ARIZONA STATE LAND DEPARTMENT ANNUAL REPORT 2009 - 2010 Janice K. Brewer Governor Maria Baier State Land Commissioner “Serving Arizona’s Schools and Public Institutions Since 1915” Contents Message From the Commissioner........................................................................................ 1 Historical Overview ............................................................................................................... 3 Organizational Chart............................................................................................................. 5 NRCD Environmental Education .......................................................................................... 6 Major Transactions and Leases ........................................................................................... 7 Cooperating to Secure Arizona’s Borders ............................................................................ 8 Five Year Plan ...................................................................................................................... 8 Mineral Leases ..................................................................................................................... 9 303 and I-17 Progress ........................................................................................................ 10 Looking Back: Richard Oxford............................................................................................ 11 Preserve Land .................................................................................................................... 12 Wind Developments............................................................................................................ 13 Palisene .............................................................................................................................. 13 Arizona Preserve Initiative Reclassification........................................................................ 15 Board of Appeals ................................................................................................................ 16 State Trust Land Uses ........................................................................................................ 17 Land Ownership and Management .................................................................................... 18 Fiscal Year 2010................................................................................................................. 20 Permanent Fund ................................................................................................................. 22 Expendable Revenue ......................................................................................................... 23 Fund and Beneficiary Summary ......................................................................................... 24 Common Schools K - 12 ................................................................................................ 25 University Grants ........................................................................................................... 27 Other Grants .................................................................................................................. 31 Financial Schedules............................................................................................................ 34 Receipts by Category.....................................................................................................35 Rental Acreage and Receipts ........................................................................................ 36 Treasurer’s Formula Distribution.................................................................................... 37 State Trust Land Acreage by Beneficiary ...................................................................... 38 Auctions of Leases With and Without Preferred Right .................................................. 39 Please visit our website at www.land.state.az.us Special Thanks: Carolyn Harbison with the Natural Resource Education Center and the ASLD employees who contributed photos to this annual report: Willie Sommers, Chris Lowman, Roz Sedillo, Sandy Kelley, Greg Novak, Bruce Davis, Joe Dixon, John Schieffer, Keith Fallstrom, and Melissa Hyde. Janice K. Brewer Governor State of Arizona Message From the Commissioner September 1, 2010 The Honorable Janice K. Brewer Governor of Arizona 1700 West Washington Street Phoenix, Arizona 85007 Dear Governor Brewer: It is my privilege to deliver to you the State Land Department’s Annual Report for Fiscal Year 2010 as required by A.R.S. §37-132. The report contains a summary of the Department’s management activities and the revenue the Land Department earned during the fiscal year. It is my primary and continuing goal to increase revenue for the beneficiaries of the State Trust and to protect its long term interest. In this fiscal year, Land Department staff continued their diligent work in support of the Trust. Even in the current recession, we were very successful in generating revenue for the beneficiaries. While the Department did not set a lot of new records, it did perform remarkably well in this economy. The following statistics help put last year’s receipts into perspective: Maria Baier Arizona State Land Commissioner • • • • $155,429,219 Total Receipts – Ranks 7th all time $49,958,007 Expendable Receipts – Ranks 7th all time $94,511,605 Permanent Receipts – Ranks 7th all time $19,151,000 Land Sales – Ranks 19th all time As you can see, the Department carefully scrutinized applications to ensure no auction was held that could have failed to comply with the mandates of the Trust, and therefore the Department sold only 918.36 carefully selected acres that earned in excess of $19 million as referenced above. We also have seen significant revenue from other sources. For example, $52.2 million was received for perpetual rights-of-way, primarily land for the loop 303 freeway. Perhaps most striking, the Department shattered the royalty receipts record with receipts of $26.5 million. The previous record was $16.1 million set in FY 1991. FY 2010 was the first year of a new funding mechanism for the Department. In July 2009, the law was passed that allows up to 10 percent of Trust proceeds to be used to manage the Trust. This is in line with most other states with Trust land which similarly retain a portion of the revenue to fund the management of the land. This shift already has helped the Trust because the Department was generally able to maintain its level of service to the beneficiaries. 1 Message From the Commissioner About the Commissioner Thank you for the opportunity to serve Arizona and the Trust beneficiaries as State Land Commissioner. The possibilities that exist for the Land Department over the next year are exciting, and I look forward to working alongside you, your staff, the staff at the Department and the citizens of Arizona to advance the interests of those we serve, and most especially our beneficiaries. Sincerely, Maria Baier Arizona State Land Commissioner Maria Baier was appointed as the Arizona State Land Commissioner in June, 2009. Maria has held several executive positions, including President of MBC, Inc., a sustainability consulting firm specializing in sustainable land use and natural resource management practices; President and CEO of Valley Partnership, a trade organization representing 600 Metro Phoenix businesses, whose primary mission is to “advocate responsible development;” and Director of the Trust for Public Land Arizona Field Office. She also spent 10 years on the Executive Staff of the Office of the Governor, serving two administrations. She served as senior policy advisor in the areas of natural resources, growth and development, environmental quality and criminal justice. Maria also was elected to the Phoenix City Council and served from 2008 - 2009, until her appointment as Commissioner. She is an active member of the Arizona State Bar and volunteers on numerous boards and commissions including the Trust for Public Land Arizona, Foundation for Blind Children, Great Hearts Academies, Valley Partnership, and Central Arizona Partnership. Maria received her Bachelor of Arts Degree from Arizona State University, and her Juris Doctor from the James E. Rogers College of Law at the University of Arizona. 2 Historical Overview 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 benefit of the Common Schools. Endowment 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. 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 temporary Land Department of the State. The members were Mulford Winsor, Chairman; Cy Byrne, Secretary; and William A. Moody, member. Appointed by Governor George W. P. Hunt, they were charged with assessing, evaluating, and making recommendations about the land granted by Congress to the State for the 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 State Enabling Act, passed on June 20, 1910, allowed the Territory of Arizona to prepare for statehood. In addition to the previously designated sections 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. 1914 photo of Arizona Governor George W.P. Hunt and members of the Arizona State Land Commission: Catherine Grove, George W.P. Hunt, Ethel Shoemaker, and E.L. Trippel. (Photo courtesy of Arizona State Library, Archives and Public Records, History and Archives Division, Phoenix, #97-6948) 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 parcel. The Commission recommended the creation of a permanent State Land Department “... in order that the multitudinous detail attached to the State’s varied land interests may have constant attention and to prevent irretrievable loss.” Two men by a Model T Ford in the Pinal Mountains of Gila County, Arizona. (Photo courtesy of Arizona State Library, Archives and Public Records, History and Archives Division, Phoenix, #98-1660) 3 Historical Overview 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 Department’s inception, its mission has been to manage the Land Trust and to maximize its revenues for the beneficiaries. All uses of the land must benefit 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 ensure protection of the land and compensation to the beneficiaries for its use. Trust Revenue Revenues earned from Trust land are classified as either permanent or expendable receipts. Revenues derived from the sale of State Trust land and natural products are referred to as permanent receipts. Up to 10 percent of these receipts are deposited into the Trust Land Management Fund, which is used for operating expenses. The remaining receipts are deposited into the permanent funds and invested in stocks, bonds, and interest-bearing securities by the State Treasurer. The Treasurer distributes money from the funds to the beneficiaries according to a constitutional formula. Expendable revenue includes lease revenue from Trust land leases and permits, interest from sales contracts, and the Treasurer’s formula distribution. This revenue is distributed directly to the beneficiaries for their use. State Trust land management priorities continually evolve to remain efficient in all areas of the Trust’s maintenance. One change that dramatically increased the Department’s 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 also expanded the Department’s 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. Bridge on Sawmill Road in the Pinal Mountains of Gila County, Arizona. (Photo courtesy of Arizona State Library, Archives and Public Records, History and Archives Division, Phoenix, #98-1663) Beneficiaries There are 13 beneficiaries of State Trust land revenues. The Common Schools 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; Penitentiary Fund; State Hospital; School for the Deaf and Blind; Normal (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 grants for the Miners’ Hospital. A 14th 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. 4 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 was 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. Original Land Endowment Pattern Land Endowment by Township Township = 36 Sections Each Section = 1 Square Mile Organizational Chart Commissioner’s Office Conservation Advisory Committee Board of Appeals Urban Land Planning Oversight Committee Administration Division Budget & Procurement Accounting Human Resources Land Information, Title and Transfer Natural Resources Real Estate Information Systems & Resource Analysis Titles & Contracts Natural Resource Conservation Commercial Sales & Leasing Geographic Information Systems Administrative Procedures & Information Range Rights-of-Way State Cartographer’s Office Cadastral Water Rights & Agriculture Planning & Engineering Information Technology Environmental Resources & Trespass Appraisal Minerals 5 NRCD Environmental Education During the 2009 – 2010 school year, this Natural Resource Education Center presented 51 field days at Central Arizona College, ventured on 36 classroom visits, and participated in three community events. In total, the Center instructed 4,390 children and 471 adults in the wise use and management of Arizona’s renewable natural resources. While on campus, visitors are encouraged to meet with college administrators and learn about opportunities for higher learning in the field of natural resource management. Title 37, Chapter 6, Article 2 of the Arizona Revised Statutes authorizes the State Land Department to establish a Division of Natural Resource Conservation. Since 1942, thirty-two Natural Resource Conservation Districts (NRCD) have been established across Arizona with specific powers and authorities delegated by the State Land Commissioner. One such authority is to organize and sponsor local efforts to inform and educate youth and adults in principles of wise land use and sustained management of Arizona’s renewable natural resources. The daily operations of Natural Resource Conservation Districts and corresponding Environmental Education Centers are overseen administratively by Arizona State Land Department program staff. There are currently 23 Natural Resource Education Centers (NREC) operating today. One of the Education Centers located on the campus of Central Arizona College is sponsored by the West Pinal NRCD, Eloy NRCD, and Florence - Coolidge NRCD. It was organized as a formal 501(c)(3) private non-profit organization; staff includes a full-time Director, a part-time Assistant Director, and a number of volunteers. Although the primary source of funding is the Arizona Environmental Special Plate Fund (ESPF), this NREC has leveraged their base funding to successfully receive grants from the Arizona Department of Health Services, Central Arizona Project, Gila River Indian Community, and the Pinal County Attorney’s office. The Arizona State Land Department is primarily recognized for its mandate to generate revenue for the beneficiaries of the Trust, many of which are educational institutions. The Department is also proud of its little known efforts to inform and educate the residents of Arizona through the Natural Resource Conservation District Environmental Education Program. This Natural Resource Education Center uses several avenues for program delivery. They provide classroom visits where all types of natural resource issues can be discussed such and agronomy (corn, pumpkins, and vegetable production), animal husbandry (dairy and egg production), entomology (the study of insects), and various soil and water conservation practices. Another method of education is coordinating class field trips to the NREC facility located on the campus of Arizona Central College. In August of 2001, the NREC and the College entered into a Memorandum of Understanding outlining the duties and responsibilities of each party. The College has since provided the Center with four acres of irrigated land and classroom space. Children are bused from their schools to the Center where they receive both classroom and field instruction and learn the “Five C’s” of Arizona. The Five C’s found on the Great Seal of the State of Arizona represent Copper, Cattle, Citrus, Cotton, and Climate. 6 Major Transactions/Leases $22,133,046 — Mineral lease 11-98925 to ASARCO LLC for 574.79 acres extracted 89.6 million pounds of copper. $20,546,087 — The Arizona Department of Transportation purchased a perpetual right-of-way consisting of 498.89 acres on 12/11/2009. The land is located from Happy Valley Road to Lake Pleasant Parkway and will be used for the Loop 303 freeway. $13,579,355 — The Arizona Department of Transportation purchased a perpetual right-of-way consisting of 470.32 acres on 10/9/2009. The land is located from Lake Pleasant Parkway to the I-17 and will be used for the Loop 303 freeway. $9,560,000 — The City of Phoenix purchased 294.57 acres on 12/15/2009. The land is priority 2C of the Sonoran preserve and is located three miles east of I-17 and one mile south of the Carefree Highway. $9,316,420 — Arizona Public Service purchased a perpetual right-of-way consisting of 247.61 acres for an electrical transmission line south of SR 74 and west of I-17 on 06/03/2010. Railroad mine siding at the mine in Morenci, Arizona (Photo courtesy of Arizona State Library, Archives and Public Records, History and Archives Division, Phoenix, #94-2009) $6,500,000 — The City of Scottsdale purchased 398.91 acres on 12/15/2009. This land will be preserved and is located at the southeast corner of Pinnacle Peak Road and 104th Street. Certificate of Purchase Balance $1,200 Acres Sold Urban Total Sales Price Minimum Cumulative Lease Revenue Acres Leased 918.36 $19,151,000 0 $0 Rural 0 $0 0 $0 Total 918.36 $19,151,000 0 $0 7 $1,000 $800 $600 $400 $200 $0 19 99 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 20 10 Land Auctioned FY 2010 Balance (in millions) Facts and Figures Fiscal Year Cooperating to Secure Arizona’s Borders In an effort to help secure our borders in Pima and Santa Cruz counties, the Department has worked closely with the U.S. Border Patrol and the Corps of Engineers to provide them with the instruments necessary for legal access to State Trust land. The Corps of Engineers coordinates the access and fence related projects, and the Border Patrol coordinates projects related to entry locations, check points and the National Guard. There is a coordinated effort to provide access to and installation of telecommunication sites for the purpose of public safety communication facilities. The following sites include access and/or tower sites. Five Year Plan This year, the Department updated its Five Year Plan (FYP), prepared under ARS § 37331.03. The FYP is a GIS-based database containing over 300 parcels, as well as information about these parcels considered for disposition in the near-term, mid-term and long-term. The FYP aids in identifying potential disposition opportunities by narrowing down the parcel candidates and offering additional information about those parcels selected for disposition. During the next year, the FYP will be presented to the Urban Oversight Land Planning Committee. 8 Did You Know? • The Department processed 1,062 new customer applications, issued 8,195 recreational use permits, and retrieved 7,906 lease and contract files for customers. • ASLD Public Records Central Files answered more than 2,122 email and phone customer inquiries. • It took 85 years to reach a permanent funds balance of $1 Billion in 2001. The current balance is $2.3 Billion. Mineral Leases ASARCO The agency produced a record income of $29.3 million in FY 2010 from minerals-related activities, primarily from an older Mineral Lease with ASARCO’s Mission Mine in Pima County that generated $22 million. This Mineral Lease expires on December 31, 2010, and ASLD has already started working with ASARCO to ensure it will be ready for renewal on January 1, 2011. A new Mineral Lease, signed October 23, 2009, with Freeport McMoRan for their Morenci Mine in Greenlee County, generated $1.5 million in royalty income. Additionally, exploration permittees are required to incur exploration costs each year or pay the Department in lieu of those expenses (A.R.S.§27-252). An internal audit revealed that these receipts were not accounted for properly in prior years. These were corrected in FY 2010. Otherwise, income from common variety sand and gravel and other aggregates operations, and oil and gas leasing was down from previous years, continuing to reflect a depressed market for those commodities. RIDGEWAY A Unit Agreement between the Department and Ridgeway Arizona Oil Corporation (Ridgeway) for the development of the St. Johns CO2 and Helium Field in east-central Apache County, was finalized and signed in December 2009. Earlier, in August 2009, Ridgeway entered into a jointventure with GreenFire Energy of Salt Lake City, Utah, to develop a geothermal energy project in the St. Johns Field. Rather than using the CO2 for enhanced oil recovery projects as originally planned, Ridgeway and GreenFire Energy will use the gas as the “fluid” for the transfer of heat from the granitic rocks underlying the field to generate up to 800 megawatts (MW) of electricity using a series of 50 MW modular plants (by comparison, the nearby Springerville Generating Station has a total rating of 1,560 MW from its four units). ASLD would collect royalties on both the CO2 and the geothermal energy produced from the St. Johns Field. GreenFire Energy has applied for funding from the U. S. Department of Energy and will participate in the drilling and completion of several of the five holes that Ridgeway will drill in the fall of 2010 to satisfy the diligent development requirements in the Unit Agreement. LEASES AND PERMITS FY 2010 REVENUE PRODUCTION FY 2010 Facts & Figures Lease Rentals Agriculture Grazing Mineral Material Exploration Permits Mineral Oil & Gas Acres 163,186 8,408,004 1,552 169,736 12,086 571,637 Number of Leases 367 1,247 14 343 93 320 7,986 25 Mineral SLUPs Agriculture Grazing Mineral Material Exploration Permits Mineral Oil & Gas Mineral SLUPs TOTAL Number of Registrations and Water Rights Claims Stockpond Registrations Certificated Surface Water Rights Well Registrations 4,306 119 2,783 Sale of Products Public Auction Water Sales $377,876 Lease Water Charges $200,931 Mineral Royalties $23,736,896 Adjudication Statements of Claimant 7,029 Natural Products TOTAL Water Right Registrations 7,404 Grandfathered Groundwater Rights 234 TOTAL GRAND TOTAL 9 $2,223,973 $26,539,676 Trespass Revenues Settlements $655,712 Trespass Revenue ASARCO’s Mission Mine in Pima County $4,494,449 $2,403,080 $261,384 $2,456,833 $81,790 $399,937 $105,942 $10,203,415 $33,321 $689,033 $37,432,124 303 and I-17 Progress The Arizona State Land Department and Arizona Department of Transportation will be working together to complete the right-of-way design and construction on the 16 mile phase II of the Loop 303 freeway. This section of the Loop is designed as a six-lane divided freeway with a freeway-to-freeway interchange at Loop 303 and I-10. The Loop 303 regional transportation is a huge benefit to the State and is expected to contribute approximately $34 million to the Trust’s permanent funds. Phoenix residents will soon be able to drive through the Sonoran Desert between Cave Creek Road and Paloma Parkway, eventually connecting to the newly constructed interchange at I-17 and Dove Valley Road. The City of Phoenix will go to bid in 2010 for construction of the acquired right-of-way from State Trust land of approximately 7.25 miles for the future Sonoran Boulevard. In late 2008, the Department sold a right-of-way to the City of Phoenix for their planned roadway which brought approximately $10.5 million dollars to the Trust. 10 Looking Back: Richard Oxford This year, Richard Oxford, Director of the Land Information, Title and Transfer (LITT) Division, celebrated his 34th anniversary with the Arizona State Land Department. He was employed by ASLD on July 21, 1975 where he began his tenure with the Natural Resource Division as a Range “Con” Conservationist and Wildlife Biologist. Richard worked in the Department’s Range, Mineral, and Natural Resource Conservation District programs. His proficiency as an exceptional leader catapulted him through the ranks to become Director of the Operations Division in 1981 (now called LITT). Over the years, his familiarity with and knowledge of the Department made him one of the Department’s greatest assets and the Department’s one and only Ombudsman. Whether you were researching Department history or responding to an inquiry, you could depend on him to troubleshoot difficult and controversial issues. He was committed to a high standard of customer service and consistently offered his assistance no matter how trivial the issue might have seemed. He carefully assessed sensitive issues and addressed them in a subtle manner. His responses to inquiries reflected positively on the Department and management. As a supervisor, he encouraged staff to excel. He provided direction and gave them hope to succeed. He complimented and coached Department employees. He believed in promoting staff within the agency and recognizing their efforts, even though it often meant more work for him. He was thoughtful and considerate not only to those he worked with but also to the general public. Richard’s dedication to his job was admirable. Richard Oxford retired December 24, 2009. ASLD would like to recognize Richard for his hard work and dedication over these past 34 years and congratulate him for a job well done. 11 Preserve Land This year the Department brought to auction three parcels that had been classified as suitable for conservation under the Arizona Preserve Initiative. In November of 2009, Pima County was the successful bidder for 67 acres at the corner of Valencia & I-19, with a bid of $940,000. This parcel contains very significant cultural resources dating back to approximately 200 B.C. In December 2009, The City of Phoenix purchased a 294-acre parcel for $9.56 million. This purchase represents another step toward completion of the Sonoran Preserve. To date, the City has purchased a total of 5,500 acres of the 20,000 acres approved by the City Council in 1998. Also in December 2009, the City of Scottsdale, for the first time, accessed funds from the Growing Smarter State Trust Land Acquisition Grant to purchase a 400-acre parcel. The successful bid of $6.5 million adds additional acreage to the McDowell Sonoran Preserve. Scottsdale has already acquired or protected more than 16,000 acres for the preserve and has a long-range goal to expand the preserve to about 36,000 acres, nearly a third of the city’s land area. Scottsdale is pursuing approximately 2,000 acres of State Trust land in the next fiscal year and another purchase the following year. 12 Wind Developments Palisene The Department continued to work diligently with Westcor and its subsidiary Palisene Regional Mall, LLC, the lessee on Paradise Ridge Parcel 3A. This mixed-use site contains entitlements for up to 400 hotel rooms, 1,996 multi-family dwelling units and almost 2.8 million square feet of gross leasable commercial floor area, and has been branded as “Palisene.” The Department plans to continue working with Westcor’s engineering consultants to obtain City of Phoenix approval for infrastructure master planning, including water, wastewater, roads and drainage improvements. Following City of Phoenix approval of these master plans, which is anticipated by the end of calendar year 2010, Westcor will commence with the preparation of construction documents. The extension of roads and wet utilities to the Palisene leasehold will provide the backbone infrastructure needed to serve both Palisene and the rest of the Paradise Ridge property north of Loop 101 (see map on next page). In addition, ASLD worked on a number of dispositions throughout the State. Many of the dispositions were for non-residential purposes, including those relating to mining, transportation and energy storage and production. ASLD will be poised to take advantage of the anticipated upturn in the economy in the coming years. ASLD continues to work on several utility scale wind developments in the northern part of the State. ASLD, Bureau of Land Management, and a private land owner were successful in obtaining the State’s first utility scale wind energy facility in Navajo County. Dry Lake (phase 1) was approved in November 2008 with construction competed in 4th quarter 2009. Dry Lake (phase 1) is in full operation generating electrical power for approximately 15,000 homes. The Department is planning for phase 2 of the Dry Lake wind project with 30 additional turbines distributed among State Trust and private lands. Phase 2 will generate an additional $4.3 million to the Trust over the term of the 50 year right-of-way, totaling approximately $8.7 million dollars to the Trust for phase 1 and 2. In addition, the Department is currently working on three other major utility scale wind developments in Coconino County encompassing several sections of State Trust land. 13 14 Arizona Preserve Initiative Reclassification On July 21, 2009, the Department conducted the first Arizona Preserve Initiative (API) Reclassification hearing since January 2004. The purpose of this hearing was to take public testimony regarding Coconino County’s API petition to reclassify approximately 2,200 acres of State Trust land, known as Rogers Lake, as being suitable for conservation purposes. This area is approximately ten miles southwest of the City of Flagstaff off of Woody Mountain Road. On January 13, 2010, the State Land Commissioner issued Order No. 158-2009/2010 classifying these lands as suitable for conservation purposes. 15 Board of Appeals CURRENT BOARD MEMBERS Sanders K. Solot, Chair Tucson Represents the First District, consisting of Pima, Santa Cruz, Cochise, Graham and Greenlee counties. Arizona Revised Statute §37-132(A)(7) requires all land sales and commercial leases be approved by the Board of Appeals, which also serves as an Administrative Review Board. An appeal from a final decision of the State Land Commissioner relating to appraisals and classifications may be taken to the Board of Appeals by any person adversely affected by the decision. Norman R. Brown, Vice-Chair St. Johns Represents the Third District consisting of Mohave, Yavapai, Coconino, Apache and Navajo counties. The State Land Department Board of Appeals consists of five board members (pictured to the left) 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 positionsat-large. The Board currently meets every other month (vs. monthly) to ease budget concerns. This schedule still allows the Board to address appeals of Commissioner decisions related to reclassification and appraisals, as directed by statute. All meetings were held in Phoenix this fiscal year. Jeffrey Covill Phoenix Represents the Second District consisting of Maricopa, Pinal, Gila, Yuma and La Paz counties. During the fiscal year, the Board approved two commercial leases, 14 renewal leases, 67 rights-of-way sale appraisals, and eight land sale appraisals. Kathleen M. Holmes Scottsdale Member-at-Large. Nine new appeals were filed with the Board. One appeal modified the Commissioner’s decision. Four appeals were withdrawn and dismissed by the Board. At the close of FY 2010, four appeals were still pending. Jolene U. Dance Phoenix Member-at-Large. 16 State Trust Land Uses The Arizona State Land Department manages 9.3 million acres of Trust land. • • STATE TRUST LAND USES - FY 2010 9,283,836.09 acres of the surface are under 10,272 leases and other contracts. NO. OF LEASES % OF LEASES Rights-Of-Way 7,500 73% 150,059.64 2% Grazing 1,247 12% 8,408,003.63 90% 328 3% 80,527.54 1% 20 0% 1,083.15 0% Agricultural 367 4% 163,186.29 2% Use Permits 632 6% 444,983.38 5% U.S. Government 158 2% 18,291.41 0% 2 0% 8.13 0% 10 0% 12,891.56 0% SURFACE 755,011.21 acres of the subsurface are under 770 leases and other contracts. Commercial Commercial School Leases Homesite Institutional Recreational Subtotal (Leases) TOTAL ACREAGE % OF ACREAGE 8 0% 4,801.36 0% 10,272 100% 9,283,836.09 100% 93 12% 12,086.44 2% 343 44% 169,736.00 22% SUBSURFACE Mineral Mineral Exploration Mineral Materials 17 14 2% 1,551.72 0% Oil & Gas 320 42% 571,637.05 76% Subtotal (Leases) 770 100% 755,011.21 100% TOTAL LEASES 11,042 10,038,847.30 Land Ownership and Management i N BLM Forest Service Indian Trust Military Nat’l Parks/Monuments Other Parks & Recreation Private State Trust Wildlife Refuge Cities Produced by the Arizona State Land Department, GIS Section. The Arizona State Land Department makes no warranties, implied or expressed, with respect to the information shown on this map. 18 Land Ownership and Management Land Ownership in Arizona State Trust Land within Each County The State of Arizona contains an estimated 72,931,000 acres, or approximately 113,417 square miles, making it the sixth largest state in the United States. The surface land ownership in Arizona can be classified into four basic categories. COUNTY Apache Cochise 1,370,681 Coconino 1,125,118 Gila Federal, 42.2% State Trust, 12.7% Indian Trust, 27.6% Private, 17.5% 496,321 Greenlee 172,104 La Paz 254,411 Maricopa 640,214 Mohave 565,350 Navajo 370,155 Pima 860,483 Pinal 1,204,538 Yavapai 61,154 1,264,280 Yuma 186,830 Misc* 2,540 TOTAL *Trust lands located in California or Nevada due to realignment of Colorado River 19 31,231 Graham Santa Cruz 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. ACRES 652,660 9,258,071 Fiscal Year 2010 Total Trust Revenue FY 2001 - 2010 $500 $450 $400 FUNDS Expendable Commercial Prepayment School Leases General FY 2010 TOTAL $200 244,202.79 $100 $50 0.00 $0 (385,884.62) Permanent 94,511,604.59 GRAND TOTAL - FY 2010 $250 $150 11,101,289.31 Treasurer's Distribution $300 49,958,006.65 Trust Land Management Fund TOTAL LAND DEPARTMENT (Millions) $350 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Fiscal Year Land Department Earnings Treasurer's Distribution 155,429,218.72 1,799,00 155,431,017.72 20 Fiscal Year 2010 REVENUES BY BENEFICIARY FY 2010 TRUST ACRES BENEFICIARIES Common Schools (K - 12) (Includes County Bonds) STATE LAND EXPENDABLE EARNINGS TREASURER'S FORMULA DESTRIBUTION TOTAL EXPENDABLE RECEIPTS TOTAL PERMANENT FUND RECEIPTS TOTAL RECEIPTS 8,096,064 38,146,797 0 38,146,797 91,650,743 129,797,541 Normal Schools 174,798 196,746 0 196,746 80,748 227,495 Agricultural & Mechanical Colleges 124,944 84,261 0 84,261 153,223 237,484 Military Institutes 80,168 79,180 0 79,180 0 79,180 School of Mines 123,254 307,338 0 307,338 86,061 393,399 University Land Code 137,909 1,824,531 0 1,824,531 16,595 1,841,126 University of Arizona (Act Of 2/18/1881) 54,101 427,226 0 427,226 161,963 589,189 School for the Deaf & Blind 82,560 164,768 0 164,768 433,850 598,618 8,873,798 $41,230,849 $0 $41,230,849 $92,583,183 $133,814,031 Legislative, Executive & Judicial Buildings 64,257 252,296 0 252,296 201 252,497 State Hospital 71,248 304,250 0 304,250 198,595 502,845 Miners’ Hospital* 95,429 1,466,321 0 1,466,321 797,812 2,264,133 State Charitable, Penal, and Reformatory 77,229 5,341,811 0 5,341,811 760,676 6,102,487 Penitentiary 76,111 1,362,480 1,799 1,364,279 171,138 1,535,417 9,258,071 $49,958,007 $1,799 $49,959,806 $94,511,605 $144,471,410 Subtotal Education TOTAL *Miners' Hospital and Miners' 1929 combined. *The amount for expendable earnings includes $0 from the school leases in accordance with A.R.S.§37-221, D. 21 Permanent Fund • The Department deposited $94.5 million into the Permanent Funds in FY 2010, increasing the book value to $2,331,097,000. • The balance of Department managed sales contracts is $608.5 million. • The Permanent Funds consist of revenues earned from the sale of State Trust land or assets such as minerals or other natural products. Up to 10% of this revenue is deposited into the Trust Land Management Fund • Each beneficiary has its own Permanent Fund. • The State Treasurer manages the Permanent Funds and invests the funds in stocks, bonds and other interest bearing securities. Distributions from the Permanent Funds to the beneficiaries are based on a constitutional formula. Perm anent Fund Balance FY 1990 - 2010 BENEFICIARY SHARE OF PERMANENT FUND JUNE 30, 2010 BOOK VALUE MARKET VALUE 2,170,992,000 2,529,416,000 Normal Schools 2,284,000 2,832,000 Agricultural & Mechanical Colleges 6,249,000 8,135,000 352,000 459,000 7,541,000 9,186,000 University Land Code 12,256,000 15,065,000 University of Arizona (Act of 2/18/1881) 25,955,000 32,269,000 School for the Deaf & Blind 2,969,000 3,861,000 Legislative, Executive & Judicial 5,117,000 6,509,000 State Hospital 3,768,000 4,806,000 Miners’ Hospital 10,751,000 12,234,000 State Charitable, Penal & Reformatory 75,026,000 87,388,000 7,837,000 9,687,000 2,331,097,000 2,721,848,000 Common Schools (K - 12) Military Institutes School of Mines Penitentiaries $2,500 TOTAL** $2,000 *Miners' Hospital and Miners' 1929 combined. (Millions) **Values are provided by the State Treasurer's Office and are rounded to the nearest thousand. $1,500 $1,000 $500 $0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 F i sc a l Ye a r 22 Expendable Revenue • Expendable revenue includes lease revenue from Trust land leases and permits, interest from sales contracts, and the Treasurer’s formula distribution of the Permanent Fund. EXPENDABLE REVENUE BY BENEFICIARY FY 2010 • Expendable revenues are distributed directly to the beneficiaries. • Expendable revenue totaled $50.0 million in FY 2010. BENEFICIARIES • Revenue from Trust land leases, permits, and interest earnings from sales financed through the Department totaled $50.0 million. Common Schools (K-12)* • The Treasurer distributed $1,799 according to the constitutional formula based on the 5-year average net return and the 60 month average market value. Trust Expendable Earnings FY 2001 - 2010 TREASURER'S LEASE & SALES FORMULA CONTRACT DISTRIBUTION INTEREST TOTAL EXPENDABLE REVENUE 0.00 38,146,797.44 38,146,797.44 Normal Schools Grant 0.00 196,746.31 196,746.31 Agricultural & Mechanical Colleges 0.00 84,261.41 84,261.41 Military Institutes Grant 0.00 79,180.15 79,180.15 School of Mines Grant 0.00 307,338.35 307,338.35 University Land Code 0.00 1,824,531.42 1,824,531.42 University of Arizona (Act 0f 2/18/1881) 0.00 427,225.95 427,225.95 School for the Deaf and Blind 0.00 164,767.57 164,767.57 Subtotal Education 0.00 41,230,848.60 41,230,848.60 Legislative, Executive & Judicial Buildings 0.00 252,295.89 252,295.89 $200 $180 $160 (Millions) $140 State Hospital Grant 0.00 304,250.06 304,250.06 Miners’ Hospital Grant 0.00 1,466,320.81 1,466,320.81 State Charitable, Penal & Reformatory $120 $100 $80 0.00 5,341,811.26 5,341,811.26 Penitentiary Grant 1,799.00 1,362,480.03 1,364,279.03 TOTAL 1,799.00 49,958,006.65 49,959,805.65 $60 $40 $20 *The amount for expendable earnings includes $0 from the school leases in accordance with A.R.S.§37-221, D. $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Total Expendable Treasurer's Distribution Land Department Earnings 23 Fund and Beneficiary Summary In FY 2010, State Trust receipts totaled $155,431,018. A total of $144,471,410 was earned for the beneficiaries, ($385,885) was deposited in the General Fund, $244,203 was received as commercial prepayments, and $11,101,289 was deposited into the Trust Land Management Fund, which is used to manage the Trust. Of the beneficiary amount, $94,511,605 was deposited into the Permanent Funds. The Permanent Funds are managed by the State Treasurer. The remaining $49,959,806 in receipts were expendable and were distributed to the beneficiaries for use in their operations. Expendable receipts are comprised of lease revenues, interest on the outstanding sales balance and the Treasurer’s formula distribution. The table below indicates the number of acres remaining for each grant along with a breakdown on how the expendable receipts are distributed to the beneficiaries. TRUST ACRES GRANT BENEFICIARY 1st $72.3 million of expendable receipts 8,096,064 Receipts over $72.3 million 174,798 Normal Schools 124,944 Agricultural & Mechanical Colleges 80,168 Military Institutes 123,254 School of Mines 137,909 University Land Code Classroom Site Fund Board of Regents to Distribute to Universities 54,101 University of Arizona (Act 0f 2/18/1881) 82,560 School for the Deaf & Blind School for the Deaf & Blind 64,257 Legislative, Executive & Judicial Buildings Legislature, Executive & Judicial Branch 71,248 95,428 State Hospital Miners’ Hospital (2 Grants) State Hospital Pioneers' Home 77,229 State Charitable, Penal, and Reformatory 76,111 Penitentiary 9,258,071 State Aid Formula for K - 12 Common Schools (K - 12) (Includes County Bonds) 50% Pioneers' Home 25% Department of Corrections Department of Corrections TOTAL 24 25% Department of Juvenile Corrections Fund and Beneficiary Summary Common Schools (K-12) • Public education is by far the largest beneficiary of Trust land managed by the Department. Congress granted two sections of each township to common schools when Arizona became a territory and another two sections when Arizona became a state. The State was able to select federal lands equal to the sections that could not be granted due to the establishment of federal forests, parks and Indian reservations. Today, approximately 8.1 million acres remain in the Trust for common schools. • In FY 2010, $91.7 million from sales and royalties was deposited into the Permanent Fund for common schools bringing the total balance to $2,170,992,000. COMMON SCHOOLS (K - 12) ACRES AND INCOME - FY 2010 SURFACE LEASES ACRES INCOME Agriculture 118,802 $3,230,458.76 22,647 $19,472,365.01 7,411,660 8 $2,042,615.08 $4,819.03 Commercial Grazing Homesite Rights-of-Way 106,660 $3,312,396.98 Use Permits 368,897 $4,515,760.77 Institutional Taking U.S. Government Other • In FY 2010, $38.1 million was generated in expendable receipts from leases and interest on the outstanding sales balance. The Treasurer did not distribute money to the common schools in FY 2010. According to A.R.S. § 37-521 B, expendable receipts are distributed first to the School Facilities Board for revenue bonds, second to the New School Facilities Fund, if appropriated, third for basic state aid, and fourth, any receipts in excess of $72.3 million are deposited into the Classroom Site Fund, which will be used for teacher raises, classroom size reduction and dropout prevention programs. TOTAL SURFACE • The location of common school grant lands are shown in the above map. As a result of the large number of acres that are strategically located around urban areas, substantial revenues are expected to be generated in future years on behalf of the schools. 25 5,406 $358,135.68 17,452 $411,561.37 0 $458,006.77 8,051,532 $33,806,119.45 SUBSURFACE LEASES Mineral Exploration Permit Mineral Materials Oil & Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest Sales Interest School Leases 11,747 $64,356.15 154,632 $2,014,995.06 938 $112,841.67 502,895 $357,933.99 17,452 $0.00 684,664 $2,550,126.87 $482,910.08 $1,307,641.04 $0.00 Treasurer's Formula Distribution $0.00 GRAND TOTAL EXPENDABLE $38,146,797.44 Permanent Fund Receipts $91,650,743.27 Permanent Fund Balance $2,170,992,000.00 Fund and Beneficiary Summary Common Schools (K-12) Common School Revenue (Millions) Proposition 301 (passed by voters in the 2000 election) created a Classroom Site Fund whereby particular sources of funds, including revenue from the fiduciary management of State Trust land, are directed to fund items such as teacher salaries, classroom size reduction and dropout prevention programs. According to Proposition 301, the first $72.3 million in expendable revenue for common schools can be used to fund the basic State Aid Formula, which funds education. Expendable revenue in excess of $72.3 million is deposited into the Classroom Site Fund. Fiscal Year 2007 2008 2009 2010 Permanent Fund Revenue 182.7 238.5 138.5 91.7 32.4 69.3 54.3 0.0 Rent & Interest 106.9 104.4 74.1 38.1 Total Expendable 139.2 173.7 128.4 38.1 Base Year Amount (72.3) (72.3) (72.3) (72.3) 67.0 101.4 56.2 0.0 Treasurer's Distribution Classroom Site Fund Common Schools Expendable Earnings FY 2001 - 2010 Classroom Site Fund FY 2002 - 2010 $200 $200 $160 $180 $140 $160 $120 $140 $100 $120 (Millions) (Millions) $180 $80 $60 $100 $80 $60 $40 $40 $20 $20 $0 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2002 2003 2004 2005 2006 2007 2008 2009 Total Common School Expendable Expendable Earnings Treasurer's Formula Distribution Leases & Sales Interest Classroom Site Fund Distribution 26 2010 Fund and Beneficiary Summary University Grants • Arizona’s three universities (Arizona State University, Northern Arizona University, and the University of Arizona) are the beneficiaries of six Trust grants. TOTAL UNIVERSITY GRANTS FY 2010 SURFACE LEASES • The total expendable revenue distributed to the Board of Regents and then to the universities to fund their operations was $2.9 million in FY 2010. An additional $0.5 million was earned and added to the permanent funds for the six grants, bringing the total Permanent Fund balance to $54.6 million. ACRES INCOME Agriculture 13,557 $285,858.82 Commercial 51,676 $671,383.11 Grazing Rights-of-Way Use Permits Institutional Taking • The Board of Regents distributes the expendable earnings from the six grants to the University of Arizona, Northern Arizona University and Arizona State University as follows: U.S. Government Other TOTAL SURFACE Board of Regents Distribution of Trust Revenues to the Universities Grant Distribution Agricultural & Mechanical Colleges 1/2 to UA and the other 1/2 split between the three universities based on engineering credit hours Military Institutes Grant Split between the three universities based on credit hours University Land Code Split between the three universities based on credit hours Normal Schools 1/3 to each university UA 1881 Grants UA School of Mines Grant UA 597,876 $207,308.82 7,865 $186,693.13 30,495 $1,197,381.67 5,151 $1,050.65 299 $7,200.04 0 $300.00 706,918 $2,557,176.24 13,183 $302,568.71 120 $10,560.09 55,208 $34,546.29 299 $0.00 68,809 $347,675.09 SUBSURFACE LEASES Prospecting Permit Mineral Material Oil & Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest $0.00 GRAND TOTAL EXPENDABLE $2,919,283.59 Permanent Fund Receipts Permanent Fund Balance 27 $14,432.26 Treasurer's Formula Distribution $498,589.45 $54,637,000.00 Fund and Beneficiary Summary University Grants Northern Arizona University There are 87 different academic programs that let students tailor their educations to any career. (Photo courtesy of Northern Arizona University) University of Arizona Samantha Kendrick, a cancer biology graduate student doing her dissertation project in Hurley's lab, received the 2010 UA Student Technology Innovation Award for her work. (Photo courtesy of the University of Arizona) 28 Arizona State University Danielle Orsillo scored 12 points for Arizona State as the Sun Devils hosted the Cardinal on February 25th. (Photo by Tom Story and courtesy of Arizona State University) Fund and Beneficiary Summary University Grants NORMAL SCHOOLS GRANT AGRICULTURAL & MECHANICAL COLLEGES MILITARY INSTITUTES ACRES AND INCOME - FY 2010 ACRES AND INCOME - FY 2010 ACRES AND INCOME - FY 2010 SURFACE LEASES ACRES Agriculture INCOME SURFACE LEASES 165 $779.84 22,539 $21,960.87 Commercial 146,026 $51,042.02 Grazing Rights-of-Way 1,650 $49,383.96 Use Permits 4,317 $6,160.76 Institutional Taking 2,721 $0.00 184 $7,200.04 177,601 $136,527.49 Commercial Grazing U.S. Government TOTAL SURFACE SUBSURFACE LEASES Prospecting Permit Mineral Material Oil & Gas U.S. Government TOTAL SUBSURFACE ACRES INCOME Agriculture 251 $2,659.78 Commercial 10,172 $1,168.07 Grazing 107,163 $36,961.08 Rights-of-Way Rights-of-Way 1,882 $12,662.94 Use Permits Use Permits 5,667 $19,331.71 TOTAL SURFACE Institutional Taking 1,917 $0.00 U.S. Government TOTAL SURFACE 86 $0.00 127,148 $72,783.58 ACRES INCOME 1,935 $38,233.00 76,749 $29,656.67 270 $4,778.52 40 $2,151.68 78,994 $74,819.87 Oil & Gas 18,471 $1,920.00 TOTAL SUBSURFACE 18,471 $1,920.00 SUBSURFACE LEASES SUBSURFACE LEASES 9,228 $47,952.42 Prospecting Permit Oil & Gas 120 $10,560.09 2,858 -$7.58 184 12,390 $0.00 $58,504.93 U.S. Government TOTAL SUBSURFACE Penalty & Interest Penalty & Interest SURFACE LEASES 970 $3,906.04 Penalty & Interest 6,781 $7,260.94 Treasurer’s Formula Distribution $0.00 86 $0.00 GRAND TOTAL EXPENDABLE $79,180.15 7,836 $11,166.98 $310.85 $1,713.89 Treasurer’s Formula Distribution $0.00 Treasurer’s Formula Distribution $0.00 GRAND TOTAL EXPENDABLE $84,261.41 GRAND TOTAL EXPENDABLE $196,746.31 Permanent Fund Receipts $80,748.21 Permanent Fund Balance $2,284,000.00 Permanent Fund Receipts $153,222.79 Permanent Fund Balance $6,249,000.00 29 $2,440.28 Permanent Fund Receipts $0.00 Permanent Fund Balance $352,000.00 Fund and Beneficiary Summary University Grants SCHOOL OF MINES UNIVERSITY LAND CODE UNIVERSITY OF ARIZONA - 1881 ACRES AND INCOME - FY 2010 ACRES AND INCOME - FY 2010 ACRES AND INCOME - FY 2010 SURFACE LEASES ACRES INCOME 2,485 $36,534.98 Agriculture Commercial Agriculture Commercial Grazing 8,483 $7,476.59 111,207 $38,312.40 Grazing 1,050 $18,459.93 12,529 $6,101.77 17 $0.00 135,770 $106,885.67 Rights-of-Way Use Permits U.S. Government TOTAL SURFACE SURFACE LEASES Prospecting Permit Oil & Gas U.S. Government TOTAL SUBSURFACE 2,551 $186,836.56 12,393 $13,123.32 17 $0.00 14,961 $199,959.88 INCOME 3,626 $65,864.16 Agriculture Commercial 8,238 $515,231.11 $39,629.11 Grazing Rights-of-Way 2,226 $26,395.89 Rights-of-Way Use Permits 5,171 $1,099,398.48 107 $1,050.65 U.S. Government 8 $0.00 Other 0 $300.00 137,231 $1,747,869.40 Institutional Taking $492.80 Treasurer’s Formula Distribution $0.00 GRAND TOTAL EXPENDABLE $307,338.35 Permanent Fund Receipts $86,060.73 Permanent Fund Balance $7,541,000.00 ACRES INCOME 7,030 $180,020.06 308 $87,313.47 Use Permits Institutional Taking U.S. Government TOTAL SURFACE 38,876 $11,707.54 787 $75,011.89 2,761 $64,237.27 406 $0.00 4 $0.00 50,173 $418,290.23 SUBSURFACE LEASES Prospecting Permit 320 $640.00 115 $63,233.69 Oil & Gas 120 $120.00 14,585 $12,129.51 U.S. Government 8 $0.00 14,708 $75,363.30 SUBSURFACE LEASES Prospecting Permit Oil & Gas U.S. Government Penalty & Interest SURFACE LEASES 117,855 TOTAL SURFACE SUBSURFACE LEASES ACRES TOTAL SUBSURFACE TOTAL SUBSURFACE Penalty & Interest Penalty & Interest 4 $0.00 444 $760.00 $8,175.72 $1,298.72 Treasurer’s Formula Distribution $0.00 Treasurer’s Formula Distribution $0.00 GRAND TOTAL EXPENDABLE $427,225.95 GRAND TOTAL EXPENDABLE $1,824,531.42 Permanent Fund Receipts $161,963.19 Permanent Fund Balance $25,955,000.00 Permanent Fund Receipts $16,594.54 Permanent Fund Balance $12,256,000.00 30 Fund and Beneficiary Summary Other Grants • The remaining six Trust beneficiaries are the School for the Deaf & Blind; the Legislative, Executive and Judicial Buildings; the State Hospital; the Pioneers’ Home; the Department of Juvenile Corrections; and the Department of Corrections. These six beneficiaries were authorized in the Enabling Act and received 100,000 acres, except for the State Charitable Grant which received 200,000 acres. A chart showing the connection between the grants and the beneficiaries is provided below. • The Pioneers’ Home received a total of $4,137,226.44 in expendable receipts in FY 2010. • The Department of Juvenile Corrections received $1,335,452.81 in FY 2010. • The Department of Corrections received a total of $2,699,731.84 in expendable receipts in FY 2010. Grant Beneficiary School for Deaf & Blind........................................ School for Deaf & Blind Legislative, Executive & Judicial Buildings.......... Legislature, Executive & Judicial Branch State Hospital......................................................... State Hospital Miners’ Hospital (2 Grants)................................... Pioneers’ Home State Charitable, Penal & Reformatory ................. 50% Pioneers’ Home 25% Dept. of Juvenile Corrections 25% Dept. of Corrections Penitentiary............................................................ Dept. of Corrections Arizona Department of Juvenile Corrections Black Canyon School (BCS) operates intake and secure programming for youth. BCS (pictured to the right) houses all female youth and is located in Phoenix. (Photo courtesy of the Arizona Department of Juvenile Corrections) 31 Arizona State Schools for the Deaf and Blind Henry C. White was the first principal, appointed by Governor George W. P. Hunt, and classes began in October, 1912. Nineteen children with hearing loss were the first students, and classes were held in a converted residence on the campus of the University of Arizona in Tucson. (Photo courtesy of the Arizona State Schools for the Deaf and Blind) Fund and Beneficiary Summary Other Grants SCHOOL FOR THE DEAF & BLIND LEGISLATIVE, EXECUTIVE, & JUDICIAL BUILDINGS STATE HOSPITAL ACRES AND INCOME - FY 2010 ACRES AND INCOME - FY 2010 ACRES AND INCOME - FY 2010 SURFACE LEASES ACRES INCOME Agriculture 2,638 $68,079.29 Agriculture Commercial 1,453 $23,521.53 Commercial Grazing Rights-of-Way Use Permits Institutional Taking U.S. Government TOTAL SURFACE SURFACE LEASES ACRES INCOME 2,180 $27,547.83 Agriculture 5 $24,600.00 Commercial 72,540 $27,471.38 Grazing 56,406 $24,123.04 Grazing 817 $18,569.18 Rights-of-Way 1,392 $54,169.98 Rights-of-Way 10,314 $14,733.99 Use Permits 5,062 $7,335.04 1 $0.00 U.S. Government 32 $0.00 TOTAL SURFACE 87,795 $152,375.37 92 $0.00 65,137 $137,775.89 1,122 $5,283.80 U.S. Government Oil & Gas 6,502 $6,502.45 TOTAL SUBSURFACE 32 $0.00 7,656 $11,786.25 Penalty & Interest $605.95 INCOME 4,251 $114,801.21 268 $58,874.49 57,770 $23,556.50 903 $29,349.99 4,919 $16,401.79 Institutional Taking 80 $14,685.00 U.S. Government 108 $0.00 0 $1,080.00 68,300 $258,748.98 Use Permits TOTAL SURFACE Prospecting Permit Prospecting Permit TOTAL SUBSURFACE ACRES Other SUBSURFACE LEASES SUBSURFACE LEASES U.S. Government SURFACE LEASES 1,479 $113,419.44 92 $0.00 1,571 $113,419.44 SUBSURFACE LEASES Mineral Prospecting Permit Penalty & Interest $1,100.56 Treasurer’s Formula Distribution $0.00 GRAND TOTAL EXPENDABLE $252,295.89 Mineral Material 60 $16,572.00 1,120 $2,240.00 77 $11,000.00 Oil & Gas 315 $314.60 U.S. Government 108 $0.00 1,680 $30,126.60 Treasurer’s Formula Distribution $0.00 GRAND TOTAL EXPENDABLE $164,767.57 Permanent Fund Receipts $433,850.12 Treasurer's Formula Distribution $0.00 Permanent Fund Balance $2,969,000.00 GRAND TOTAL EXPENDABLE $304,250.06 TOTAL SUBSURFACE Permanent Fund Receipts $201.15 Permanent Fund Balance $5,117,000.00 32 Penalty & Interest $15,374.48 Permanent Fund Receipts $198,595.34 Permanent Fund Balance $3,768,000.00 Fund and Beneficiary Summary Other Grants MINERS' HOSPITAL* STATE CHARITABLE, PENAL, & REFORMATORY PENITENTIARY ACRES AND INCOME - FY 2010 ACRES AND INCOME - FY 2010 ACRES AND INCOME - FY 2010 SURFACE LEASES Agriculture Commercial ACRES INCOME 12,936 $404,841.07 SURFACE LEASES Agriculture 580 $872,342.91 73,515 $23,536.73 Grazing Rights-of-Way 1,642 $40,986.73 Use Permits 4,298 $81,604.28 1 $0.00 168 $0.00 Grazing Institutional Taking U.S. Government TOTAL SURFACE 93,139 $1,423,311.72 SUBSURFACE LEASES Mineral Prospecting Permit Mineral Material Oil & Gas U.S. Government TOTAL SUBSURFACE Commercial ACRES INCOME 3,997 $134,845.98 Agriculture Commercial 3,401 $511,298.32 62,845 $26,180.84 Grazing Rights-of-Way 1,844 $41,759.40 Rights-of-Way Use Permits 5,801 $4,434,769.04 475 $66,157.48 Institutional Taking U.S. Government 117 $0.00 78,480 $5,215,011.06 Mineral 160 $120.00 Mineral Material 186 $97,742.33 TOTAL SURFACE SUBSURFACE LEASES 119 $741.90 1,200 $18,326.45 230 $20,239.91 5,449 $640.00 168 $0.00 7,166 $39,948.26 $3,060.83 Use Permits Institutional Taking U.S. Government TOTAL SURFACE ACRES INCOME 4,717 $219,514.72 459 $706,771.16 65,932 $25,217.16 490 $309,895.29 15,011 $96,127.76 1,778 $0.00 5 $0.00 88,388 $1,357,526.09 SUBSURFACE LEASES Oil & Gas U.S. Government TOTAL SUBSURFACE Penalty & Interest Penalty & Interest SURFACE LEASES 1,268 $0.00 117 $0.00 1,732 $97,862.33 U.S. Government 5 $0.00 TOTAL SUBSURFACE 5 $0.00 Penalty & Interest $4,953.94 Treasurer’s Formula Distribution $1,799.00 GRAND TOTAL EXPENDABLE $1,364,279.03 $19,471.79 Sales Interest $9,466.08 Permanent Fund Receipts $171,137.71 Permanent Fund Balance $7,837,000.00 Treasurer’s Formula Distribution $0.00 Treasurer’s Formula Distribution $0.00 GRAND TOTAL EXPENDABLE $1,466,320.81 GRAND TOTAL EXPENDABLE $5,341,811.26 Permanent Fund Receipts $797,811.96 Permanent Fund Receipts $760,675.58 Permanent Fund Balance $10,751,000.00 Permanent Fund Balance $75,026,000.00 *Miners' Hospital and Miners' 1929 combined 33 Financial Schedules Receipts by Category ................................................................ 35 Rental Acreage and Receipts .................................................... 36 Treasurer’s Formula Distribution ............................................... 37 State Trust Land Acreage by Beneficiary .................................. 38 Auctions of Leases with and without Preferred Right ................ 39 34 Financial Schedules RECEIPTS BY CATEGORY - FY 2010 ROYALTY Common Schools (K - 12) Normal Schools A&M Colleges University Land Code U of A (Act of 2/18/1881) School for the Deaf & Blind SALES LEASE PENALTY & OTHER INTEREST RENTAL INTEREST RECEIPTS TOTAL 22,891,159.24 68,759,584.03 1,307,641.04 36,356,246.32 482,910.08 0.00 72,020.15 8,728.06 0.00 195,032.42 1,713.89 0.00 277,494.52 2,279.03 150,943.76 0.00 83,950.56 310.85 0.00 237,484.20 0.00 0.00 0.00 76,739.87 2,440.28 0.00 79,180.15 30,426.19 55,634.54 0.00 306,845.55 492.80 0.00 393,399.08 3,595.49 12,999.05 0.00 1,823,232.70 1,298.72 0.00 1,841,125.96 Military Institutes School of Mines SALES PRINCIPAL 129,797,540.71 82,242.93 79,720.26 0.00 419,050.23 8,175.72 0.00 589,189.14 1,392.04 432,458.08 0.00 164,161.62 605.95 0.00 598,617.69 Leg., Exec & Judicial 201.15 0.00 0.00 251,195.33 1,100.56 0.00 252,497.04 87,741.31 110,854.04 0.00 288,875.58 15,374.48 0.00 502,845.40 Miners' Hospital* 111,065.01 686,746.95 0.00 1,463,259.98 3,060.83 0.00 2,264,132.77 St Char., Pen. & Ref 511,731.10 248,944.48 9,466.08 5,312,873.39 19,471.79 0.00 6,102,486.84 60,354.32 110,783.39 0.00 1,357,526.09 4,953.94 0.00 1,533,617.74 School Leases 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Commercial Prepayment 0.00 0.00 0.00 0.00 0.00 244,202.79 244,202.79 23,854,207.95 70,657,396.64 1,317,107.12 48,098,989.64 541,909.89 244,202.79 144,713,814.03 35,000.00 0.00 0.00 38,628.00 0.00 0.00 73,628.00 State Hospital Penitentiaries Total Schools & Institutions GENERAL FUND F.E.M.A. Lands Farm Loan Lands 0.00 0.00 0.00 11,043.34 21.50 0.00 11,064.84 Navigable Streambeds 0.00 0.00 0.00 67,326.42 546.37 0.00 67,872.79 Lands Held in Trust 0.00 0.00 0.00 22,198.54 1,394.09 0.00 23,592.63 Fees: Lease, Sale & Misc** 0.00 0.00 0.00 0.00 0.00 (562,042.88) (562,042.88) 35,000.00 0.00 0.00 139,196.30 1,961.96 (562,042.88) (385,884.62) 2,650,467.52 7,850,821.79 0.00 0.00 0.00 600,000.00 11,101,289.31 26,539,675.47 78,508,218.43 1,317,107.12 48,238,185.94 543,871.85 282,159.91 155,429,218.72 Total General Fund Trust Land Management Fund TOTAL RECEIPTS *Miners' Hospital and Miners' 1929 combined **Includes a prior year correction of (1,793,171.63) 35 Financial Schedules RENTAL ACREAGE AND RECEIPTS FY 2010 BY TYPE OF LEASE SURFACE LEASES ACRES Agriculture 163,186 4,494,449.22 Commercial 80,528 22,384,429.44 * 0.00 8,408,004 2,403,080.19 School Leases Grazing Homesite RECEIPTS 8 4,819.03 Rights-of-Way 121,743 4,029,213.38 Use Permits 445,028 10,404,072.85 Institutional Taking 12,892 440,028.81 U.S. Government 18,291 418,761.41 Other TOTAL SURFACE 0 459,386.77 9,249,679 $45,038,241.10 SUBSURFACE LEASES Mineral Exploration Permit Mineral Material Oil and Gas U.S. Government TOTAL SUBSURFACE 12,086 81,790.05 169,736 2,456,833.46 1,552 261,384.00 571,637 399,937.33 18,291 0.00 773,303 $3,199,944.84 NON-LEASE REVENUES Penalty & Interest Sales Interest 543,871.85 1,317,107.12 Royalty 26,539,675.47 Land Sales Principal 25,606,064.22 Rights-of-Way Sales Principal 52,246,441.95 Settlements 655,712.26 Commercial Prepayments 244,202.79 Fees** 37,957.12 TOTAL NON-LEASE REVENUES $107,191,032.78 GRAND TOTAL *The acres for School Leases are included in the total for Commercial acres. ** Includes a prior year correction of ($1,793,171.63) $155,429,218.72 36 Financial Schedules TREASURER'S FORMULA DISTRIBUTION* YEAR ENDING JUNE 30 YEAR ENDING JUNE 30 FY 2009 FY 2010 Common Schools INCREASE (DECREASE) 5/12/1912 TO DATE 54,309,120 0 (54,309,120) 1,146,372,228 76,203 0 (76,203) 2,477,895 272,442 0 (272,442) 8,445,178 Military Institutes Grant 15,237 0 (15,237) 1,204,936 School of Mines Grant 258,708 0 (258,708) 931,835 University Land Code 375,732 0 (375,732) 11,042,030 University of Arizona (Act 0f 2/18/1881) 884,190 0 (884,190) 22,794,825 School for the Deaf & Blind 120,576 0 (120,576) 4,416,960 Legislative, Executive & Judicial Buildings 193,020 0 (193,020) 7,148,218 State Hospital Grant 134,340 0 (134,340) 3,477,005 Miners' Hospital Grant** 240,495 0 (240,495) 6,790,685 2,276,353 0 (2,276,353) 25,975,433 202,659 1,799 (200,860) 4,407,510 59,359,075 1,799 (59,357,276) 1,245,484,738 Normal Schools Grant Agricultural & Mechanical Colleges State Charitable, Penal, and Reformatory Penitentiary Grant TOTAL *Information from the State Treasurer **Miners' Hospital & Miners' Hospital 1929 combined 37 Financial Schedules STATE TRUST LAND ACREAGE BY BENEFICIARY BENEFICIARY FY 1978 FY 2010 Common Schools (K - 12)* 8,342,469 8,096,064 Normal Schools Grant 172,405 174,798 Agricultural & Mechanical Colleges 134,469 124,944 Military Institutes Grant 82,945 80,168 School of Mines Grant 132,882 123,254 University Land Code 166,354 137,909 University of Arizona (Act 0f 2-18-1881) 62,216 54,101 School for the Deaf & Blind 84,209 82,560 Legislative, Executive & Judicial Buildings 66,660 64,257 State Hospital Grant 79,198 71,248 Miners' Hospital 48,648 47,742 Miners' Hospital (1929) 53,311 47,686 State Charitable, Penal, and Reformatory 80,010 77,229 Penitentiary Grant 80,830 76,111 9,586,606 9,258,071 TOTAL *Includes County Bonds 38 Financial Schedules AUCTIONS OF LEASES WITH AND WITHOUT THE PREFERRED RIGHT TO MATCH THE HIGHEST BID (REPORT REQUIRED BY A.R.S.§37-132) AUCTION LEASE # DATE PARCEL LOCATION PREFERRED NO. OF PREFERENCE RIGHT BIDDERS EXERCISED REVENUE No applicable auctions for FY 2010 39 MINIMUM BID BONUS BID SUM BASE RENTAL 1616 West Adams ● Phoenix, Arizona 85007 www.land.state.az.us