiaries of State Trust land revenues. The Common Schools Preface 3 is the beneficiary with the largest Trust land acreage, originally receiving about 8 . 4 million acres of land. Other beneficiaries, which originally received a total of about 2.5 million acres, include the University Land Code; Legislative, Executive, and Judiciary Building Fund; P e n i t e n t i a r y Fund; State Hospital; School for the Deaf and Blind; Normal through public auction to the highest and best bidder. Short-term leases of up to 10 years may be issued without public auction. All lands are to be appraised at fair market value and cannot be disposed of for less than that amount. TRUST REVENUE Revenues earned from Trust land are c l a s s i f i e d as either permanent or expendable. Revenues derived from the sale of State Trust land, the sale of natural products (such as sand, gravel, water, and fuel wood), and royalties from mineral materials are deposited in the Permanent Fund and invested in stocks, bonds, and interest-bearing securities by the State Treasurer. The treasurers formula distribution from this fund is subsequently transferred each y e a r for use by the appropriate beneficiary. All revenues generated from lease rentals are expendable revenue. The beneficiaries may use these funds directly for their operations. The actual expendable revenue accrued each year from the Trust land is derived from the treasurers formula distribution and the Departments lease rentals. State Trust land management priorities continually evolve to remain efficient in all areas of the Trusts maintenance. PAST ARIZONA STATE LAND COMMISSIONERS W.A. Moer 1915-1920 Rudolph Kuchler 1921-1922 Vernon Vaughn 1923-1928 State Land Commission in camp near Fort Grant, Graham County. Don C. Babbitt 1928-1929 (Universities) Schools; State Charitable, Penal, and Reformatory Institutions; Agricultural and Mechanical Colleges; School of Mines; Military Institutions; University of Arizona (Act of 2-18-1881); and two funds for the Miners Hospital. A 15th beneficiary, County Bonds, was funded by Trust revenues until it was eventually paid. Revenues derived from County Bond lands are now added to the Common Schools grant. ENABLING ACT RESTRICTIONS C e r t a i n restrictions for Trust land management are outlined for the State Land Department by the Enabling Act. These restrictions state that Trust lands cannot be mortgaged or encumbered in any way. Land sales or land leases i n excess of 10 years must be advertised for 10 weeks prior to public auction. After advertising, the sale or long-term lease of the land is awarded One change that dramatically increased the Departments revenue-generating potential was the passage of the Urban Lands Act in 1981. The Act allows the Department to increase the value of Trust land in urban areas by planning and zoning it in cooperation with the local governments. The Legislature has a l s o expanded the Departments leasing capabilities, making long-term leases of up to 99 years possible for land that either has been planned under the urban planning process, or is rural commercial land. Howard J. Smith 1931-1934 Charles P. Mullen 1934-1937 William P. Alberts 1937-1941 O.C. Williams 1941-1949 W.W. Lane 1949-1953 Rodger Ernst 1953-1957 Obed M. Lassen 1957-1970 Andrew L. Bettwy 1970-1978 Joe T. Fallini 1978-1982 Robert K. Lane 1983-1987 M. Jean Hassell 1987-1997 J. Dennis Wells Northern Arizona University c.1913 1997-1999 Preface 4 PERMANENT FUND Growth in Permanent Fund FY 1982 - FY 2002 1200 1100 1000 The Permanent Fund, which reached $1.072 billion at the end of FY 2002, is made up of revenues earned from the sale of State Trust land and the sale of minerals and natural products such as sand, gravel, water, and fuel wood. The corpus of the fund is invested, not spent. The State Treasurer manages the fund and invests it in stocks, bonds, and other interest-bearing securities. The State Treasurer was given the authority in 1998 to invest a portion of the Permanent Fund in stocks and b o n d s in addition to the annuities already invested. The Permanent Fund earnings are transferred for use b y the beneficiary through the treasurers formula distribution. Income from sales and royalties continues to earn money for the beneficiaries on a permanent basis, in essence replacing the value of Trust lands or resources that were sold or removed. The Permanent Fund ensures that the Trust is not depleted and will continue to provide the beneficiaries with nontax dollars into the future. During the first 65 years of Arizonas statehood, its economy was focused o n natural resources. The Land Departments program was primarily the management of rural lands and natural resources livestock grazing, agriculture, and mineral production. In F Y 1982, the book value of the Permanent Fund stood at $142 million. As urban areas grew and new industries a n d opportunities arose, the Land Departments program shifted to urban land and commercial development. With the passage of the Urban Lands M a n a g e m e n t Act in 1981, the Department was given new authority a n d direction to plan, zone, and merchandise the urban Trust lands s u r r o u n d i n g the States major population centers. I n addition, several major reform i n i t i a t i v e s were undertaken and staffing levels increased, which enabled more aggressive and effective leasing and sales programs. The impact of these changes is best illustrated by the dramatic growth in the P e r m a n e n t Fund in the last two d e c a d e s . The book value of the P e r m a n e n t Fund grew from $142 million in FY 1982 to $1.072 billion by the end of FY 2002. T h e table below shows each b e n e f i c i a r y s share of the total Permanent Fund. The chart to the left shows the growth in the Permanent Fund since FY 1982. BENEFICIARY SHARE OF PERMANENT FUND JUNE 30, 2002 BOOK VALUE MARKET VALUE Common Schools Legislative, Executive, and Judicial State Hospital Miners Hospital (Two Grants) Penitentiaries Normal Schools Agricultural & Mechanical Colleges Military Institutes School of Mines University Land Code University of Arizona (Act of 2-18-1881) School for the Deaf & Blind TOTAL $982,851,000 $4,970,000 $3,240,000 $5,355,000 $4,934,000 $1,688,000 $7,109,000 $418,000 $5,169,000 $7,785,000 $18,883,000 $3,181,000 $1,072,134,000 $947,689,000 $4,749,000 $3,295,000 $5,203,000 $25,909,000 $4,783,000 $1,622,000 $6,637,000 $395,000 $4,738,000 $7,543,000 $18,283,000 $3,069,000 $1,033,915,000 900 State Charitable, Penal, and Reformatory $26,551,000 800 700 600 500 400 300 200 100 0 86 82 90 94 98 20 2 0 Preface 5 EXPENDABLE REVENUE BY BENEFICIARY FY 2002 TREASURERS FORMULA DISTRIBUTION LEASE AND SALES CONTRACT INTEREST TOTAL EXPENDABLE REVENUE BENEFICIARIES Common Schools (Including Lands to Retire County Bonds) Legislative, Executive, and Judicial Buildings State Hospital Miners Hospital (Two Grants) $54,781,906.00 $31,103,994.90* $85,885,900.90 $366,999.00 $99,864.00 $307,779.00 $92,354.23 $290,692.94 $1,172,056.98 $560,299.06 $766,566.51 $118,381.49 $67,190.46 $113,766.87 $97,152.54 $180,223.10 $304,523.72 $122,248.31 $459,353.23 $390,556.94 $1,479,835.98 $1,451,534.06 $936,379.51 $215,091.49 $511,985.46 $152,296.87 $528,675.54 $634,567.10 $1,392,200.72 $322,516.31 Expendable revenue totaled $ 9 4 , 3 6 0 , 8 9 4 . 11 in FY 2002 and included lease revenue from Trust land l e a s e s and permits, and interest e a r n i n g s from sales contracts administered by the Department and from the treasurers formula distribution. Expendable revenues are available to the beneficiaries to use for their operations in the same year they are generated. Over the past 20 years more than $1.21 billion in expendable revenue has been transferred to the beneficiaries. This consists of $.36 billion from lease and sales contract i n t e r e s t and $.85 billion from the treasurers formula distribution. As with the Permanent Fund, e x p e n d a b l e revenue has grown dramatically in the last two decades, for the same reasons. The Department h a s taken advantage of the new opportunities arising as urban areas grew and new industries developed. Expendable revenues have increased from $25.7 million in FY 1982 to $94.4 m i l l i o n in FY 2002. The Common Schools is the largest beneficiary and, on average, receives approximately 90 percent of the expendable revenue. The table to the left shows the source of the FY 2002 expendable revenue for each beneficiary, and the expendable revenue chart to the right shows the growth in revenues since FY 1982. EXPENDABLE REVENUE State Charitable, Penal, and Reformatory $891,235.00 Penitentiaries Normal Schools Agricultural and Mechanical Colleges Military Institutes School of Mines University Land Code University of Arizona (Act of 2-18-1881) School for the Deaf & Blind $169,813.00 $96,710.00 $444,795.00 $38,530.00 $431,523.00 $454,344.00 $1,087,677.00 $200,268.00 Total Expendable Revenue FY 1982 - FY 2002 10 0 9 0 8 0 7 0 6 0 5 0 4 0 3 0 2 0 1 0 0 84 82 86 88 90 92 94 96 00 98 02 TOTAL $59,371,443.00 $34,989,451.11 $94,360,894.11 School Leases Treasurers Formula Distribution Rent and Interest * T h e amount for expendable earnings includes the revenue of $7,250.00 from the school leases in a c c o r d a n c e with ARS 3 7 - 2 2 1 , D . Preface 6 JUNE 2002 STATE TRUST LAND AUCTIONS EARN NEARLY $100 MILLION FOR PUBLIC EDUCATION In June 2002, three Trust auctions involving just 1,138 acres earned $96,780,000 million for Arizonas public s c h o o l s . Ten percent down payments on these purchases have been received, with the balances to be paid off over the next 10 years with interest at almost 10% per annum. The successful auctions included a 780-acre parcel that is located in north Scottsdale at 104th Street and Bell Road. The parcel was purchased by Edmunds-Toll Construction Company. The successful bid was at the parcels appraised value, which was $66,300,000. A 253acre parcel located north of Jomax Road, east of I-17 and southwest of the CAP canal in Phoenix, was purchased by Hancock MTH Builders. The successful bid was in the amount of $23,380,000. There were a total of 109 competitive bids beginning at the appraised value of $17,641,185. A 105-acre parcel located at the southwest corner of 105th Avenue and Williams Drive in Peoria was purchased by Vincent A. Morano. The successful bid was at the parcels appraised value of $7,100,000. All the principal proceeds from these tremendously lucrative sales will go directly to the public schools portion of the Permanent Fund, while the interest on these sales will be distributed to the schools as it is earned. The total Permanent Fund for all beneficiaries of the State Land Trust is nearly $1.1 billion. It is anticipated that the portion of the Permanent Fund dedicated solely to the public schools will reach $1 billion within FY 2003. C o m m i s s i o n e r Anable said, These auctions are illustrative of the enormous value of State Trust land. This is Arizonas single most valuable asset, and it is just now beginning to realize its potential. It is easy to understand why the education community appropriately recognizes the school land Trusts critical role as a dedicated funding source to our K-12 schools. AGENCY HIGHLIGHTS FY 2002 was an excellent year for the Land Department, and tremendous progress was made on many fronts. Following are some of the more notable accomplishments. STATE COMBATS TRESPASS AND TRASH ON STATE TRUST LAND For FY 2002 the Land Department pursued trespass actions that resulted in the collection of $510,000 in penalties on behalf of the Trusts beneficiaries. During this same period, more than 2,000 citizen and employee volunteer man-hours were spent on 29 clean-up projects. This resulted in the removal from State Trust land of 81 tons of trash, 266 tires, and 30 abandoned vehicles. The Commissioner said, Im especially proud of the dedication it took to achieve these notable accomplishments under very difficult circumstances. We have only very limited staff and resources to pursue trespassers and effect cleanups, yet we are making headway in both of these important areas of trust a u t h o r i t i e s and the help of citizen v o l u n t e e r s on clean-up projects, a difference is being made in the caretaking of this most valuable Trust asset for our public schools. The Commissioner added, People need to remember that the Trust lands are dedicated primarily to Arizonas public schools, and that they may only be u s e d by obtaining the proper authorization and making the necessary payment for the contemplated use. management. With continuing growing cooperation with local law enforcement 7 Preface FIRE HAZARD REDUCTION IN THE WILDLAND/URBAN INTERFACE The Oak Tree, Mustang, Oversight, Merritt, Center, Ryan, Little, City Hall, Witch, Walker, Carrizo, and Darnell; were all wildland fires that each burned more than 1,000 acres this past summer in Arizona. The Indian Fire forced the evacuation of hundreds of citizens from their houses and burned several homes in the Prescott basin, the Bullock wildfire in the wildland/urban interface. Thinning and o t h e r fuel mitigation treatments of trees have been identified for thousands of acres on State and private lands in the critical wildland/ urban interface. The State Land Department provides coordination and leadership for fire management efforts on State and private lands throughout Arizona. Assistance provided through the Departments cooperative fire and forestry programs help individual landowners and rural communities treat wildland fuels. The Land Department educates homeowners, builders, and community planners about Firewise development techniques. The Department assists rural fire departments with training and equipment for controlling wildfires, and mobilizes fire departm e n t and Federal firefighting resources throughout the State to assist local communit i e s threatened by wildfire. The State Land Department is the lead agency for managing fire and forest health iss u e s on State and private lands in Arizona and has initiated and served as the conduit for several new programs with Federal financial assistance in the last few years to address these critical wildfire issues. 8 Preface Agency Highlights EMPLOYEE RECOGNITION PROGRAM EMPLOYEE OF THE YEAR: Gary Hase 2001 EMPLOYEE OF THE QUARTER: Gary Hase Michele Muench Karl Sieglaff Nancy Garcia Dawn Dillman 3rd Qtr 3rd Qtr 4th Qtr 1st Qtr 2nd Qtr 2001 2001 2001 2002 2002 Fire forced the total evacuation of Mt. Lemmon for weeks, and the Peak Fire forced the evacuation of Pine Lakes in the Hualapai Mountains near Kingman. The Rodeo/ Chediski Fire burned nearly half a million acres and destroyed more than 460 homes in Heber, Overgaard, Linden, Timberland Acres, and Pinedale, and threatened thousands more i n Show Low, Lakeside, Pinetop, and Forest Lakes. The summer of 2002 was t h e worst fire season in Arizona history. The rapid expansion of rural c o m m u n i t i e s and the building of new homes in forest and range lands have e x p o s e d thousands of citizens and their homes to MERV MASON CUSTOMER SERVICE AWARD: Cameron Hanye Susan Turner Dawn Dillman Sue Russell Catherine Balzano Carol Holtorf Karl Sieglaff 3rd Qtr 4th Qtr 1st Qtr 1st Qtr 2nd Qtr 2nd Qtr 2nd Qtr 2001 2001 2002 2002 2002 2002 2002 ARIZONA STATE LAND DEPARTMENT ORGANIZATIONAL CHART Administration & R e s o u r c e Analysis Division C o m m i s s i o n e r s Office Conservation A d v i s o r y Committee B o a r d of Appeals U r b a n Land P l a n n i n g Oversight Committee L a n d Information, Title, & Transfer Division R e a l Estate Division F i r e Management Division N a t u r a l Resources Division Commissioners Office (602) 542-4621 Administration and Resource Analysis Division (602) 542-4634 Land Information, Title, and Transfer Division (602) 542-4602 Real Estate Division (602) 542-1704 Fire Management Division (602) 255-4059 Natural Resources Division (602) 542-4625 A c c o u n t i n g Section T i t l e s and Contract Section S a l e s & Commercial L e a s i n g Section D e e r Valley Office N R C D Section F o r e s t r y / F i r e Fiscal Section Administrative Procedures & I n f o r m a t i o n Section Rights-of-Way Section P h o e n i x District R a n g e Section Information Technology Section P u b l i c Affairs, L e g i s l a t i o n , and Communication Section R e a l Estate Management Section F l a g s t a f f District W a t e r Rights & A g r i c u l t u r e Section Geographic I n f o r m a t i o n Systems Section A p p r a i s a l Section L a n d Conservation & T r a n s f e r Section P l a n n i n g Section Tu c s o n District Environmental Resources & T r e s p a s s Section S t a t e Cartographers Office M i n e r a l s Section E n g i n e e r i n g Section U r b a n & Community Forestry Preface 9 L e a s i n g categories in the Natural Resources Division include grazing, agriculture, mineral, mineral material, exploration, and apiary. Other areas of natural resource administration include water sales, mineral material sales, water rights administration, trespass, recreational permits, environmental contamination, and cultural resources. The following six sections manage the Divisions programs. RANGE SECTION The Range Section administers 1,293 grazing leases covering more than 8.4 million acres and manages State Trust range land. Duties include: developing coordinated management plans; monitoring range land; reviewing land treatment and range improvement projects; grazing lessees on changes to law, rule, and policy. W ATER RIGHTS & AGRICULTURE SECTION The Water Rights & Agriculture Section was diversified this fiscal year with the addition of the agricultural leasing program and dam safety administration. The agricultural leasing p r o g r a m administers 405 leases covering 175,188 acres and 42 apiary p e r m i t s on 459 sites. The Water R i g h t s program continues the management of the following: surface water rights (including applications, permits, certificates, and registrations), grandfathered groundwater rights, wells, a Central Arizona Project (CAP) allocation of 32,076 acre-feet, and an irrigation Colorado River contract for State Trust lands. Additional Water Rights program responsibilities include: assessing water charges on leases; facilitating public auction water sales; administration of water reporting for Colorado River contracts; and managing the Trusts CAP water allocation. The Section conducts site investigations for the following purposes: leases/permits, i m p r o v e m e n ts , new uses, safety, trespass, location verifications, etc. NATURAL RESOURCE CONSERVATION SECTION The Natural Resource Conservation Section continues to support Natural R e s o u r c e Conservation Districts (NRCDs) which are political subdivisions of the State and admistratively linked to the Land Department. A new conservation district was created last year, bringing the number of districts served to 32. More than 200 supervisors and advisors address natural resource conservation in their respective districts, covering over 85% of the State and serving more than 5,000 cooperators. The Environmental Special (license) Plate Fund provides monies to the 20 e d u c a t i o n centers organized by NRCDs and distributes competitive grants. The Arizona Advisory Council on Environmental Education sunset occurred June 30, 2002. The fund oversight is now entirely with the Natural Resource Conservation Section. MINERALS SECTION The Minerals Section administers four distinct Statewide leasing programs. During this fiscal year, continued low copper prices resulted in production being curtailed to a 16-year low. Over the next year or two, however, copper p r i c e s are expected to increase. Division Highlights NATURAL RESOURCES DIVISION ...administers all natural resource-related leases, Natural Resource Conservation Districts, and any natural resource issue that affects State Trust land. Division Director Bill Dowdle Personnel in the Range Section and Water Rights Management Section ensure the long-term viability of State grazing lands and water rights. ensuring that appropriate laws, rules, and guidelines are followed when range improvements affect protected plants, archaeological resources, and wildlife habitat; processing all grazing-related applications for new leases, renewals, and assignments; representing the Department at administrative hearings; preparing billings for grazing-related rentals and surcharges; and updating Mineral leases, managed by the Minerals Section, are an important source of revenue for the Trust. Additional revenues should accrue from the first production of a minimum 1.7 million cubic feet of CO2 gas per day from a gas field located near St. Johns. Section Managers Jody Latimer, NRCD Stephen Williams, Range Cynthia Stefanovic, Water Rights & Agriculture Chuck Hudson, Environmental Mike Rice, Minerals Ron Romatzke, Urban & Community Forestry Preface 10 Division Highlights FACTS AND FIGURES FY 2002 ACRES NUMBER OF LEASES Agriculture* 175,188 2,529 405 26 1,293 79 140 190 Mineral Material Grazing Exploration Permits Mineral Oil & Gas 8,397,881 24,505 16,377 323,971 Although base metal performed poorly, the Section has begun to realize the benefits of efforts initiated three years ago. Building upon mineral assessment studies completed in FY 2000, the Section has developed a p r o g r a m for the sustainable development of mineral aggregate resources. The approach has gained attention at the national level and was presented to the National Research C o u n c i l s Committee on Earth Resources in Washington D.C. in 2002. The approach is being considered in the development of a nationwide study, and the Research Council will follow with a r e c o m m e n d a t i o n to the National Academy of Sciences. ENVIRONMENTAL RESOURCES AND TRESPASS SECTION The Environmental Resources and T r e s p a s s Section manages five programs: Trespass Program Investigates and resolves unauthorized and illegal use of State Trust land, and manages the Land Maintenance Fund for clean-up and protection projects. Environmental Contamination Prevention and Remediation Program Provides oversight and manages remediation projects. C u l t u r a l Resources Management Program Coordinates interagency review of proposed revenue-producing Trust land use to ensure compliance with the State Historic Preservation Act. Recreational Program E n c o m p a s s e s off-highway vehicle m a n a g e m e n t and recreational permitting. The primary goal is to conserve the land asset while providing o p p o r t u n i t i e s for the responsible operation of off-highway vehicles and other recreational pursuits. Access permits are available for individual, family, and group activities. Dust Abatement Program Manages fugitive dust problems on Trust land in Maricopa County from unpaved roads and parking lots and from vehicle use in open spaces. URBAN AND COMMUNITY FORESTRY SECTION The Urban and Community Forestry Section provides technical assistance and grants to Arizona cities and towns, and tree planting assistance to private landowners. Section staff work closely with the A r i z o n a Community Tree Council, coordinating the Community Challenge Grant Program, the Arizona Arbor Day Foundation poster contest, and the State Arbor Day celebration. The staff a l s o participate in trade shows, consumer education programs, and industry classes and workshops. A r b o r i s t study classes are also coordinated by the staff and the Arizona Community Tree Council, providing training and certification for tree care professionals. Key to the programs success and viability are partnerships with such organizations as the Arizona Nursery Association and Landscape Contractors Association, the States universities and community colleges, and numerous cities and towns. NUMBER OF REGISTRATIONS AND WATER RIGHTS CLAIMS Stockpond Registrations Certificated Surface Water Rights Well Registrations Adjudication Statements of Claimant Water Right Registrations Grandfathered Groundwater Rights 4,312 99 2,670 7,022 7,424 237 FUTURE GOALS Encourage lessee stewardship of State Trust range land through coordinated planning activities. Encourage competition in the grazing lease program through annual advertisement of expiring leases. Develop and implement a strategic plan for the sustainable development of mineral wealth. Continue to facilitate the execution of Colorado River contracts with the Bureau of Reclamation. Continue efforts to educate and support law enforcement agencies throughout the State with training opportunities and information to assist in their efforts to provide enforcement of laws on Trust land. Encourage urban forestry through Statewide promotions and educational materials. Provide in-State grant disbursement programs to 10 communities for planting trees. *Includes Agricultural Use Permits Preface 11 D I V I S I O N ACCOMPLISHMENTS Produced revenues of $10.2 million. Participated in the development of coordinated resource management plans, monitored existing plans, and produced $2.5 million in revenue from grazing leases. Field inspected all 405 agriculture leases and resolved 17 compliance problems, which generated $102,431 in Reviewed and commented on 99 rightsof-way applications for native plant and e c o l o g i c a l impacts. Conducted environmental analysis on Arizona P r e s e r v e Initiative applications. Attended numerous meetings of Weed Management Areas. Administered 435 exploration, mining, oil, and gas leases, producing a total of $3.56 million. In addition to lease revenues, indirect income in the amount of $573,000 was generated from miningrelated land uses. C o n d u c t e d 157 water resource evaluations for land applications (land p u r c h a s e s / l e a s e s ) ; reviewed 41 improvement applications. Completed 86 site investigations related to wells/ water facilities, and 47 corrections were made to existing water filings; four wells were capped/abandoned by lessees, 12 wells were capped by ASLD, and six new water filings were submitted. Implemented a new program to achieve c o m p l i a n c e related to dam safety requirements for regulatory structures on State Trust land, which resulted in six dam safety field investigations. Negotiated the last settlement with the H a r q u a h a l a Valley Irrigation and Drainage District over the distribution of HVID CAP buy-out monies. The settlement resulted in the State Trust land beneficiary receiving a payment of $95,026. Reduced outstanding CAP irrigation district assessment delinquencies by $189,471 and collected $146,021 in reimbursements to the Arizona Federal Reclamation Trust Fund. Designed, initiated, and completed the f i r s t two stages of the multistage analysis of State Trust lands as required by Gila V to support the States claims for Federal reserved water rights. Through 29 clean-up projects, utilizing over 2,004 hours of volunteer time, Section staff coordinated the removal of 81 tons of trash, 266 tires, and 30 abandoned vehicles. Over 3,171 miles of integrated trails were surveyed for management considerations. Staff reviewed 454 land use and disposition actions for cultural resource issues; finalized remediation of 28 hazardous m a t e r i a l s sites; and issued 5,320 individual, family, and group recreation permits. With the assistance of the Information Technology Section, established an intra-agency database for tracking information about parcels of Trust land that have been inspected for cultural resources. Urban and Community Forestry Prog r a m activities resulted in five communities and 12 organizations bei n g awarded 18 grants totaling $114,000; 3,300 individuals attended Certified Arborist training and tree care clinics. Arbor Day 2002 was celebrated throughout the State of Arizona. The educational component of Arbor Day was the elementary school poster contest, which included 450 participating students from 20 schools. Division Highlights N ATURAL RESOURCES DIVISION REVENUE PRODUCTION Lease Rentals Agriculture* Mineral Material Grazing Exploration Permits Geothermal Mineral Oil & Gas TOTAL $3,234,832 $158,886 $2,540,084 $29,137 $0 $8,144 $476,896 $6,447,979 Sale of Products Public Auction Water Sales Lease Water Charges Mineral Royalties Natural Products TOTAL $259,868 $174,904 $510,708 $2,375,154 $3,320,634 The Agricultural Leasing Program manages over 400 state agricultural leases. a d d i t i o n a l rental revenue. Lease revenue totaled $3.2 million. Field inspected 459 apiary sites on 42 permits plus six compliance problems. Permit revenue totaled $22,950. Participated in 62 Natural Resource Conservation District-related meetings. Provided staff support to the Arizona Association of Conservation Districts and Natural Resources Conservation Service. Assisted in the production of a Backyard Conservation for Arid Lands Video and Education Kit. S u p p o r t e d the Arizona Advisory Council on Environmental Education in a d m i n i s t e r i n g the Environmental Special Plate Fund. Trespass Revenues Direct Revenue SecondaryLease Revenue TOTAL GRAND TOTAL *Includes Agricultural Use Permits $363,488 $146,439 $509,927 $10,278,540 Preface 12 Division Highlights SALES AND COMMERCIAL LEASING SECTION The Sales and Commercial Leasing Sections were combined in February 2002 in an effort to better coordinate the disposition of State Trust lands. Thirty-three land auctions were held during FY 2002, resulting in a total selling price of more than $127.8 million. Of the total, $26.6 million was generated from cash sales. The balance of just over $101.2 million will be carried on terms by the Department at an average interest rate of 9.86% for an average term of 10 years. Approximately 5,800 acres of Trust land was sold. Of that, 880 acres were sold for open space under the Arizona Preserve Initiative Program and another 230 acres of open space were located within urban planned parcels sold for residential development in FY 2002. Commercial Leasing produced revenues of $13.4 million during FY 2002. Seven long-term leases were offered at public auction. Six of the seven auctions were successful, resulting in long-term ground leases being issued for three school sites, a corporate office site, a neighborhood commercial center, and a mixed-use development site. Revenue from the six leases will total approximately $610.5 million over the term of the leases. The Department anticipates an additional $3.0 to $4.0 million in lease revenues in FY 2003 due to Arizonas growth pattern within the real estate market and prime location of commercial Trust properties ready for development. RIGHTS-OF-WAY SECTION The Rights-of-Way Section produced revenues of more than $12.54 million during FY 2002. The Section completed 426 grants for rights-of-ways. The Section grants rights-of-ways to public agencies, utility companies, and private citizens to facilitate development and to accommodate the needs for public roads, power, water, and sewer throughout the State. REAL ESTATE MANAGEMENT SECTION The Real Estate Management Section is a new Section formed in February 2002. Its main purpose is to support and assist the other sections within the Division with management issues. It is responsible for providing information regarding the Real Estate Division to both staff and public; staff training; reporting all real estate transactions and daily business activities to both internal and external entities; preparing and conducting all public auctions; marketing, to include the Web pages for the Real Estate Division; planning, developing, and maintaining the Divisions budget; developing and maintaining of all long-term contracts such as particip a t i o n agreements and long-term leases (including plat approval and issuance of partial patents). APPRAISAL SECTION The Appraisal Section, through staff and contract appraisers, received 375 new land appraisal requests this fiscal year. The Section completed 408 appraisals and reviewed 158 appraisals. PLANNING SECTION The Planning Section completed drafts of conceptual plans for Gila Bend, Sahuarita, Chino Valley, Prescott, Prescott Valley, Flagstaff, and North Phoenix totaling 128,055 acres. The Section also assisted the Maricopa Association of Governments in its assessment of land uses and transportation systems in the northwest Valley. The Planning Section stepped up its efforts to critique general plan updates throughout the State, while also providing assistance relative to the Verde Valley Open Space Committee, the Prescott Airport Committee, DavisMonthan Air Force Base, the Houghton Road corridor, Flagstaffs Walnut Canyon, and the SE Maricopa/Pinal transportation committee. The Section also processed general plan amendments for the 40th and McDowell development plan, and the Kortsen and Henness development plan. Finally, the Section completed the first phase of a multi-modal transportation plan for the Scottsdale Road Loop 101 intersection and initiated preliminary planning studies for the North Tatum planning area in Phoenix. ENGINEERING SECTION The Section provided engineering and hydrologic support to the Department that included: performing infrastructure, drainage, and environmental assessments; inspecting dam safety in coop- REAL ESTATE DIVISION ...fostering well-balanced land planning and design while meeting the demand for residential and commercial properties. Division Director Ron Ruziska Assistant Division Director Mark Hanson Section Managers Linda Beals, Sales and Commercial Leasing Greg Novak, Rights-of-Way Sandy Jacobs, Real Estate Management Bill Shaffer, Appraisal Gordon Taylor, Planning Ott Chatupron, Engineering Preface 13 eration with the Department of Water Resources on State Trust land; performing a technical review, giving comments and offering recommendations on applications; the Navigable Streambed program; and the Colorado River ownership and boundary determination program. In the past year the Section accomplished the following: Natural Resource Support: Assisted the Minerals Section with sand and gravel issues on Trust land; cooperated with the Department of Water Resources to bring the Wineglass Ranch Dam in Chino Valley into compliance with State and Federal dam safety standards (this task is ongoing); and assisted the Environmental and Trespass Section in having an illegal drainage structure re- moved from State Trust land in north Mohave County. Real Estate Support: The Section provided technical support for infrastructure requirements and costs for the disposition of parcels in Desert Ridge and other master planned developments. The Section directed the master drainage studies for Paradise Ridge and obtained 401/404 permits. It is also providing technical review for ongoing flood control on seven projects with the Flood Control District of Maricopa County and with the Pima Flood Control District. Under the Streambed Navigability Program, all the major and minor water courses under former legislative bills FACTS AND FIGURES LAND SOLD FY 2002 ACRES SOLD TOTAL SALES PRICE $127,123,647 $644,400 $127,768,047 TOTAL SALES PRICE $ 14 0 $ 12 0 I n Millions have been completed. Revision of these study reports will be undertaken under Senate Bill 1275. In addition, 22 major water courses and other water courses in 15 counties will be revised in the next two years. D I V I S I O N ACCOMPLISHMENTS Created the Real Estate Divisions Web pages for the Land Departments new Website. Development of a training manual for new Real Estate Division employees. Land sales principal generated more than $45.3 million for the Permanent Fund. In addition, expendable revenues were generated in the amount of $9.9 Division Highlights AVERAGE PRICE PER ACRE $32,5 93 $334 Urban Rural TOTAL ACRES SOLD 3,900.33 1,932.04 5,832.37 The real estate market continues to be strong in Arizona as a result of the explosive population growth throughout the State. To meet the market demand, the Department offered for lease and sale properties within the growth path of the major metropolitan areas. In addition, the Division worked with communities to foster well-balanced land planning and design criteria for urban Trust lands. AVERAGE PRICE PER ACRE $ 3 5 ,0 0 0 $ 3 0 ,0 0 0 $ 2 5 ,0 0 0 $ 2 0 ,0 0 0 $ 1 5 ,0 0 0 $ 1 0 ,0 0 0 $ 5, 00 0 $0 $ 10 0 $ 80 $ 60 $ 40 3,900.33 1932.04 $ 20 $0 U rb an R ural R u ra l Ur ban R ur al U rb an Preface 14 DESERT RIDGE A 5,400-Acre Master Planned Community in North Phoenix PARCEL 8 S e v e n t y - s i x bids were p l a c e d by four different residential developers on a 5 0 0 - a c r e parcel in the Desert Ridge planned comm u n i t y. The highest and best bid of $52.9 million was declared by the auctioneer. million from land sales interest, and $59.4 million from the treasurers formula distribution, for a total revenue production of $114.6 million. It is interesting to note that in FY 2001 the interest generated from land sales was only $1.7 million. Given the Departments change in emphasis to term sales, the expendable revenue will grow as the Department continues to sell lands on terms. The Division held a record sale for $66.3 million for a 780-acre parcel of State Trust land located at 104th Street and Bell Road in Scottsdale. The parcel sold with a participation agreement attached that will allow the Trust to participate in future revenues as individual homes are sold by the developer. Out of the 33 land auctions held in FY 2 0 0 2 28 were successful and two sparked competitive bidding. Spirited bidding took place on a 253-acre parcel of land within the Valley Vista Development Plan located at 19th Avenue and Jomax Road in north Phoenix. One hundred nine bids were placed over and above the appraised value of $17.7 million, earning an additional $5.7 million for the Trust for a total selling price of $23.4 million. Two interested bidders placed seven bids on a 47-acre parcel located in the Flagstaff area. The competitive bidding earned the Trust an additional $280,000 over the appraised value of $570,000. Worth noting is the 186-acre ground lease for a mixed-use development at the southeast corner of I-17 and Happy Valley Road in Phoenix that was offered at public auction in September 2001. PARCEL 7 I n FY2001 the Division l e a s e d a 90-acre parcel w i t h i n the Desert Ridge m a s t e r planned commerce park area in north Phoenix. A m e r i c a n Express acquired the lease at auction, which over the term of the lease will earn in excess of $486 million for the Trust. DESERT RIDGE DISPOSITIONS Parcel No. 1A & 1B 1C 1D 1E, 1F & 1G 2A 2B 3 4 5 6 7 8 Acres Sold or Leased Sold Leased Leased Leased Leased Sold Sold Sold Sold Sold Leased Sold Use Date Sold/Leased 07/07/93 07/07/93 07/07/93 07/07/93 12/12/95 12/12/95 01/03/96 02/27/96 02/27/96 02/10/98 11/13/00 04/04/01 Revenue 780 180 54 332 106 2 242 23 24 62 91 536 Residential/Golf Resort Golf Marriott Resort Commercial Retail Sumitomo Sitix Utility Pump Station Mayo Hospital Residential Middle School High School American Express Residential $ 9,360,000 $ 33,200,000 $ 45,800,000 $347,400,000 $ 90,300,000 $ 57,350 $ 12,320,000 $ 1,416,000 $ 1,654,040 $ 2,965,000 $486,000,000 $ 52,900,000 Parcel 3: The Mayo Clinic Hospital 15 Preface This lease is expected to generate over $534.7 million for the Trust over the 99year lease term. A new automated modeling valuation (AMV) system was completed this fiscal year and is now being used by staff appraisers to produce valuations. This system has helped expedite appraisals needed for rights-of-way and shortterm leases. The average time for the Division to complete an appraisal has been re- duced by approximately 10% from the previous year. The Division completed conceptual plans totaling 128,055 acres for urban Trust lands in Maricopa, Pima, Yavapai, and Coconino counties. Since the beginning of the Growing Smarter program the Division has conceptually planned a total of 416,643 acres. In addition General Plan amendments were processed for the 40th Street and McDowell Development Plan, and the Kortsen and Henness Development Plan. Annexations were processed for the cities of Marana, Prescott, and Kingman that were subsequently approved by the Selection Board. The Division continues its involvement with cities and counties to safeguard the interests of the Trust by participating in planning committees, sitting committees, and stakeholder groups. Division Highlights PLANNING Completed conceptual plans for: Gila Bend Chino Valley, Prescott, and Prescott Valley Flagstaff Sahuarita Phoenix Participated in: MAG continuing issues SE/Maricopa/Pinal Transportation Committees Gateway and Desert View Village Planning Committees Prescott Airport Plan Verde Valley Open Space Committee Flagstaffs Walnut Canyon Plan Ed Fox Group Committee Phoenixs Desert View Village Design Subcommittee ENGINEERING Under Senate Bill 1275, provided technical evidence for the determination of navigability of watercourses in the State. Continued to provide technical and expert witness services for litigation cases. Assisted in the disposition of urban land in Camino a Lago (Peoria) by providing an infrastructure assessment. Completed the 401/404 permit process for Paradise Ridge. FUTURE GOALS Offer at public auction Trust lands valued at over $190 million in FY 2003 at terms favorable to the Trust. Emphasize sale and long-term commercial leasing efforts in the urban areas. C o n t i n u e to offer at public auction Trust lands for conservation purposes under the Arizona Preserve Initiative Program. Emphasize participation sales and long-term commercial leases. I m p r o v e the automated valuation modeling system production rate. Continue to produce appraisals and consulting services in a timely manner. Develop a strategy to reduce the fees paid for contract appraisals. C o o r d i n a t e the planning and siting of power lines in developing areas earlier in the process to ensure Trust lands are not being adversely affected. Reevaluate the rent schedule used for all rights-of-ways, c o m m u n i c a t i o n sites, and advertising sign permits to ensure market rents are being achieved. C o o r d i n a t e and integrate all State planning and engineering issues with city/town general plans and county comprehensive plans. Continue the preparation of conceptual plans for Urban Trust lands as mandated by Growing Smarter. Continue working with communities on annexation issues and safeguarding the interest of the Trust. Complete the Agencys Five Year Plan. Continue to work with communities on General Plan issues and zoning issues to protect the long-term interest of the land as well as to enhance the market utility of the land. C o n t i n u e to focus on the planning, engineering, and development of Trust lands that will lead to profitable d i s p o s i t i o n strategies for higher-quality and higherrevenue-producing sales and leases. Coordinate with the Maricopa County Flood Control District and the cities of Phoenix and Scottsdale for a regional solution to the drainage problems in the northern Maricopa County area. Preface 16 Division Highlights TITLE AND CONTRACTS SECTION (T&C) T h e Title & Contracts Section processed 1,601 new applications, finalized 1,385 pending applications, and researched 5.5 million acres of land associated with the sale, lease, and use of the States Trust and sovereign lands. T&C issued five certificates of purchase, 37 patents, and one partial patent on State Trust lands. T & C researched an additional 1.1 million acres of Trust land involving title issues and special projects. A portion of the research involved assisting the Attorney Generals Office in researching over 670,000 acres of Trust lands within the Little Colorado River Watershed. O n a continuing basis, T&C is responsible for processing, developing, revising, and docketing all surface lease, sale, or use applications. Other r e s p o n s i b i l i t i e s include preparing, drafting, and revising all surface lease, permit, right-of-way documents, as well as ensuring compliance with laws, r u l e s and guidelines of the Land Department. The Title Unit is responsible for all a c q u i s i t i o n and disposition of the States 9.3 million acres of State land, ensuring computer records are current and reflect accurate information. Other r e s p o n s i b i l i t i e s include extensive research and preparation of title reports for all legal actions addressing Trust lands. T & C continues enhancement of thousands of current and historical land acquisition and disposition records, providing our customers with ease and clarity in which to gather needed land use and ownership information. ADMINISTRATIVE PROCEDURES & INFORMATION SECTION (APIS) T h e Administrative Procedures & Information Section is responsible for: 1 ) coordination of administrative hearings and litigation issues; 2) public records; and 3) cadastral survey of Trust lands. LAND INFORMATION, TITLE, AND TRANSFER DIVISION ...ensuring the integrity and quality of the States land ownership, public relations, communication, and public records as well as the coordination of applications and preparation of contracts associated with the surface use of the States 9.3 million acres of Trust land. Division Director of Administrative Hearings (OAH). It was APIS goal to resolve as many of t h e appeals through settlement conferences as possible. As a result, APIS resolved 20 appeals (83%) through settlement conferences, thus saving considerable time and money for the appellant and the Department. M o d i f i c a t i o n s were made in the c u s t o m e r service and employee satisfaction surveys. Actions were taken to improve unfavorable ratings or issues in both areas. The customer service survey form is now easier for customers to read. Favorable customer service TOTAL ACREAGE 136,122 8,397,881 80,185 498 175,188 240,775 18,275 119 12,892 0 9,061,935 16,377 24,505 2,529 323,971 0 367,382 9,429,317 % OF ACREAGE 1.50 92.68 0.88 0.01 1.93 2.66 0.20 0.00 0.14 0.00 100.00 4.46 6.67 0.69 88.18 0.00 100.00 A P I S coordinated 24 appeals of Departmental decisions with the Office STATE TRUST LAND USES NO. OF LEASES SURFACE Rights-of-Way Grazing Commercial Commercial School Leases Agriculture Use Permits U.S. Government Homesite Institutional Recreation Subtotal (Leases) SUBSURFACE Mineral Mineral Exploration Mineral Material Oil & Gas U.S. Government Subtotal (Leases) TOTAL LEASES 6,715 1,293 307 6 405 495 158 16 10 70 9,475 140 79 26 190 0 435 9,910 70.87 13.65 3.24 0.06 4.27 5.22 1.67 0.17 0.11 0.74 100.00 32.18 18.16 5.98 43.68 0.00 100.00 % OF LEASES Richard Oxford Section Managers Terry Arce, Title & Contracts Rozanna Sedillo, Administrative Procedures & Information Nick Simonetta, Public Affairs, Legislation & Communication Lillian Moodey, Land Conservation & Transfer Preface 17 ratings have increased from 60% in November 2001 to 85% in June 2002. More detailed employee satisfaction survey results were produced this past y e a r, and they identified specific problem areas for the Department to address. T h e Public Records area is the Departments information and records research center. It provides expertise on an extensive land use database of 9.3 million acres of Trust land. A major role of the Public Records area is to conduct and instruct the public and Departmental staff in land title research procedures and interpretation of title r e c o r d s , both physical and computerized. Issuance of recreational permits played a significant role in the routine public i n q u i r i e s received this year. Approximately 6,000 permits were issued this fiscal year, as compared to 3,478 for the last fiscal year. CADASTRAL AND SURVEY UNIT The Departments Parcel and Land Mapping System (PALMS) State land d a t a b a s e is maintained by the C a d a s t r a l Unit (Cadastral), a fully computerized land mapping and survey unit. PALMS depicts the current status and availability of State Trust lands. Cadastral resolved 1,495 land legal description issues associated with leases and other land use contracts, and approximately 1,550 new parcels were plotted this year. C a d a s t r a l provided computerized mapping services on several on-going special projects, such as the revision of Kortsen/Henness, the State Plat 21 Planning Project, and new projects c o n s i s t i n g of the revision of the Valencia-Houghton Roads Planning Project in Pima County. A large array of Colorado River sovereign land maps were produced, depicting the everchanging location of the river banks over time. Various field operations relating to land b o u n d a r i e s and surveys were conducted this past year to assist other Divisions in resolving trespass issues, determining ownership for lease and title discrepancies, and locating landfill areas. LAND CONSERVATION AND TRANSFER SECTION The Land Conservation and Transfer S e c t i o n administers the Arizona Preserve Initiative (API) Program, the S o v e r e i g n Lands Management P r o g r a m , and State-Federal Land M a n a g e m e n t Programs, involving F e d e r a l land condemnations from Congressional actions. API became law in 1996. The law lays out a process by which urban Trust land that meets specific criteria can be petitioned for reclassification as suitable for conservation, and subsequently leased for up to 50 years or sold for c o n s e r v a t i o n purposes at public auction. In 1998, the voters passed P r o p o s i t i o n 303, which included a matching grant program created under the auspices of the State Parks Board for the acquisition of urban State Trust lands for conservation. Division Highlights DIVISION FACTS AND FIGURES The State Land Department manages 9.3 million surface acres of Trust land and 9.0 million acres of subsurface or mineral estate. 97% (9.0 million acres) of the surface is under 9,475 leases and other contracts. 4% (367,000 acres) of the subsurface is under 435 leases and other contracts. Four API petitions for reclassification encompassing approximately 11,835 acres were received. Three API petitions totaling 13,856 acres were reclassified. Two API sales applications that totaled 8 8 1 acres were auctioned, adding $14,568,200 to the Permanent Trust fund. FUTURE GOALS Continue the research and input of recently identified missing Federal rightsof-way. Strive to develop and implement innovative methods to improve customer service and employee satisfaction surveys. Complete In-Lieu land selection of 15,230 acres to be added to the Trust inventory in the Fall of 2002. Continue to improve and expand the communications program within the Agency and with the public and private sectors. Continue to improve and expand public information and media relations regarding Trust land purpose and function. Continue to improve and expand the Divisions response to public and staff information requests. Continue to evaluate and administer the conservation potential of qualified parcels of State Trust land for open space to benefit future generations, without compromising the benefits to the Trust beneficiaries. Preface 18 Division Highlights The Division is responsible for a variety of administrative land management functions, including: Land title, ownership, and use of 9.3 million acres C o o r d i n a t i o n of processing applications and preparation of contracts for lease and use of Trust surface lands Maintains public records and land database information on 10,000 active contracts L a n d surveys, plat maps, and legal descriptions of land Processing Federal condemnations land Sovereign land is land that is owned by the State but that is not part of the Trust land granted to Arizona at Statehood. The Trust obligations contained in the Arizona Constitution have no direct rel a t i o n s h i p to the management of sovereign lands. This Section is responsible for three of the four types of sovereign lands: 169 acres of Federal Emergency Management Administration (FEMA) lands, 24 acres of land from other State agencies, and 82 acres of escheat (deeded) lands. PUBLIC AFFAIRS, LEGISLATION & COMMUNICATION SECTION The dramatic growth of the State and its urban areas has increased the need f o r internal as well as external communication. The Department has initiated an active approach toward educating the public/media regarding Trust land revenues as a critical source of funding for Arizonas public schools. The Sections legislative function is r e s p o n s i b l e for maintaining a p r o f e s s i o n a l working relationship b e t w e e n the Department and the L e g i s l a t u r e , and ensuring that the Departments responses to constituent issues and other legislative requests for information are timely, thorough, and accurate. The legislative function further s e r v e s to develop and promote l e g i s l a t i o n that is beneficial to the e f f i c i e n c y of the Departments operations, and to advise the Land Commissioner and Department staff of legislative proposals potentially affecting the Department and its mission. Through both regular sessions of the 45th Legislature, the Department was greatly successful in accomplishing the passage or other implementation of all o f its offered legislation. These important statutory changes include more clearly and accurately reflecting t h e Fire Management Divisions o p e r a t i o n s as necessitated by the nature and timing of emergencies, modernizing numerous aspects of the f r a m e w o r k for the Departments business operations related to real e s t a t e and minerals functions, coordinating and consolidating various u r b a n land planning statutes, and r e v i s i n g and reworking the States statutory land exchange provisions. The Section was also instrumental in assuring the passage of numerous bills and referenda that would have a highly positive effect on the management of State Trust land, while working to defeat all proposed legislation that would have been detrimental to the school land Trust and its mission. D I V I S I O N ACCOMPLISHMENTS Instrumental in bringing two important public policy Trust land measures before voters on the November 2002 ballot: one giving the State public-to-public land exchange authority that would conserve State Trust land, and the other securing supplemental Trust revenues for public education funding. Developing and strengthening an indepth working relationship with the Trusts public education beneficiaries. C o m p l e t e d the initial entry of all settlement or agreement documents (KE-56) involving the Department. Reclassified 13,816 acres of State Trust land as suitable for conservation purposes. C r e a t e d new methods and implemented a number of actions to improve customer relations in response to customer service survey results. R e s p o n d e d to 55,000 customer requests for information relating to Trust lands. Transferred title of 11.43 acres of Surplus (FEMA) land to the Town of Camp Verde for the public purpose of the open space and trail system. Prepared and submitted the required State Indemnity Selection Application and advertisement for the In-Lieu Lands owed to the State. Prepared and submitted the required advertisement for Fort Huachuca on the lands to be acquired by the State under t h e authority of the National Authorization Act of 2000. Concluded negotiations and resolved land issues with the Bureau of Land Management in the transfer of the In Lieu Selection and Fort Huachuca Land Exchanges. P u b l i c relations and media communications Legislative coordination liaison and C o o r d i n a t i o n of administrative hearings, appeals, and litigation issues Coordinates and processes API petitions and land conservation issues Promulgation of rules and policy development. 19 Preface The State Land Department Board of Appeals consists of five board members selected by the Governor and confirmed by the Senate for six-year terms. Three members represent the 15 counties in the State, which is divided into three districts. Two members hold positions-at-large. The Board members are as follows: Sanders K. Solot, Tucson, represents the First District, consisting of Pima, Santa Cruz, Cochise, Graham, and Greenlee counties. William R. Gray, Scottsdale, represents the Second District, consisting of Maricopa, Pinal, Gila, Yuma, and La Paz counties. Norman R. Brown, St. Johns, represents the Third District, consisting of Mohave, Yavapai, Coconino, Apache, and Navajo counties. James M. Webb, Phoenix, and Kathleen M. Holmes, Scottsdale, are members-at-large. A r i z o n a Revised Statute 37-215 requires all land sales and commercial leases to be approved by the Board of A p p e a l s , which also serves as an A d m i n i s t r a t i v e Review Board. Applicants and lessees may appeal to the Board a final decision of the State Land Commissioner that relates to appraisals and classifications. The Board meets once a month unless s p e c i a l circumstances warrant a d d i t i o n a l sessions. Meetings are usually held in Phoenix. This fiscal year, the Board visited Flagstaff to hold m e e t i n g s and to tour various land projects. D u r i n g the fiscal year, the Board a p p r o v e d 45 commercial leases, including eight long-term leases, one for 60 years, one for 65 years, one for 67 years, three for 75 years, and two for 99 years; 96 rights-of-way sales a p p r a i s a l s ; and 34 land sales appraisals, nine of which were urban land sales. The Board denied approval of two land sales, one of which was an Urban Planning Project. Twenty-six new appeals were filed with the Board, with five pending appeals carried forward. Six appeals modified the Commissioners decision. Two appeals sustained the Commissioners decision. 12 appeals were withdrawn and dismissed by the Board. Presently, 11 appeals are still pending. Division Highlights BOARD OF APPEALS REPLACE PICTURE Board of Appeals meeting on October 11, 2001. Preface 20 Division Highlights FIRE MANAGEMENT DIVISION ...preventing and suppressing wildland fires on 9.3 million acres of State Trust land and 13 million acres of private land. The State Forester (the State Land Commissioner) has the authority to prevent and suppress wildland fires on more than 9 million acres of State Trust land and 13 million acres of private land l o c a t e d outside incorporated municipalities. The Land Departments cadre of professional fire management specialists mobilizes firefighters and equipment to and from all parts of Arizona and other states for fire and non-fire emergencies. The Department maintains cooperative agreements with more than 200 local and rural fire departments, other State and Federal agencies, and private companies to control wildfires on State and private lands. The Department also coordinates the mutual aid activities between the rural fire departments within the State and the cooperating Federal agencies. products. Management and harvesting a c t i v i t i e s are designed not only to maximize and sustain income from forest products, but also to enhance wildlife, watershed, range, and open s p a c e values. Another prime management concern is reducing the risk of catastrophic wildfires. The agency also manages the Centennial F o r e s t , in close cooperation with Northern Arizona University for research and education related to forest health, a c r e s of private forest land under management to 1,136,000. More than a thousand acres of State and private lands were treated to reduce hazardous fuels. D I V I S I O N ACCOMPLISHMENTS Training is essential for safe, efficient, and cost-effective fire fighting efforts. The Fire Management Division provided and/or coordinated 36 wildland fire management courses for 168 rural departments this fiscal year. More than 1,100 firefighters were trained in basic w i l d l a n d fire fighting strategy and tactics, fire behavior, urban/wildland interface operations, air operations, and incident command systems. The Division also refurbished and distributed nine excess Federal fire maintenance of natural forest assets and values, and long-term ecological stewardship objectives. The Land Department also provides technical, educational, and financial assistance to private landowners in the management of their forested lands. Forest Stewardship Plans are written and implemented by natural resource professionals to guide landowners in reducing the of risk of wildfire and insect and disease, protecting soil and water quality, providing timber and other forest products, improving fish and wildlife h a b i t a t , and maintaining the l a n d s c a p e s natural beauty. The Department provided management assistance to 893 landowners during the fiscal year, bringing the number of Division Director Kirk Rowdabaugh FOREST MANAGEMENT PROGRAMS State Trust lands include nearly 29,000 acres of ponderosa pine forest near Flagstaff, and approximately 4 million a c r e s of pinyon-juniper and oak woodlands elsewhere. Most of these lands are managed for the sale of forest Section Managers Dave Behrens, Deer Valley Office Scott Hunt, Phoenix District Kevin Boness, Flagstaff District Brian Lauber, Tucson District Al Hendricks, Foresty Programs R e f u r b i s h e d Vehicle Preface 21 e n g i n e s to cooperating rural fire departments. These vehicles are valued at $204,000. Currently, there are 155 refurbished fire fighting vehicles in rural fire departments Statewide. The Department has contracts for 20 heavy trucks for future retrofitting, and these a l o n g with the equipment already provided to cooperating fire departments are worth nearly $7,500,000. Twentyfour rural fire departments also received three refurbished hand-held radios each; these 72 radios are worth just over $85,000. The Division also secured 38 State Fire A s s i s t a n c e Grants for more than $2,000,000 to assist with developing a n d implementing hazardous fuel reduction plans in communities-at-risk. An additional $709,000 in Volunteer and R u r a l Fire Assistance Grants was d i s t r i b u t e d to assist 66 rural fire d e p a r t m e n t s with training and Division Highlights equipment. The Division also p r o c e s s e d orders for rural fire departments for fire fighting supplies and e q u i p m e n t from the U.S. General Services Administration valued at more than $250,000. FUTURE GOALS Assist private landowners in the wildland/urban interface t o reduce the risk of loss from wildfire. Educate and encourage rural residents to protect their property from wildfire. Help prepare local fire departments and develop local zoning and fire codes. Mitigate potential losses due to wildland fires in the urban interface. Implement fuel hazard reduction programs on State and private lands in the wildland/urban interface. Reduce the accumulation of natural vegetation and fuels a r o u n d homes and subdivisions in the interface in a cooperative effort with our Federal partners. Provide eight to 10 excess Federal wildland fire trucks to cooperating fire departments each year. T r a i n firefighters from cooperating local rural fire departments in wildland fire suppression strategies and tactics through cooperative programs with the State Fire Marshals Office, other State and Federal agencies, and inhouse courses. Encourage and assist with developing an interagency dispatching system that will make more efficient use of fire suppression resources. Provide assistance to the Department of Emergency and Military Affairs and other State and Federal agencies to prevent and suppress wildfires and manage other non-fire emergencies. Provide prompt cost repayment of expenses incurred for the suppression of wildfires on State-protected lands to cooperating agencies and persons. Providing fire protection to rural Arizona is becoming increasingly more difficult. Much of Arizonas recent p o p u l a t i o n growth and home building activity have occurred in rural and previously undeveloped areas. Decades of wildland fire suppression and historic land use activities have led to increasing fuel accumulations, allowing fires to burn hotter, faster, further, and more frequently. Wildfires are becoming more expensive to suppress and are a greater risk to the States natural resources, its citizens, and their property. The Land Department will continue to be proactive and innovative in meeting its ever-increasing wildland fire management responsibilities. Preface 22 Despite record drought and unprecedented fire potential, 98 percent of all fires were controlled at 100 acres or less. However, fire losses were extraordinary this year; 520 fires burned nearly 40,000 acres on State and private lands. The Agency also supported Federal agencies with another 250 fires, including the Rodeo/Chediski, Bullock, and Indian fires. More than 31,000 citizens were evacuated and 600 of the nearly 23,000 structures threatened by wildfire were lost. Division Highlights ADMINISTRATION AND RESOURCE ANALYSIS DIVISION T h e Administration and Resource Analysis Division is responsible for the a d m i n i s t r a t i v e functions of the D e p a r t m e n t . The Division is also r e s p o n s i b l e for managing the Departments computerized business and administrative systems, managing Geographic Information Systems (GIS) systems, and administering the Arizona Land Resource Information System (ALRIS) and the State Cartographers Office (SCO). T h e business and administrative s y s t e m s are designed to provide automated capabilities for processing data related to ownership, title, sales, and lease transactions, as well as f i n a n c i a l operations and internal accounting for the Department. The ALRIS Program was established by the Legislature to provide a GIS service center for government agencies in Arizona. ALRIS maintains a GIS facility, creates and maintains data layers, provides training, transfers data, and provides technical assistance. T h e SCO was created by the Legislature to provide the framework for a coordinated development of GIS t e c h n o l o g y in Arizona through the development of standards, facilitation of cooperative efforts, and improvement of access to geo-spatial databases. ALRIS and the SCO work closely with the Arizona Geographic Information Council (AGIC) and provide it with technical support. AGIC is a multia g e n c y, multi-government council responsible for determining areas of s t a n d a r d i z a t i o n and facilitating c o o p e r a t i v e data and system development for GIS. D I V I S I O N ACCOMPLISHMENTS The Division experienced an extremely busy year and has several notable accomplishments in both the fiscal and computer systems areas. DEPARTMENT WEBSITE The Division coordinated the redesign of the Agencys Website. The new Website provides a significant amount of information about the Agency and its activities and provides an interactive map service that allows anyone with access to the Internet to view locations o f Arizona State Trust lands and Federal public lands. A valuable feature f r o m our marketing program is information on upcoming sales and leases. The beneficiaries, especially the schools, have provided very positive feedback on the easy accessibility to Department information and activities that are of interest to them. ACCOUNTING SECTION The Department received a clean financial audit for the fifth consecutive year. This is a significant accomplishment g i v e n the complexity of the Departments financial structure and the fact that close to $100 million in revenue from leases and sales is processed annually. FORESTRY/FIRE FISCAL SECTION The Department received close to $3 million in new Federal funds for fuels treatment projects and other grant projects intended to improve Arizonas capacity to respond to wildland fires. In order to accommodate this additional funding, the Section was required to set up additional accounting structure and work process. Another challenge the Section faced was the increased workload due to the worst wildland fire year in Arizona history. The Section saw a dramatic increase in accounts payable, payroll transactions, fire cost estimating, and pre-positioning costs. I N F O R M AT I O N SECTION (ITS) TECHNOLOGY ...responsible for the administrative functions of the Department, including the computer information systems. The Agency has a totally automated W i n d o w s - b a s e d business system (OASIS), programmed in Oracle, which is accessed on desktop PCs. Both Department employees and private sector firms, such as title companies, use the system extensively. The IT Section Manager and the CIO completed the conceptual design for the next major upgrade of the Agencys i n f r a s t r u c t u r e , servers, network b a c k b o n e , Oracle databases, PC hardware, and application software. The Project Information Justification (PIJ) has been submitted to the Government Information Technology Agency (GITA) for review and approval. The major goals of the system upgrade are to expand s y s t e m capacity to deal with the planned additional GIS databases; the conversion of OASIS (Oracle business system) from client server to the Web; the development and implementation of I n t e r n e t - b a s e d applications; the upgrade of the PCs and network to handle the expanded capacity of the GIS applications and data; and the r e p r o g r a m m i n g and conversion of Business System and GIS applications to new versions of Oracle, Arc Info, and Arc View. Converting to browser-based Division Director Lynn Larson Section Managers Dave Bee, Accounting Roy Myhlhousen, Forestry/Fire Fiscal Bill Reed, Information Technology Gary Irish, Geographic Information Systems Eugene Trobia, State Cartographers Office Preface 23 a p p l i c a t i o n s will advance the Governors direction to agencies to improve service to customers through expanding the information and services available to the public and businesses t h r o u g h the Internet. The Internet applications will also greatly expand the ability of Land Department staff to conduct their field work and provide information to lessees in the field. The Parcel and Land Mapping System (PALMS), which is the system that provides access to GIS data, including business system data, has been fully deployed. The Section designed and implemented a Disaster Recovery Server that is located off site and that will enable the D e p a r t m e n t to continue its critical business functions the next day if an emergency occurs. The system backup procedures were also enhanced. The OASIS business system, all office automation files, and the cadastral databases would all be available on the offsite Disaster Recovery Server. In the event that the Department could not a c c e s s the main office, critical functions such as billing, receiving receipts, work on critical lease and sales projects, auctions, etc. could continue. T h e Section completed several upgrades (including the Corel Suite to 2002), replaced and re-engineered the Uninterrupted Power Supply (UPS), and upgraded color printers and hi-speed business printers. The Section also c o m p l e t e d an upgrade to all applications, software, and hardware for the Drainage Section. STATE CARTOGRAPHERS OFFICE The State Cartographers Office (SCO) hosted over 200 attendees at the AGIC 2002 GIS Conference in Mesa during A u g u s t 2002. The Office has c o o r d i n a t e d the development and dissemination of Digital Ortho Quarter Quads (DOQQs), which cover all of Division Highlights GENERAL FUND APPROPRIATION & TRUST REVENUE 2 0 02 2 0 01 2 0 00 1 9 99 1 9 98 1 9 97 FUTURE GOALS The Forestry/Fire Fiscal Section will review the program to ensure that adequate accounting controls and procurement procedures are in place. As activity and funding for the Fire program grows, it becomes more important to ensure that the Department is in compliance with all State and Federal laws, regulations, and policies. The ITS will implement the conceptual design plan for the s y s t e m upgrade, which will include procurement, engineering, and deployment of a gigabit ethernet backbone; upgrading and migrating to Oracle 9; upgrading to Novell 6; u p g r a d i n g the Novell servers; upgrading to Solaris 9; replacing and upgrading the Sun servers; replacing all desktop PCs and operating systems; reprogramming OASIS applications; building an internal information portal; and implementing Internet applications, including the public counter. The SCO will enhance the GeoServer Website to include local survey control data. The SCO will continue to pursue the use of Websites as a way to improve access to GIS data for public agencies. The SCO is working closely with public safety, emergency response, justice, health, and executive agencies to develop GIS data and applications to address the public safety, health, and welfare needs of Arizona and to c o n t r i b u t e to State Homeland Security. The SCO also continues to coordinate with State, Federal, regional, and local agencies and organizations to develop and improve access to geo-spatial databases in Arizona. The GIS Section will develop a plan for and initiate a major upgrade of the PALMS application during the coming fiscal year. It will also develop additional parcel layers for PALMS. Support for the API and the Growing Smarter project will continue during the coming fiscal year. Many of the data sets developed by these projects will then be incorporated into PALMS for widespread access throughout the Department. The GIS Section will also continue the development of the Internet map server to provide interactive mapping services that show the locations and aspects of State Trust lands that are of interest to the public. In the coming fiscal year, the ALRIS program will continue to distribute spatial databases to customers throughout Arizona. In the upcoming fiscal year, the program will the convert its database documentation to the Federal Geographic Data Committee national standard format. 1 9 96 1 9 95 1 9 94 1 9 93 1 9 92 0 20 40 60 80 100 120 140 160 D ol l a rs (Millio n s ) G e n e ra l F u n d Appropriation T r u st R e v e nu e s Only the Department of Revenue and the Arizona Lottery generate more revenue than the State Land Department. 24 Preface Arizona. The DOQQs are available in c o m p r e s s e d format (.ECW) to all agencies of the State. The SCO also developed the GeoServer Website to provide survey control data to surveyors and the GIS community. The SCO c o n t i n u e s to sponsor a National Geodetic Survey State Advisor to assist in the development of geodetic control for use by public agencies in Arizona and the Southwest region. The SCO is also working with State universities t o develop Websites that provide access to GIS data and GIS services for State agencies. The office is also coordinating with AGIC and GITA to develop State GIS data standards and GIS Web services for the public. GEOGRAPHIC INFORMATION SYSTEMS The Geographic Information Systems Section provides GIS products (such as GIS databases, maps, tabular data sets, and GIS software) for assisting Department staff and management with analyzing and managing State Trust lands. This past year the Section completed placement of the PALMS e n t e r p r i s e GIS system on staff d e s k t o p s and conducted training classes in the use of the system for Department staff. Several advanced PALMS classes were also developed and the Section began offering those to Department staff. Many quality and performance enhancements were made to the PALMS system, and several major new capabilities (including the a b i l i t y to access digital aerial p h o t o g r a p h y ) were added to the system. The Section also continues to provide mapping and analysis support for the Arizona Preserve Initiative and the State-Federal land transfer program. During this past year the GIS Section actively worked with other Department work units and Department consultants to continue developing GIS databases t o support the development of conceptual plans for priority urban State Trust lands as part of the Departments Growing Smarter project. The first conceptual plan for State Trust lands was completed for the Peoria area this past year and inserted into the PALMS a p p l i c a t i o n for access by all Department staff. T h e GIS Section also houses the A L R I S Program, which provides Statewide support for public agencies i n Arizona in the area of GIS t e c h n o l o g y. During the past year, ALRIS distributed 1,628 sets of GIS data (a 25% increase) from its geos p a t i a l data library to program c u s t o m e r s throughout the State, providing benefits to a variety of public agencies and private organizations in Arizona. This past year, ALRIS staff continued to maintain and enhance several of its geo-spatial databases. A major new data set, the 2000 Census Geographic files, was developed and prepared for distribution to GIS users. ALRIS completed initial development and deployment of its first interactive Internet mapping service this past year. This Web-based service allows anyone with access to the Internet to view the locations of Arizona State Trust lands and Federal public lands. Preface 25 INTERNET MAPPING SERVICES During this past fiscal year, the Department developed an initial capability to deploy interactive maps over the Internet This new technology, utilizing Web-based map services, allows the public in Arizona, or anyone in the world, to access portions of the Departments GIS data in an interactive manner from their own desktops if they have a connection to the Internet. During this past year, the Department developed and deployed two Internet-based interactive mapping systems. Both systems allow the user to pan and zoom around the maps, add and delete map layers, and obtain information about the features on the maps by pointing and clicking the mouse cursor on the features. Users can select certain geographic features based on their attributes and then zoom the map image to their selected locations. The systems also include capabilities to create simple maps that can be sent to the users home printer. The two systems are described below. ARIZONA LAND OWNERSHIP MAP The Arizona Land Ownership Map provides users access to the locations of State Trust lands and Federal lands throughout Arizona. The users of the system can select common geographic features such as city and county boundaries, roads and streams, and towns to be shown on the map along with the land ownership data. The public land survey system, townships, ranges, and sections can also be shown, giving the user a key locational identifier to help in determining where lands are located. The system provides users a valuable tool to locate State Trust Lands and Federal public lands. Before the deployment of the Arizona Land Ownership Map, users had to purchase paper maps from the Department or from federal agencies to determine where these lands were located. This system can be accessed through the Departments Web page under the Maps button or by entering http://sco.az.gov/ website/arizona in the browsers URL window. ARIZONA GEOSERVER The Arizona GeoServer is an Internet-based service that provides access to geodetic coordinate control data developed by agencies participating in the Arizona Geographic Information Councils (AGIC) efforts to develop an integrated and shared public land survey system and common sets of geodetic control for integrating GIS databases between various levels of governments in Arizona. The system was created to provide efficient, effective, and timely access to coordinate control data, which is defined here as monumented locations on the ground for which coordinates have been assigned. This definition includes data such as horizontal and vertical geodetic control and can include section corners. Through the use of common geodetic control, public agencies in Arizona will be able to create and manage GIS systems in which data fits together spatially. The GeoServer provides access to such data and is a key component in AGICs strategy to increase GIS data integration and the ability to share commonly needed and used GIS data throughout Arizona. The Arizona GeoServer can be accessed through the AGIC Website maintained by the Land Department at http://www.land.state.az.us/agic/agichome.html or by entering http://sco.az.gov/website/geoserver in the browsers URL window. ARIZONA LAND OWNERSHIP MAP INTERNET SERVICE GEOSERVER INTERNET SERVICE The image above shows how the Arizona Land Ownership Map Service appears within the users Web browser interface. In this view the user utilized the set of map tools on the left side of the image to zoom into the map in the Carefree area. The map image shows the locations of State Trust and other land owners in the area along with the major roads and streets. The map also contains the township, range, and section lines. The right part of the image contains a scrolling legend for the features shown on the map. This image also shows a record listing for a location on the map where the user clicked first on the "identify" tool (the "I" icon on the toolbar) and then clicked on the map. The mapping service then returned a record providing information about that location for the "active" theme, in this case the land ownership theme. The user could use other tools to switch the "active theme" to another theme that appears on the map and obtain information about that theme. The image above shows how the GeoServer appears within the users Web browser interface. In this view the user is displaying National Geodetic Survey (NGS) control points in the downtown Phoenix area. A legend for the map also appears, and if the user clicks the mouse on the "identify" tool shown above the map and then on one of the displayed points, a record from the point data-base will appear in a listing to the left of the map image window. In this case the name of the point is "Phoenix st capital bldg dome." The PID attribute shown in the record is the NGS point identifier. If the user clicks on the point identifier, then a process is initiated on an NGS server and the NGS point data sheet is displayed in a separate browser window (not shown on this example). Thus the GeoServer provides access to the point locations in a map format and also access to the complete NGS record for that point. The GeoServer also includes an extract capability to allow users to select sets of points and download them to their computers. The download points are in GIS format and contain point locations and associated attribute records that contain a subset of the NGS full record, including the point coordinates in latitude and longitude, date, condition, monument status, and recording agency. Preface 26 Beneficiary Summary METHODS OF ACQUISITION Arizona has acquired these lands in four types of transactions: DETERMINATION OF STATE TRUST LAND LOCATION 1. School Sections in Place: As land surveys were completed by the Federal government, title to four school sections in each township Sections 2, 16, 32, and 36 automatically passed to the State. 2. Indemnity in Lieu Selections: When school section lands were not available to the State because they had been previously claimed by homesteaders or miners or because they fell within a Federal reservation for a national forest, park, or Indian reservation, the State was given the right to select an equal acreage of Federal public domain land as indemnity in lieu of the school sections the State should have received. 3. Quantity Grant Selections: The State selected the specified acreage of Federal lands for the County Bonds and e a c h of the individual institutional Trusts. 4. Land Exchanges: After acquiring title to the Trust lands, the State traded many of the lands for other Federal or private lands of equal value in order to relocate and block up Trust land holdings. The State acquired its School Sections in Place wherever the land surveys placed them. The State chose the lands acquired in the Indemnity in Lieu Selections, Quantity Grant Selections, and Land Exchange processes. These choices were made by the State Selection Board, which consists of the Governor, State Attorney General, and State Land Commissioner. The Land Commissioner in recent years has been replaced on the Board by the State Treasurer. Most of the selections were made in the 1915-1960 era, with the selection program being finally completed in 1982. Since the State was precluded by Federal laws from acquiring mineral lands, and since the homesteaders had already acquired most of the potential agricultural lands, the State focused on choosing the best grazing lands. Most of the acreage chosen Determination of Beneficiaries and Acres At the time of statehood, Arizona was granted nearly 10.8 million acres to be held in trust for lease and sale to produce revenues for the support of public schools and other public institutions. An 1881 Act had already granted the Territory of Arizona about 60,000 acres for the University of Arizona Grant. A 1929 Act authorized an additional 50,000 acres for the Miners Hospital Grant. This brought the total Trust grants to over 10.9 million acres. These Trust grants are: Acres * Common Schools Grant University Grant Legislative, Executive, & Judicial Building Grant Penitentiary Grant State Hospital Grant School for the Deaf & Blind Grant Miners Hospital for Disabled Miners Grant Normal Schools Grant Charitable, Penal, & Reformatory Institutions Grant Agricultural & Mechanical Colleges Grant School of Mines Grant Military Institute Grant County Bond Grant Total *Approximate 8,400,000 200,000 100,000 100,000 100,000 100,000 100,000 200,000 200,000 150,000 150,000 100,000 1,000,000 10,900,000 Preface 27 during the 1915-1960 era was in central and southeastern Arizona, and in the checkerboard land area along the railroad across north-central Arizona. As agriculture developed in Arizona, later selections were made in irrigated areas in the Harquahala Valley and the Gila River Valley. The final selections concentrated on commercial and agricultural lands along the Colorado River. Land exchanges in the 1935-1985 era relocated most of the school section lands out of the western deserts and into areas close to Phoenix and Tucson and into better grazing lands in such areas as western Yavapai County. east sides of the Tucson metropolitan area is divided amongst the various institutional Trusts. The University of Arizona Trust owns a large amount of timbered land acreage in the Flagstaff area and agricultural lands near Yuma. However, the majority of the acreage in the other individual institutional Trusts are rural grazing lands. Some agricultural potential is located primarily in Cochise County; the Altar Valley of Pima County; the Picacho, Red Rock, Oracle Junction, and Florence areas of Pinal County; the St. Johns and Springerville areas of Apache County; and the checkerboard areas of western Coconino and Yavapai counties. In the 90 years since statehood, the State has disposed of about 1,633,844 acres of Trust lands. A total of 9,266,156 acres of Trust Land remains. Almost all of the lands are under one or more leases for natural resource uses and commercial development purposes. About 87 percent of the Trust lands are in the Common School Grant and approximately 90 percent of the Trust revenues go to that Grant. is greater than the acreage in each grant because in many cases, there is more than one lease on the same parcel of land. No description is given of the County Bond grant lands, because now that the bonds have been paid, the revenues from these grant lands go into the Common Schools Grant. Included on page 49 of this publication is a map of Arizona with all Trust lands identified by the owning Trust beneficiary. Beneficiary Summary LOCATION OF STATE TRUST LAND Most of Arizona Trust lands are currently usable only for livestock grazing purposes. Fortunately, several hundred thousand acres of these grazing lands have become urban lands as Phoenix, Tucson, and other cities and towns have expanded. The Urban Lands Act, passed in 1981, enabled the Trust to capitalize on the large increase that planning and zoning adds to raw land values. Today the Land Departments urban lands lease and sale program is the largest revenue producer for the Trust. Nearly all of the most valuable urban Trust lands around the northern border of the Phoenix metropolitan area and north and west of Tucson are Common Schools Trust lands. The large block of Trust lands on the south and south- Today, the original school section pattern exists only in a few locations such as the remote Arizona Strip. About three-quarters of the school section acreage were relocated through selections and exchanges that have consolidated the Trust lands into large blocks in Pinal, Pima, Graham, Greenlee, and Cochise counties in central and southeastern Arizona; north and northwest of Phoenix in Maricopa and Yavapai counties; and in the checkerboard railroad grant zone across Mohave, Yavapai, Coconino, Navajo, and Apache counties. DESCRIPTION OF INDIVIDUAL GRANTS Descriptions of the Trust lands in the individual institutional grants follow. The acreage cited in the different land areas is only approximate. However, the data will give some indication of the income potential of the individual Trust resources. The total acreage of the lease categories listed for each grant Preface 28 Land Endowment by Township Township = 36 Sections Each Section = 1 Square Mile Beneficiary Summary COMMON SCHOOLS GRANT The Common, or Public, Schools Grant land comprises about 87 percent of the T r u s t land holdings and totals 8,102,553 acres. Most of the Common Schools lands are grazing lands scattered throughout the rural areas of the State. The original four-school-sectionper-township land pattern still exists in a few places like north of the Grand Canyon on the remote Arizona Strip, but most of the Common Schools lands have been relocated and consolidated by land selection and exchanges. The largest concentrations of acreage are: The Common Schools Trust also holds most of the highest value and developable Trust lands. Included are: Several hundred thousand acres of urban Trust lands in the north Phoenix and Scottsdale areas and around the northern border of the Tucson metropolitan area; More than 100,000 acres of agricultural lands throughout the State; Lease & Sale Highlights: City of Phoenix API Land Sale 53-106375-35 765.32 Acres $12,245,000 Edmonds-Toll Construction Co. Land Sale Down Payment 53-105241-00 779.96 Acres $6,630,000 BCW INC Mineral Lease 04-103379-00 81.09 Acres $385,960 In the Bagdad, Yarnell, and Wickenburg areas of western Yavapai and Maricopa counties; In the checkerboard land area along Interstate 40 across north-central Arizona and near Kingman, Seligman, Winslow, Holbrook, and St. Johns; Between Florence and Oracle in southeastern Pinal County; Along the San Pedro River Valley between Benson and Winkelman; and In the Klondyke area of southwestern Graham County. 160 Two major copper deposits in the Tucson and San Manuel areas; and Commercial properties along the Colorado River in the Yuma, Ehrenberg, Parker, Lake Havasu City, Topoc, and Bullhead City areas. TRUST LAND INCOME FY 1982-2002 140 120 100 80 60 40 20 0 83 82 84 85 86 87 88 89 90 91 92 93 94 95 96 Pe rm an e n t Fund Interest 97 98 99 2000 2001 2002 P e rm an e n t Fund Received R e nt & Interest Received Preface 29 ACRES AND INCOME FY 2002 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE SUBSURFACE LEASES Mineral Exploration Permit Mineral Material Oil & Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest Sales Interest School Leases Treasurers Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance 16,038 24,227 9,877 331,264 8,447 389,853 $7,349.95 $26,881.86 $151,286.54 $448,358.28 $0.00 $633,876.63 $73,977.46 $9,901,338.79 $7,250.00 $54,781,906.00 $85,885,900.90 $46,747,852.92 $982,851,000.00 30 Preface ACRES 127,993 22,638 7,395,099 105 126,925 189,410 0 5,406 8,448 0 7,876,024 INCOME $2,228,193.87 $8,749,719.71 $2,161,967.26 $18,830.00 $5,080,409.36 $1,641,407.42 $0.00 $118,036.04 $159,981.99 $329,006.37 $20,487,552.02 Beneficiary Summary Lease & Sale Highlights: Arizona Public Service Rights-of-Way 14-106003-00 1.94 Acres $398,885 56th Street AXP Campus LLC Commercial Lease 03-105713-99 90.82 Acres $872,865 Talley Defense Systems Inc. Commercial Lease 03-093792-65 221.65 Acres $472,299 Beneficiary Summary LEGISLATIVE, EXECUTIVE, AND JUDICIAL BUILDINGS There are 64,257 acres in the Legislative, Executive, and Judicial Buildings Land Grant. These lands consist of primarily rural grazing lands, with some parcels having agricultural, commercial, and mineral material potential. The largest concentrations of grazing lands are 12,000 acres in the Altar Valley southwest of Tucson; 10,000 acres near Bonita in Graham County; 5,000 acres east of the Picacho Mountains in Pinal County; and 4,000 acres of checkerboard lands west of Seligman in Yavapai County. Other holdings are located as follows: 4,000 acres near Willcox in Cochise County; 1,000 acres near Marana in Pima County; 3,500 acres near Florence in Pinal County; 4,000 acres near Mohawk in the Gila River Valley of Yuma County; and 4,000 acres near Gleason in Cochise County. Probably the most valuable lands are the 5,300 acres on the southern border of the Tucson metropolitan area; 3,700 acres at Colossal Cave in Pima County; 800 acres at Picacho Peak in Pinal County; and 4,000 acres in scattered parcels in the Douglas area of Cochise County. SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE ACRES AND INCOME FY 2002 ACRES 2,180 87 55,546 0 1,689 5,062 0 0 0 0 64,564 0 639 0 0 0 639 INCOME $23,241.79 $26,709.00 $23,780.94 $0.00 $14,480.43 $1,284.72 $0.00 $0.00 $0.00 $0.00 $89,496.88 $0.00 $639.32 $0.00 $0.00 $0.00 $639.32 $2,218.03 $0.00 $366,999.00 $459,353.23 $583,932.10 $4,970,000.00 SUBSURFACE LEASES Mineral Exploration Permit Mineral Material Oil and Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest Sales Interest Treasurers Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance Lease & Sale Highlights: Western States Microwave Trans Commercial Lease 03-087097-00 3.67 Acres $15,000 City of Tucson Land Sale 53-104509-00 146.95 Acres $582,003 TRUST LAND INCOME FY 1982-2002 2 .5 2 1 .5 1 0 .5 0 83 82 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 2 000 200 1 20 02 P erm a nen t Fund Received R en t & Interest Received P e rm an en t Fund Interest Preface 31 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE ACRES AND INCOME FY 2002 ACRES 5,327 261 60,668 0 1,134 4,923 0 80 0 0 72,393 60 0 0 0 0 60 INCOME $104,855.29 $143,482.73 $24,119.86 $0.00 $11,835.05 $3,974.99 $0.00 $1,468.50 $0.00 $0.00 $289,736.42 $600.00 $0.00 $0.00 $0.00 $0.00 $600.00 $356.52 $0.00 $99,864.00 $390,556.94 $349,501.99 $3,240,000.00 The State Hospital Grant lands consist of 71,249 acres, primarily blocks and checkerboard grazing lands in Pinal, Pima, Cochise, and Yavapai counties. The largest concentration of grazing lands totals about 15,000 acres in the checkerboard area of Yavapai County west of Paulden; 9,000 acres in the Altar Valley southwest of Tucson in Pima County; 7,000 acres near Gleason; and 6,000 acres in the San Bernardino Valley in Cochise County. Lands with some agricultural as well as grazing potential include 5,000 acres in the Magma area and 9,000 acres near Picacho in Pinal County; 1,200 acres near San Simon; and 6,000 acres near Bonita in Graham County. There are scattered land parcels with some development potential near Prescott in Yavapai County, Topock and Littlefield in Mohave County, and Cave Creek in Maricopa County, and a 4,800acre block near Sahuarita in Pima County. Beneficiary Summary STATE HOSPITAL GRANT SUBSURFACE LEASES Mineral Exploration Permit Mineral Material Oil and Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest Sales Interest Treasurers Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance Lease & Sale Highlights: Phoenix Golf School Commercial Lease 03-097540-00 44.74 Acres $94,444 Pinal County Perpetual Rights-of-Way 16-103113-00 34.45 Acres $331,052 OASIS Recreational Properties Commercial Lease 03-095873-00 140.91 Acres $42,294 TRUST LAND INCOME FY 1982-2002 2 1. 5 1 0. 5 0 83 82 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 2 000 2 001 2 002 Pe rm an ent Fund Received R en t & Interest Received P erm an en t F und Interest Preface 32 Beneficiary Summary MINERS HOSPITAL The 1912 Miners Hospital for Disabled M i n e r s Grant, consisting of 47,771 acres, and the 1929 Miners Hospital Grant, consisting of 47,687 acres, are combined for reporting purposes because they support the same beneficiary. The grant lands are more dispersed (and in some areas there is more development potential) as compared to most of the other quantity grants. This fact is reflected in the higher agricultural, commercial, and special-use revenues from these grant lands. The 1912 grant consists primarily of blocks of grazing lands in seven areas: 11,500 acres near Picacho Peak and 10,000 acres in the Florence Junction a n d Magma areas of Pinal County; 1,800 acres near Skull Valley in Yavapai County; 3,800 acres near Vail in Pima County; 5,400 acres north of the S a n Francisco Peaks in Coconino C o u n t y ; 6,200 acres near Bonita in Graham County; and 5,100 acres near Gleason in Cochise County. Some of the Picacho Peak, Vail, and Magma area lands have commercial and agricultural potential. SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE ACRES AND INCOME FY 2002 ACRES 13,826 590 73,875 8 2,000 3,054 0 1 0 0 93,354 INCOME $370,941.83 $702,976.15 $28,366.35 $2,500.00 $15,785.04 $40,292.95 $0.00 $798.82 $0.00 $277.14 $1,161,938.28 $74.54 $145.37 $0.00 $0.00 $0.00 $219.91 $8,648.05 $1,250.74 $307,779.00 $1,479,835.98 $619,311.16 $5,355,000.00 SUBSURFACE LEASES Mineral Exploration Permit Mineral Material Oil and Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest Sales Interest Treasurers Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance 119 225 0 0 0 344 Lease & Sale Highlight: Talley Defense Systems Inc. Commercial Lease 03-093792-65 312.10 Acres $665,032 The 1929 grant consists of smaller parcels scattered throughout nearly all of the counties. Many small but valuable parcels have development potential, particularly in the Casa Grande, Mesa, San Luis, Topock, Lake Havasu City, Buckeye, and Mammoth areas. The Trust also owns a partial interest in Colorado River-front lands at Bullhead C i t y. The States Enabling Act was amended in 1999 to allow for the long-standing practice of and to clarify the legality of sending money earned from the Miners Hospital Grant to the Pioneers Preface 33 Home. TRUST LAND INCOME FY 1982-2002 2.5 2 1.5 1 0.5 0 83 82 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 2000 2001 2002 Permanent Fund Received Rent & Interest Received Permanent Fund Interest SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE ACRES AND INCOME FY 2002 ACRES 3,682 2,812 63,196 0 1,917 7,039 0 475 0 0 79,121 INCOME $66,818.16 $344,469.70 $26,019.60 $0.00 $22,224.60 $38,334.68 $0.00 $53,626.35 $0.00 $3,397.00 $554,890.09 $120.00 $0.00 $0.00 $1,268.37 $0.00 $1,388.37 $4,020.60 $0.00 $891,235.00 $1,451,534.06 $4,726,523.12 $26,551.000.00 The State Charitable, Penal, and Reformatory Grant lands, totaling 77,669 acres, are shared by the Department of Corrections, the Department of Youth Treatment and Rehabilitation, and the Pioneers Home as beneficiaries. This acreage includes a mix of agricultural and commercial properties along with the usual dominance of grazing lands. Potential development lands include: 1,700 acres in the Deer Valley and Surprise areas of the Phoenix metropolitan area; 600 acres along Irvington Road in southeast Tucson; 10,000 acres in the Picacho, Red Rock, and Marana Airport area of Pinal County; 6,200 acres south of Tucson; 480 acres near Casa Grande; and 760 acres in the Butler Valley groundwater storage area in La Paz County. Over 2,700 acres of these Trust lands at Florence and Fort Grant are leased for prison facilities. The Trust also owns a partial interest in lands that surround the Patagonia Lake State Park. Grazing lands include 13,000 acres in the San Bernardino Valley in Cochise County; 7,000 acres in the Bonita and Willcox areas of Graham and Cochise counties; 8,000 acres in the Empire Cienega Ranch in southeast Pima County; and 7,500 acres in the Altar Valley of Pima County. The grant also has 3,200 acres of checkerboard grazing lands in Coconino County; 1,200 acres near Oracle Junction; 7,500 acres near Florence Junction in Pinal County; and 2,500 acres of scattered parcels in the Dragoon and Gleason areas of Cochise County. 2 0 02 Beneficiary Summary SUBSURFACE LEASES Mineral Exploration Permit Mineral Material Oil and Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest Sales Interest Treasurers Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance STATE CHARITABLE, PENAL, AND REFORMATORY Lease & Sale Highlights: Barclay Group Commercial Lease 03-105514-99 22.24 Acres $111,750 Vincent Morano Land Sale 53-106992-00 105.54 Acres $710,000 Harrison-Irvington Properties Commercial Lease 03-089865-65 119.00 Acres $99,298 160 0 0 1,268 0 1,428 TRUST LAND INCOME FY 1982-2002 7 6 5 4 3 2 1 0 83 82 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 2 0 00 2 0 01 Perm anent Fund Received Rent & Interest Received Perm anent Fund Interest Preface 34 Beneficiary Summary PENITENTIARY GRANT Most of the 76,334 acres in the Penitentiary Grant are primarily grazing lands in blocks or groups of checkerboard sections in some of the more productive ranching areas of the State. More than 9,000 acres are located in the Altar Valley between Three Points and Sasabe in southern Pima County. Elsewhere, holdings of 1,000 to 8,600 acres in size are located near Sierra Vista, Pearce, and Douglas in Cochise County; north of Florence and east of Picacho Peak in Pinal County; near Paulden in Yavapai County; in Valentine in Mohave County; and west of Williams in Coconino County. Some Penitentiary Grant lands are leased for agriculture, with the largest area being nearly 2,000 acres several miles northeast of Yuma. These lands are additions to the old Yuma Prison Grant that was given to the State in the 1890s for a garden for the prison. Today, this is a productive farm area. SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE ACRES AND INCOME FY 2002 ACRES 4,391 472 66,155 0 595 5,762 0 1,778 0 0 79,153 0 40 0 0 0 40 INCOME $174,503.05 $508,000.62 $23,307.64 $0.00 $2,547.45 $38,496.59 $0.00 $0.00 $0.00 $17,100.00 $763,955.35 $0.00 $40.00 $0.00 $0.00 $0.00 $40.00 $2,571.16 $0.00 $169,813.00 $936,379.51 $109,548.69 $4,934,000.00 SUBSURFACE LEASES Mineral Exploration Permit Mineral Material Oil and Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest Sales Interest Treasurers Formula Distribution GRAND TOTAL EXPENDABLE Permanent Fund Receipts Permanent Fund Balance Lease & Sale Highlight: Perhaps the most valuable Penitentiary Grant lands are two parcels in the Phoenix metropolitan area, one south of Tucson and one near Globe. They are leased for the Perryville, Santa Rita, and Rincon prisons and the Adobe Mountain and Pinal Mountain juvenile correction facilities. TRUST LAND INCOME FY 1982-2002 5 4 3 Arnott Duncan Agricultural Permit 23-105725-01 1,283.33 Acres $35,693 2 1 0 83 82 84 85 86 87 88 89 90 91 92 93 94 Permanent Fund Interest 95 96 97 98 99 2000 2001 2002 Permanent Fund Received Rent & Interest Received Preface 35 SURFACE LEASES Agriculture Commercial Grazing Homesite Rights-of-Way Use Permits Public Education Institutional Taking U.S. Government Other TOTAL SURFACE ACRES AND INCOME FY 2002 ACRES 165 22,538 146,186 0 2,240 5,804 0 2,721 40 0 179,694 0 0 40 2,062 40 2,142 INCOME $3,087.84 $42,384.20 $56,126.74 $0.00 $4,028.25 $5,642.12 $0.00 $0.00 $2,000.01 $1,098 |
