001we are live good afternoon everyone um welcome to the special public board of directors meeting for asdb I'd like to call the meeting to order at 4 pm and I will proceed with agenda item number one um the roll call um Linda Bove present Brittany Buchanan I'm present Colette Chapman I see her Colette you are on mute yeah yeah I'm present sorry about that that's okay thank you Lynn Davison Mike Gordon president Catherine sianko present and myself Sue okay can I fall we do have Quorum so we will move on to um action item 2.01 um approval of use of State trust lands um superintendent reichmann um hello everyone I'm going to turn it over to our speakers for the evening from the Arizona State Trust uh the Arizona State trust lands department has joined
002us this evening to give a presentation and a further explanation to the board answering some of the questions that came up at the last meeting so that you can make a more informed decision foreign so State trust Representatives if you'd like to take it away you're muted we can't hear you thank you good afternoon and thank you for the invitation to present to the board my name is Reuben O'Hara o j e d a i Am the rights of Way section manager for the state land Department I have with me in the conference room here at the department miles Stevens who is the Project Lead for the sun Zia transmission line project which will be presenting today to you for your approval so I wanted to start by Elise first you know giving you some
003background on the project itself so Sun Zia transmission line LLC is a Consortium of entities that are developing and will be constructing a 550 Mile High Voltage direct current hdvc line that initiates from a solar project in New Mexico and it comes through the southern part into Arizona down in Cochise County through to now Central Station about uh 290 miles or so in Arizona uh it's a the largest renewable energy project in the United States history we've been working with the team since about 2000 on this project this project is also being run or at least the land ownership of the uh is the this is called stakeholders are the Bureau of Land Management in New Mexico and Arizona they're private land owners both in New Mexico and in Arizona and also private land here
004in Arizona as well as state trustland in both States so this is a 3 000 megawatt or three gigawatt transmission line that will be producing renewable energy from a wind farm in New Mexico the project is privately developed and will be funded by pattern energy who's also developing a project near the Eastern Terminus of the sanzia transmission in New Mexico um the state trust land or the state land Department you know as mentioned has gone through and were and participated in the uh NEPA process uh with the BLM through the environmental impact statement so we were cooperating agencies on that project the sun Zia did receive their record of decision last year to proceed with the project we worked diligently to cite this line we addressed all the constraints that were encountered the line has
005several purposes to it which would include Service Roads it would also have some you know regeneration sites miles is there anything else those are the big ones yeah so let me that's part of the I guess that's the background of the project and I will pause there to see if there's any questions in regards to the project as a whole before I get into you know the portion and the rental determination from the land Department foreign have questions they would like to ask at this time none for me okay I'll continue on so the land department has a for this project is a two-tiered level approval the first level of approval is the state land commissioner which her responsibility is to approve all leases or transactions in excess of 10 years this right away is
006a 50-year term right-of-way and will also requires the board the land board the board of land appeals approval as well the both approvals have commenced the latest was the board of appeals which transpired on I believe it was made of so thanks for crippling May the 11th is when the board approved this application so part of our responsibility to the school for the deaf and blind is to request an approval from the board your board to proceed with issuance of this right-of-way at your previous board there were some questions that were raised that we took the opportunity to answer and provide to the board and I'll kind of go through those questions so the first question that was raised by the board is how is the trust amounts determined so a couple factors here one
007the the the amount is determined by a an appraisal evaluation of the land itself okay so there's a um as will we explain how you know the school from for the deaf and blind beneficiary plays a role in the trust so the trust was you know established when we became statehood in the federal government um you know identified certain Parcels throughout the state for you know income to be generated to the beneficiaries um the school for the deaf and blind is a beneficiary of the trust and there are specific Parcels or sections throughout the state that have been have been identified as the um the beneficiary the school for different blind being dependent fishery of those Parcels we lease sell or permit use of you know instruments that Traverse across that parcel that income derived
008from that use goes to the beneficiary goes to the school for the deaf and blind in the packet we provided a list of the sections that the transmission line Traverse through so out of the total acreages of the project which is approximately 3885 Acres approximately 25 acres plus or minus was established to be the beneficiary of the school for them online so the income that derives from those Parcels based on the land value using a formula to establish the rental cost is really how that rental is established or the income is established for the school for the different blind I'm going to pause there for a moment and see if there's any questions related to the income generated from this transmission line I think we're good I think you can continue okay so land values
009that were established throughout the person I see Colette Colette did you have a question uh no I do not okay thank you I saw you unmute and my mute and unmute button is um not working properly so you just have to give me a minute thank you okay I'll go ahead and continue so how does the how do we calculate the dollar amount that's awarded to the school for the deaf and blind so in your packet in the exhibit e there's a worksheet that we utilize to calculate that rent and you know there's two purposes of the um on the worksheet one is the transmission line and one is a service road the difference between the two purposes is the Intensive use intensive use is we use that factor as you know a an indication
010of how intense is the land being utilized so if you think about it this way if this is a transmission line high voltage so the remainder of the use of that Lan is limited meaning there's not very much there's not that much additional use of the land that this transmission you know traverses across so because of that the Intensive use factor is very high in this case it's 98 uh intensive use which if we're to use a factor of one that's a hundred percent intensive use an example of 100 intensive use purpose would be like a public road a freeway a highway things of that sort where really that roadway is really the only use that could be you know or nor you know compatible uses with that public roadway so we full we pay
011or charge the full factor for that use the other use that is part of this transmission line project there are the service roads and we had established a 25 intensive use factor for the service roads and that being because the roads that are being used are you know not frequently used or used to maintain the line check for the stability so they're not intensely used like a public roadway for example so what we did for you in the package as well is we there's also a an exhibit that identifies or at least shows the sections that the school for the deaf and blind are the beneficiary of of all the all the sections throughout the project there were two different sections I'm sorry four different five different sections in different township ranges and of those
012sections there were to the two different uses totaling of 25.239 Acres so that 239 acres is one of the factors used in the calculation of the rent so our rights away are established by a formula as mentioned and the formula is noted also in the um in the exhibit it's really the land value times the amount of Acres times the Intensive use Factor times the what we call the the turn the uh the term Factor the date of palm as the right away issue for so this is a 50-year instrument with 25-year pay terms meaning every 25 years there's a re-evaluation of the land and the proponent gets billed additional you know period so of the 50 years there's we call two pay terms 225-year paid terms so the first pay is what we are
013coming to the board for today uh to request approval of and it's the the total for the project was four million nine hundred thousand nine hundred and thirty thousand five hundred and three dollars um I know that's one of the questions is you know why did the board why does the school for deaf and blind get such a small you know percentage of that and I want to make sure that you understand it's not attributed to a percentage it's attributed to the actual Parcels that this line traverses across which is very few in relationship to the acreage of the total project so 25 acres of over 3 800 acres is for from uh land reserved for the school for the deaf and blind so we take those calculations as shown in the worksheet and we
014calculated that out to be the total cost of 21 593 dollars so that's how that's that dollar amount is established and it's pretty consistent here at the land Department um I've been here this is my 21st year um every time we have an application that the school for the deaf and blind is the beneficiary we have to identify the income to be generated for the school for deaf and blind and we have to present that to your board as we've done on this application as well um so that kind of explains and answers uh question number two that was brought to the board is so I'll pause there for a moment and if there's anything else I can answer any follow-up questions foreign for a follow-up at this point okay I'll move on to question
015number three if the board denies the request what are the repercussions well the repercussions will be huge for the land department for the proponent and for you know the renewable energy project for the United States if this this application was was denied the proponent the sun Zia transmission would have to reroute the line to avoid you know School for the Deaf of mine parcels and go through the approval process again or possibly even go through the federal mepa process and in addition to that there wouldn't be any income generated so therefore there wouldn't be any um any Revenue you know distributed to the school for the Devon blind so it's pretty um you know it's it's a big project for us it's a big project for the proponent for the Renewal Energy so we're hoping
016the board really reconsiders their decision on this application so how much the next question uh unless there's questions for that I don't think there might or maybe there is a pause a moment for any questions on that I think you can just go ahead okay so the next question was um how much land do you have in the trust so the retrust reserved 83 672 Acres in the state of Arizona for the school for the deaf and black as a beneficiary so throughout the State of Arizona there are Parcels identified totaling at 83 plus thousand acres in the packet I also provided a you know an exhibit of our on site or website Parcel Viewer that does have a a layer that identifies all of the beneficiaries for the trust um for their primitive fund
017and in that Legend you'll see the school for deaf and blind and have identified on that exhibit you know Parcels that that deaf and blind are the beneficiary of this is just a small example of where the deaf and blind has land for the beneficiary in the state of Arizona this happens to be around the Picacho Peak area but there are Parcels throughout the state so again when we permit use of State trust that traverses across those parcels school for the deaf and blind would benefit from income generated from that use in addition attached in your packet is the actual approval that was presented to our commissioner and to the board of appeals and in that package as well is what we call trackbook descriptions so our credential section identifies you know all of the
018parcels by section in Township and that identifies how many acres of that use traverses across that section and in that package we might you know identify by highlighted in yellow the school for the deaf and line parcels and you'll see the acreages for each of those sections and if you were to total up all of those highlighted yellow uh sections that's where the 25 plus acres comes from any questions related to how much land school for the Devon blind has on state Trust I think the information you presented us was pretty clear pretty straightforward thank you superintendent so what agencies participate in the trust there aren't any other agencies with the trust it's just the land Department we used to have a few years back we used to have Forest as part of our agency
019but they have branched off and operate on their own um we manage about 10 million eight well now about 9.2 million acres in Arizona State we had about 10 million uh just for some information regarding their trust you know there's two separate you know buckets of or funds that we you know um we allocate revenue from the trust into so just to explain to every every you know every dollar that we earn from the use of State trust then a hundred percent of that money goes to the beneficiaries it gets distributed based on these Parcels most of them being common schools so our agency operates from um a budget established by the legislature so we don't use any income to operate the agency 100 of the income gets generated gets distributed to the beneficiaries and
020that income is uh distributed I'm sorry in two different ways there's a Permanent Fund that income gets uh distributed to and then there's an Expendable fund the difference between the two are the Primitive fund is a fund that we distribute funds for all of our sales all of our natural products uh things that we dispose of so those would be any for us and right away it would be Perpetual rights of way uh and would be commercial sales that are in fee and also from our minerals division it could be our mineral section could be you know sand and gravel it could be a native plant it could be other things that sort all of those that Revenue goes into the Permanent Fund which is managed by the state treasury and currently that fund has
021about 7.5 billion dollars in that fund and the fund distributes that income on a quarterly basis to the beneficiaries again based on this you know this distribution of beneficiaries the Expendable fund is the income generated from the trust for leases uh either short-term or long-term leases that aren't that permanently disposed of so meaning we might issue you know easements or rights across our land for a shorter term for rights of way we do them for 10 years 50 years we have some for 75 years that income for those shorter term non-permanent but go to the Expendable fund and that gets distributed on a monthly basis so I have a couple of some numbers that we generated for the school for the deaf and blind uh over the past three years and I'll share that with
022you I'm going to give you a ask you to hold for one second I just want to have it known on record that um Catherine senko needs to drop off but we still have forums so you can continue thank you so in the Expendable fun and year in the fiscal year 2020 our physical year ends June 30th so in 2020 thank you for the presentation I'm signing off now take care so the Expendable Fund in the year 2020 we generated 144 944 dollars in the Permanent Fund for 2020 we distributed 52 140 dollars in fiscal year 2021 we distributed 181 403 dollars to the school for Devin blind and in the Permanent Fund it was 5 692 dollars in physical year 2022 and give me a second here my screen went blank I'm sorry can
023you still hear me we can okay thank you my screen just went dark for a second so give me a second years so I'll finish up when physical year 2022 we distributed 338 227 to the school for deaf and blind and in the Primitive fund a distribution of 163 628 was uh distributed I'll pause there for a moment and see if you have any additional questions for me does anyone have any additional questions sometimes I think we're okay do you have anything else you want to share with us otherwise I would be open to further questions discussion or emotion I do not have anything further to present so thank you so much I appreciate it thank you so at this point if there are no other questions or discussion I would entertain emotion to see
024you Colette yeah I'll make a motion to approve the um contracts [Music] I have a motion do I have a second Glendale second trying to get my camera working all those in favor if you could come on camera and at least hands up or thumbs up I I I'm not on camera but I okay any opposed abstentions motion carries thank you very much gentlemen we really appreciate your time today yeah thank you thank you for the opportunity I mean much appreciated moving on to agenda item three um do I have a motion for adjournment this is Linda I moved to adjourn this meeting second this is Colette I will second the motion all those in favor say aye bye thank you all I appreciate your time today and for quickly coming together on this it
025was important and I'm glad we were able to get it done um thank you again and you guys have a great rest of your evening thank you thank