The Governor and Cabinet - Florida Department of State

Cabinet Affairs

AGENDA

BOARD OF TRUSTEES OF THE INTERNAL IMPROVEMENT TRUST FUND

JUNE 12, 1997

Item 1 Minutes

Submittal of the minutes of the April 29, 1997 Cabinet meeting.

RECOMMEND ACCEPTANCE

Item 2 The Nature Conservancy, Inc./Grafton Groves, Inc./Assignment of Option Agreement/Lake Wales Ridge Ecosystems (Flat Lake) CARL Project

REQUEST: Consideration of an assignment of an option agreement to acquire approximately 120.5 acres within the Lake Wales Ridge Ecosystems (Flat Lake) CARL project from The Nature Conservancy, Inc. (TNC).

COUNTY: Lake

LOCATION: Section 12, Township 23 South, Range 26 East

CONSIDERATION: $445,475 ($432,500 for the acquisition; $12,975 for the purchase of the option agreement)

APPRAISED BY

REVIEW String Phillips APPROVED PURCHASE OPTION

NO. PARCEL ACRES (05/25/95) (04/17/95) VALUE PRICE DATE

710001 Grafton 120.5 $485,000 $420,000 $485,000 $432,500 120 days

Groves, Inc. after BOT approval

STAFF REMARKS: The Lake Wales Ridge Ecosystems CARL project is ranked number 1 on the CARL Priority Project List approved by the Board of Trustees on February 13, 1996, and is eligible for negotiation under the Division of State Lands' Land Acquisition Workplan. This project contains 33,031 acres, of which 1,250 acres have been acquired by Southwest Florida Water Management District and 12,512 acres have been acquired or are under agreement to be acquired by the Board of Trustees. If the Board of Trustees approves this agreement, 19,148.5 acres or 58 percent of the project will remain to be acquired.

Pursuant to a multi-party acquisition agreement entered into between the Division of State Lands (DSL) and TNC, TNC has acquired an option to purchase this 120.5-acre parcel from Grafton Groves, Inc., a Florida corporation. After this acquisition is approved, the Board of Trustees will acquire the option from TNC for $12,975, which represents agreed upon compensation to TNC for overhead associated with acquiring the option. The Board of Trustees may then exercise the option and purchase the property. The assignment of option agreement provides that payment to TNC is contingent upon the Board of Trustees successfully acquiring the property from the owner. The assignment of option agreement further provides that in no event will the purchase price for the option and the purchase price of the property exceed the DSL approved value of the property.

At the time of closing, the sellers will convey to the purchaser, at no additional cost, a 30-foot wide, perpetual, non-exclusive easement for the purpose of access over other lands belonging to the seller.

All mortgages and liens will be satisfied at the time of closing. In the event the commitment for title insurance, to be obtained prior to closing, reveals any other encumbrances which may affect the value of the property or the proposed management of the property, staff will so advise the Board of Trustees prior to closing.

Board of Trustees

Agenda - June 12, 1997 Page Two

Item 2, cont.

The certified survey will be provided by the purchaser. The environmental site assessment will be provided by the seller with the purchaser reimbursing the seller's approved environmental site assessment costs in excess of $2,500.

The high, sandy, Lake Wales Ridge, stretching south from near Orlando almost to Lake Okeechobee, was originally covered with a mosaic of scrub, flatwoods, wetlands, and lakes. The scrub is unique in the world - it is inhabited by many plants and animals found nowhere else - but it has almost completely been converted to citrus groves and housing developments. The Lake Wales Ridge Ecosystems CARL project is designed to protect the best remaining tracts of this scrub and the ecosystems associated with it, thereby preserving several endangered species and allowing the public to see examples of the unique original landscape of the ridge.

This property will be managed by the Department of Agriculture and Consumer Services, Division of Forestry under a single-use concept as a unit of the Lake Wales Ridge Ecosystems.

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

(See Attachment 2, Pages 1-40)

RECOMMEND APPROVAL

Item 3 FG&FWFC/W. E. Torode, III Option Agreement/Survey Waiver/Caravelle Ranch Wildlife Management Area

REQUEST: Consideration of (1) an option agreement to acquire 10 acres within the Caravelle Ranch Wildlife Management Area from W. E. Torode, III; and (2) a request for survey waiver.

COUNTY: Putnam

APPLICANT: Game and Fresh Water Fish Commission

LOCATION: Section 22, Township 11 South, Range 25 East

CONSIDERATION: $13,500

APPRAISED BY

REVIEW Arline APPROVED PURCHASE OPTION

NO. SELLER ACRES (10/16/96) VALUE PRICE DATE

710002 Torode 10 $16,000 $16,000 $13,500 200 days after

BOT approval

STAFF REMARKS: This acquisition was negotiated by the Game and Fresh Water Fish Commission (GFC) under the Preservation 2000 program. This property is within the Caravelle Ranch Wildlife Management Area and is ranked number 21 on the current GFC Acquisition List.

Board of Trustees

Agenda - June 12, 1997 Page Three

Item 3, cont.

A waiver of the requirement for survey of this parcel is being requested pursuant to section 18-1.005, F.A.C., because, in the opinion of the Bureau of Survey and Mapping, the parcel to be acquired meets all of the following conditions:

the parcel is surrounded by state-owned land;
the parcel is located within a section which was surveyed in 1992 by Moorhead Engineering, Inc. and the survey drawing is acceptable for computing acreage;
the parcel is in its natural unimproved condition; and
the boundary of the parcel does not adjoin fences or improvements other than those managed by the state.

While this parcel is being recommended for a waiver of survey at this time, should the title commitment reveal a substantive surveying or surveying related issue which impacts the parcel, a certified survey will be provided by GFC prior to closing. In the event a full survey is waived, a professional land surveyor will inspect the property for any visible evidence of improvements or potential boundary issues.

An environmental site assessment will be provided by GFC prior to closing.

The property will be managed by the GFC as an addition to the Caravelle Ranch Wildlife Management Area.

This acquisition is consistent with section 187.20(10), the Natural Systems and Recreational Lands section of the State Comprehensive Plan.

(See Attachment 3, Pages 1-21)

RECOMMEND APPROVAL

Item 4 George Diercks Option Agreement/Survey Waiver/Cayo Costa Island CARL Project

REQUEST: Consideration of (1) an option agreement to acquire approximately 17.8 acres within the Cayo Costa Island CARL project from George Diercks; and (2) a request for survey waiver.

COUNTY: Lee

LOCATION: Section 18, Township 44 South, Range 21 East

CONSIDERATION: $100,000

APPRAISED BY

REVIEW (Bowen) APPROVED PURCHASE OPTION

NO. OWNER ACRES (09/27/96) VALUE PRICE DATE

710003 Diercks 17.8 $100,000 $100,000 $100,000 06/30/97

STAFF REMARKS: The Cayo Costa Island CARL project is ranked number 6 on the CARL Mega-Multiparcel Project List approved by the Board of Trustees on February 13, 1996, and is eligible for negotiation under the Division of State Lands' Land Acquisition Workplan. This project contains 1,932 acres, of which 1,631 acres have been acquired or are under agreement

Board of Trustees

Agenda - June 12, 1997 Page Four

Item 4, cont.

to be acquired. After the Board of Trustees approves this agreement, 283 acres or 15 percent of the project will remain to be acquired.

A waiver of the requirement for a survey of this parcel is being requested pursuant to section 18-1.005, F.A.C., because, in the opinion of the Bureau of Survey and Mapping, the parcel to be acquired meets all of the following conditions:

the parcel is surrounded by state-owned land or land the state intends to acquire;
the referenced parcel is located within Government Lots 1 and 2, Section 18, Township 44 South, Range 21 East, which was surveyed in 1987 by Johnson Engineering, Inc., and the survey drawing is acceptable for computing acreage;
the parcel is in its natural unimproved condition; and
the boundaries of this parcel do not adjoin fences or improvements other than those managed by the state.

While this parcel is being recommended for a waiver of survey at this time, should the title commitment reveal a substantive surveying or surveying related issue which impacts the parcel, a certified survey will be provided by the purchaser prior to closing. In cooperation with the managing agency, the Division of State Lands will acquire any special purpose survey work necessary for the effective management of the property.

A title insurance policy will be provided and an environmental site assessment may be provided by purchaser prior to closing. A mass environmental site assessment was performed on this project and no contaminants were discovered. Prior to closing, the managing agency will perform a site inspection and, as in prior purchases in this project, unless contaminants are found, a site specific environmental site assessment will not be performed.

Cayo Costa Island is a member of a chain of sandy barrier islands, including North Captiva, which protects the entrance to Charlotte Harbor, one of the largest and most productive estuaries in Florida. The Cayo Costa Island project will protect the beaches, dunes and hammocks of these islands--the largest barrier islands in natural condition in southwest Florida--while giving the residents and tourists a beautiful natural shore to enjoy for years to come.

This property will be managed by the Division of Recreation and Parks as part of Cayo Costa State Park.

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

(See Attachment 4, Pages 1-17)

RECOMMEND APPROVAL

Board of Trustees

Agenda - June 12, 1997 Page Five

Item 5 Dade County Conveyance

REQUEST: Consideration of a request to convey 1.2 acres, more or less, of state-owned land to Dade County.

COUNTY: Dade

Deed No. 29893

APPLICANT: Division of State Lands

LOCATION: A portion of Section 16, Township 53 South, Range 40 East

STAFF REMARKS: On May 8, 1956, Dade County deeded 1.2 acres, more or less, to the State of Florida for the use and benefit of the Florida Livestock Board (FLB). The deed specified that the land be used only for the purposes of the FLB, or its successors, and that should the land be used for any other purpose, or remain unused for a period of five years, title would revert to the county. In 1972, the property was conveyed to the Board of Trustees by the Department of Agriculture and Consumer Services (DACS), successor in title to the FLB. DACS' Division of Animal Industry has been managing the property as a diagnostic lab, but is no longer using the site. On May 25, 1995, DACS requested that its lease be terminated. During the course of surplusing the property, staff learned of the reverter in the deed and contacted the county. Dade County has indicated that it is prepared to take title to the property. The county owns land adjacent to the lab site and has several departments that have a need for the facility.

A consideration of the status of the local government comprehensive plan was not made for this item. The Department of Environmental Protection has determined that land conveyances are not subject to the local government planning process.

(See Attachment 5, Pages 1-9)

RECOMMEND APPROVAL

Item 6 Florida Rock Industries, Inc. Lease Extension

REQUEST: Consideration of a request to extend the term of that portion of lease number 2429 assigned to Florida Rock Industries, Inc., to provide for two additional 10-year renewal options and increased rental/royalty payments.

COUNTY: Dade

Lease Number 2429

APPLICANT: Florida Rock Industries, Inc.

LOCATION: A portion of Sections 22 and 23, Township 53 South, Range 39 East

CONSIDERATION: Minimum annual rental payment (until depletion) of $250,000 against a royalty of $.34 per long ton of rock mined or seven percent of the net sales price (gross sales receipts by definition) of rock sold, whichever is greater.

STAFF REMARKS: On April 14, 1970, the Board of Trustees leased 1,000 acres, more or less, to Seminole Rock Products, Inc., (Seminole) for limerock mining. The lease was granted

Board of Trustees

Agenda - June 12, 1997 Page Six

Item 6, cont.

for an initial term of ten years, with two additional 10-year extensions. In return, Seminole agreed to pay $25,000 in rent for each of the first two years of the lease and $40,000 per year thereafter. Under the lease, these rental payments were to be credited annually against royalties of seven cents per short ton or four percent of sales, whichever was greater. Mining of the property commenced in 1972.

On June 17, 1974, the Board of Trustees consented to Seminole subleasing its leasehold interest to Vulcan Materials, Inc. (Vulcan). On February 27, 1987, Seminole formally assigned its rights under the lease to Vulcan, which then became the sole lessee.

On May 17, 1996, Vulcan executed a partial assignment of its rights under lease number 2429 to Florida Rock Industries, Inc., (FRI). Vulcan assigned to FRI "that part of Section 22, Township 53 South, Range 39 East described in the Lease" and the "West 150 feet of the South 2,260 feet of Section 23, Township 53 South, Range 39 East, less the South 660 feet thereof." This assigned area was characterized in the assignment as "Section 22." Vulcan retained for its own use the balance of the leasehold, that is, all remaining portions of Section 23 covered by the lease. Vulcan and FRI agreed to a pro rata division of the leasehold rents and royalties as applicable.

FRI is now requesting that the Board of Trustees amend that portion of lease number 2429 assigned to FRI to extend the term to allow two additional 10-year terms in which to carry out mining activities in Section 22 of the leasehold. In return for the Board of Trustees' grant of this lease amendment, FRI is willing to provide substantially greater rental/royalty payments compared to the original compensation which has not changed since 1970.

Because FRI desires to build a new rock crushing plant in the vicinity of the leased area, FRI would be able to produce sized stone from Section 22 instead of unsized roadbase/fill material. Because sized stone has a greater value than the roadbase material that has historically been produced by Vulcan from Section 23 of the property, FRI would be able to offer the Board of Trustees a higher market value rate of return on an extended lease for Section 22.

FRI and the Division of State Lands have negotiated a fixed annual rental payment to be credited against annual royalties calculated on a per long ton mined basis or percentage of sales, whichever is greater. FRI will guarantee a minimum annual rental payment (until depletion) of $250,000 against a royalty of $.34 per long ton of rock mined or seven percent of the net sales price (gross sales receipts by definition) of rock sold, whichever is greater. FRI will supply monthly operating reports showing the tonnage mined from the Section 22 leasehold during the previous month. As soon as royalties exceed the $250,000 guaranteed rental payment, FRI will furnish the Board of Trustees with monthly royalty payments in accordance with the monthly reports of mined material. Should actual tonnage mined on an annual basis by FRI be worth less than $250,000, no carry forward of rental credit will apply, and under no circumstances will the Board of Trustees' return on the lease be less than $250,000.

Ordinarily, a new lease would be offered on the basis of competitive bidding upon the expiration of the existing lease. However, because FRI is already the lessee of the property and is the owner of other parcels in the vicinity of Section 22, it is in a better position than other producers to maximize the return to the State in both the short and the long term. FRI estimates that approximately 30 million long tons of limerock reserves remain in the Section 22 leasehold. If the lease amendment is approved, FRI will construct the new crushed stone plant and expects to mine on average 1.8 million long tons per year. At the proposed $.34 per long ton royalty rate, the income stream would be approximately $612,000 per year. If the lease

Board of Trustees

Agenda - June 12, 1997 Page Seven

Item 6, cont.

amendment is not approved, FRI has indicated that it will accelerate its mining of Section 22 under the existing royalty schedule until the expiration of the lease in April, 2000. FRI anticipates that mining could occur at the rate of 3,125,000 short tons per year until expiration, yielding approximately $245,000 per year for the remaining three years of the lease. Thus, under the proposal, the State will receive more revenue for less rock until the expiration date of the existing lease and will have greater remaining reserves to generate future royalties at the higher rate.

The area under lease to FRI has also been discussed as possible exchange property for land FRI owns in the Pennsuco Wetlands to the west. An effort to preserve the Pennsuco Wetlands as a hydrologic buffer to the Everglades is under way by the Department of Environmental Protection, Dade Environmental Resource Management, and the U.S. Army Corps of Engineers. As yet, no agreement has been reached regarding the terms of such an exchange. Approval of this lease modification will not adversely affect future negotiations regarding the exchange.

A local government comprehensive plan has been adopted for this area pursuant to section 163.3167, F.S.; however, the Department of Community Affairs (DCA) determined that the plan was not in compliance. A compliance agreement between DCA and the local government has been finalized. The proposed action is consistent with the adopted plan.

(See Attachment 6, Pages 1-11)

RECOMMEND APPROVAL

Item 7 Buckeye Florida, L. P. Submerged Land Easement

REQUEST: Consideration of an application for (1) an 80year sovereignty submerged land private easement containing 54,234.52 square feet, more or less, for a proposed effluent pipeline and an outfall/diffuser structure; and (2) severance of 2,420 cubic yards of sovereign material.

COUNTY: Taylor

Application No. 622768899

Easement No. 29767

APPLICANT: Buckeye Florida, Limited Partnership, a Delaware limited partnership

LOCATION: Section 07, Township 05 South, Range 08 East; Section 09, Township 05 South, Range 07 East; Section 36, Township 05 South, Range 05 East, and an unsurveyed portion of Township 06 South, Range 05 East, in the Fenholloway River, Class V Waters, near the City of Perry, within the local jurisdiction of Taylor County.

Aquatic Preserve or Outstanding Florida Waters: No

CONSIDERATION: $3,325, representing (1) $300 as a one-time fee for the easement with no enhanced value to the upland activity, pursuant to an appraisal reviewed and accepted by the Bureau of Appraisal; and (2) $3,025 for the severance of sovereign material computed at the rate of $1.25 per cubic yard pursuant to section 1821.011(3)(a)3, F.A.C.

Board of Trustees

Agenda - June 12, 1997 Page Eight

Item 7, cont.

STAFF REMARKS: The applicant operates a dissolving kraft pulp mill near Perry, Florida. Since 1954, treated wastewater has been discharged into the Fenholloway River approximately 24 miles upstream from the Gulf of Mexico. The pulp mill currently discharges approximately 50 million gallons of treated effluent daily into the river. The Fenholloway is the only Class V waterbody in Florida, based on 1947 legislation declaring Taylor County a manufacturing industrial area. Designated uses of Class V waterbodies include navigation, utility, and industrial uses.

The state is required by federal law (Environmental Protection Agency) to conduct a Use Attainability Analysis (UAA), a structured scientific assessment of the factors affecting attainment of Class III uses, for waters not meeting Class III standards suitable for recreation and habitat for fish and wildlife. Based on the UAA, it was determined that Class III uses are technologically and environmentally attainable for the Fenholloway, provided that the effluent discharge is relocated as referenced herein. As a result, the Environmental Regulation Commission reclassified the Fenholloway River to a Class III waterbody on December 15, 1994, to become effective on December 31, 1997.

As part of the UAA, an "alternatives analysis" to determine the most feasible method of complying with the more stringent criteria for Class III waters was performed and it was proposed that the applicant: (1) build a pipeline to relocate the current discharge point downstream to the estuary (1.5 miles upstream from the river's mouth) where more dilution is available; (2) modify facility processes to reduce the amount of pollutants generated; and (3) add dissolved oxygen directly into the wastewater stream.

To implement these changes, the applicant is proposing to construct a 15.3-mile, 60-inch inside diameter treated effluent pipeline, an effluent pump station, an oxygenation facility, an outfall/diffuser structure, a temporary working trestle, temporary sheet piling, and two temporary cofferdams. The applicant must obtain several permits from the Department of Environmental Protection (DEP), including an environmental resource permit (ERP), a National Pollution Discharge Elimination System (NPDES) industrial wastewater permit, and an authorization to use sovereignty submerged lands.

The only portions of the proposed project located on sovereignty submerged land are two subaqueous pipeline river crossings and an outfall/diffuser structure. The proprietary authorization, a private easement, addresses this request to use sovereignty submerged land. The three sites total 1.25 acres: the two pipeline river crossings are 0.13 and 0.23 acre; the third site, the outfall/diffuser segment, is 0.89 acre, and will be located near the mouth of the river, where the treated effluent will mix with estuarine waters.

The applicant is also proposing to utilize sovereignty submerged land within the proposed easement area for temporary construction and maintenance activities associated with the placement and maintenance of structures within the easement area. Temporary cofferdams will be constructed for the two river pipeline crossings, and a temporary working trestle and sheet piling will be utilized for construction of the outfall/diffuser segment. All temporary construction-related equipment and activities will be located within the proposed easement boundaries. The construction equipment will be removed and the construction activities will cease within 30 days after completion of construction and operational verification (estimated to be approximately one year), per a specific condition of the DEP draft ERP.

The applicant is proposing to dredge approximately 2,420 cubic yards of sovereign material for placement of the subaqueous pipe. The spoil will be disposed of in an upland spoil site.

Board of Trustees

Agenda - June 12, 1997 Page Nine

Item 7, cont.

DEP issued a Notice of Intent to Issue an ERP which addresses impacts to wetlands and surface waters from construction of the pipeline along the 15.3-mile route from the current discharge point to the estuary. It also includes conditions on erosion control and the management of stormwater runoff during the construction of the pipeline. The project involves impacts to approximately 20.06 acres of wetlands and surface waters, including permanent filling of 0.39 acre of wetlands, and permanent conversion of 5.48 acres of forested wetlands to a non-forested condition. As mitigation for impacts to wetlands, a 25-acre site at San Pedro Bay, the headwaters of the Fenholloway River, will be ecologically enhanced via construction of a water control structure and will be placed in a conservation easement.

DEP also issued a draft NPDES industrial wastewater permit which addresses protection and enhancement of water quality associated with the operation of the wastewater facility. The project is designed to limit the amount of pollutants which may be discharged and requires special studies to determine the impact of the discharge on water quality, seagrasses, and fish in the estuary and the Gulf of Mexico.

In addition, DEP issued a draft Site Specific Alternative Criteria (SSAC) for a portion of the Fenholloway River. The SSAC is a change to water quality standards in a location where natural conditions do not meet standards. The SSAC is appropriate in this instance because the natural background dissolved oxygen levels in the river do not meet Class III standards. It is anticipated that the final SSAC will be issued in conjunction with the NPDES industrial wastewater permit.

The Board of Trustees authorized a rule amendment, section 18-21.00401, F.A.C., on September 14, 1995, to "link" the two processes of regulatory and proprietary reviews and authorizations. Because this application was received on August 31, 1995, prior to October 15, 1995, the effective date of the linkage rule, the two decisions are not linked. The Notice of Intent to Issue an ERP was published on January 10-11, 1997, and was challenged by 14 petitioners. However, only six petitioners remain to go to an administrative hearing in early July. The ERP cannot be issued until the petitions are resolved.

This project qualifies for processing under the September 14, 1995, delegations of authority, section 18-21.0051, F.A.C. However, in light of heightened public concern and the controversial nature of the project, staff is of the opinion that it should be elevated to review by the Board of Trustees.

Therefore, staff requests that the Board of Trustees consider the easement request now, rather than waiting for resolution of the challenges, so that, if necessary, any challenge to the Board of Trustees' action on the easement can be combined with the ERP challenge and be considered by an administrative law judge at an administrative hearing. Staff is recommending approval of the easement, subject to the special approval conditions for issuance of the easement that include the applicant obtaining a final DEP ERP within two years of Board of Trustees' action, payment of the one-time fee for the easement, and payment of the dredging fee.

The DEP Notice of Intent to Issue an ERP includes a draft permit with specific conditions addressing the recommendations of the Division of Marine Resources regarding protection of manatees during construction and blasting activities. The proposed effluent pipeline and appurtenant structures are necessary to support the upgrading/reclassification of the river and are considered to be in the public interest. No seagrasses or submergent aquatic vegetation is present at the three sites comprising the easement.

Board of Trustees

Agenda - June 12, 1997 Page Ten

Item 7, cont.

The applicant submitted an appraisal and the Bureau of Appraisal accepted the appraiser's conclusion of value of $300 for the easement with no enhanced value to the upland activity.

A local government comprehensive plan has been adopted for this area pursuant to section 163.3167, F.S. The proposed action is consistent with the adopted plan according to a letter received from the Taylor County Board of County Commissioners.

(See Attachment 7, Pages 1-11)

RECOMMEND APPROVAL SUBJECT TO ISSUANCE OF A DEP ENVIRONMENTAL RESOURCE PERMIT WITHIN TWO YEARS OF BOARD OF TRUSTEES' ACTION AND THE SPECIAL APPROVAL CONDITIONS.

Item 8 Cross State Towing Company Submerged Land Lease

DEFERRED FROM APRIL 15, 1997 AGENDA

DEFERRED FROM MARCH 11, 1997 AGENDA

DEFERRED FROM NOVEMBER 19, 1996 AGENDA

REQUEST: Consideration of an application for a modification of a fiveyear sovereignty submerged land lease to contain a total of 113,540 square feet, more or less, for an expansion of a commercial marine repair facility.

COUNTY: Duval

Lease No. 160302692

APPLICANT: Cross State Towing Company

LOCATION: Sections 41 and 42, Township 02 South, Range 27 East, in the St. Johns River,

Class III waters, within the local jurisdiction of the City of Jacksonville.

Aquatic Preserve: No

Outstanding Florida Waters: No

CONSIDERATION: $15,182.65 representing (1) $13,531.92 as the initial lease fee, computed at the base rate of $0.1101 per square foot, and including the initial 25 percent surcharge payment for the additional area; and (2) $1,650.73 for lease fees in arrears for the period of February 13, 1996, to present. Lease fees in arrears computed at the base rate of $0.1070 per square foot for the period of February 13, 1996, through March 1, 1997, and at the base rate of $0.1101 per square foot for the period of March 1, 1997, to present. Sales tax will be assessed pursuant to section 212.031, F.S., if applicable.

STAFF REMARKS: The Board of Trustees authorized a rule amendment on September 14, 1995, to "link" the two processes of regulatory and proprietary reviews and authorizations. The rule became effective October 12, 1995. As a result of this linkage, the recommended Department of Environmental Protection (DEP) regulatory permit decision and the recommendation to the Board of Trustees on the proprietary authorization are contained in one document, the "Consolidated Notice of Intent to Issue", which is attached. The attached consolidated intent contains a recommendation for issuance of a permit under Part IV of chapter 373, F.S., and a recommendation for granting authorization to use sovereignty

Board of Trustees

Agenda - June 12, 1997 Page Eleven

Item 8, cont.

submerged lands under chapter(s) 253 and 258, F.S., for the activity described therein. This recommendation is provided to the Board of Trustees pursuant to section 373.427(2), F.S. A description of the requested activity is provided in Section I, "Description of the Proposed Activity." The specific basis for recommending approval of the authorization to use sovereignty submerged lands is contained in Section III "Background/Basis for Issuance."

Approval by the Board of Trustees is requested only for those aspects of the activity which require authorization to use sovereignty submerged lands. If the Board of Trustees approves the request to use sovereignty submerged lands and the activity also qualifies for an environmental resource permit and no challenges are successful, the Consolidated Notice of Intent will be issued and will contain general and specific conditions. In the event the Board of Trustees denies the use of sovereignty submerged lands, whether or not the activity otherwise qualifies for an environmental resource permit, the DEP will issue a "Consolidated Notice of Denial" for both the environmental resource permit and the authorization to use sovereign, submerged lands.

On November 19, 1996, and March 11, 1997, the Board of Trustees deferred a request for the expansion of this facility to allow the City of Jacksonville (City) time to resolve its concerns with the lessee and to consider adoption of a City resolution, either in support of or in opposition to the lessee's request. The City's Office of General Counsel negotiated a compromise lease expansion area with the lessee totaling 113,540 square feet, encompassing both the nearshore and offshore lease areas. This lease area changes the footprint of the lease and encompasses 14,768 square feet less than the 128,308 square feet area that was originally requested by the lessee. The City's General Council also specified the construction of a low level, recreational style "Florida Floats" type dock along with additional terms for operation of the facility. The applicant, however, has applied for a 200 feet long by 10 feet wide by 6 feet high (5 feet above water) floating work dock. On April 8, 1997, the City Council passed Resolution #96-947 with additional terms; therefore, the item was deferred on April 15, 1997, to allow DEP staff time to review the City's resolution and allow all concerned parties to participate.

The DEP subsequently determined that some of the terms specified in Exhibit "A" to the resolution are not consistent with the customary constraints or conditions placed on requests for the use of sovereignty submerged lands and are not deemed necessary to protect and manage sovereignty lands. Other terms of Exhibit "A" have either been incorporated as a special lease condition or are considered more appropriate as specific conditions of the environmental resource permit.

Terms 1 and 2 of Exhibit "A" to the resolution have been incorporated in specific conditions 9 and 10 of the draft environmental resource permit.

Term 7 relates to a standard condition of all Board of Trustees' sovereignty submerged land leases and has been modified in accordance with the conditions of the existing lease and has been included as special lease condition 4.

Terms 3, 4 and 6 are not reasonably related to Board of Trustees' concerns when issuing proprietary authorizations for the use of sovereignty submerged lands, i.e., resource protection, preemptive use of submerged lands, navigational safety issues, public interest and access, etc. These terms are more appropriate from a local police power zoning perspective, and by their nature, would therefore be difficult for staff to enforce.

Term 5 is not included as a special lease condition because the City and lessee agree to regard this as a separate issue to be presented to the Board of Trustees at a later date.

Board of Trustees

Agenda - June 12, 1997 Page Twelve

Item 8, cont.

Term 8 is not included as a special lease condition since many of the City's terms noted above are considered inappropriate as conditions of this lease.

The lessee is now requesting after-the-fact authorization for the existing preemption of 11,560 square feet of sovereignty submerged lands, which is calculated in the total lease area, in conjunction with the expansion of the existing 76,077 square feet sovereignty submerged land lease for a commercial marine repair facility to 113,540 square feet. This would include the construction of a 200 feet long by 10 feet wide by 6 feet high (5 feet above water) floating work dock.

On May 5, 1981, the Board of Trustees granted the lessee an original lease area containing 24,475 square feet of sovereignty submerged lands for docks and a mooring area along the lessee's shoreline. The lease was subsequently modified for a total of 32,077 square feet. On December 13, 1994, the Board of Trustees granted the lessee a separate offshore lease area containing 44,000 square feet, for an additional area to moor vessels. These two leases were subsequently combined into one lease, for a total area of 76,077 square feet. The City considered the offshore lease area to be inconsistent with its local comprehensive plan.

The request for a lease for the offshore mooring area was deferred from the November 22, 1994 Board of Trustees meeting to the December 13, 1994 meeting. It was during the November 16, 1994 Cabinet Aides meeting that DEP agenda staff became aware of possible violations at the existing nearshore lease site. Therefore, the request was deferred so that staff could respond to information indicating that there were barges being moored outside the nearshore lease area and a dock extended beyond the lease boundary. Following the meeting, enforcement staff were asked to conduct a site inspection and to specifically verify whether there were mooring and/or structure violations at the nearshore site. Enforcement field staff were already working with the lessee to correct offshore mooring violations. The inspection requested by agenda staff revealed a docking structure outside the lease area and the need for Cross State Towing to obtain temporary authorization for the portion of the dock that extended beyond the lease area. Pursuant to the Board of Trustees' policy, violations should be corrected or, if consistent with rule, placed under temporary use agreement (TUA) prior to the Board of Trustees' consideration. The DEP continued as scheduled to the Board of Trustees with the offshore lease area request because it was viewed as a resolution to unauthorized mooring of vessels by the lessee at another offshore site in the river. The Board of Trustees approved the request for the offshore lease area on December 13, 1994, contingent upon the removal of sunken and derelict barges located outside the nearshore lease area and strict adherence to the boundaries of both lease areas.

Upon compliance with the Board of Trustees' directive to remove the barges and upon receipt of fees assessed for the unauthorized use of sovereignty lands, staff issued a TUA on March 1, 1995, for 11,560 square feet for the portion of the dock extending beyond the nearshore lease boundary and an adjacent mooring area. The TUA provided temporary authorization for use of sovereignty lands for a period of time to allow the lessee time to pursue and obtain a modified lease for the additional area.

The TUA was extended from June 1, 1995, to November 28, 1995, to accommodate the City's request to hold a public hearing in Jacksonville on the originally proposed lease modification for 128,308 square feet. A public hearing was conducted by DEP district staff in Jacksonville on September 27, 1995, to gather local public comment concerning original lease modification request and to present it to the Board of Trustees for consideration. The TUA was again extended to February 13, 1996, to allow the DEP to study and respond to all of the issues raised at the public hearing. In summary, the majority of the objections to the applicant's

Board of Trustees

Agenda - June 12, 1997 Page Thirteen

Item 8, cont.

originally proposed expansion pertained to boating safety, upland property values and zoning, and manatee safety. Staff is of the opinion that all concerns of the public hearing and the City's previous objections have been addressed within staff's purview. A complete public hearing report is attached, along with a copy of the City's previous objections. The TUA expired; however, the lessee was given additional time to meet with the City to agree to a lease area that would be mutually acceptable for presentation to the Board of Trustees. Since no TUA is in place staff is requesting that the Board of Trustees approve lease fees in arrears for the TUA area of 11,560 square feet, from the expiration of the TUA on February 13, 1996, to the present.

The Board of Trustees adopted an administrative fine policy on August 14, 1990. Based on that policy, the lessee was assessed an administrative fine for the unauthorized use of sovereignty submerged lands resulting from the construction of the dock and mooring outside the lease boundary. Staff calculated the administrative fine, pursuant to Board of Trustees' policy, at the rate of $0.50 per square foot. However, because the fine was more than the maximum base fine, the maximum base fine of $2,500 applied. A multiplier of one was applied since staff is recommending approval of the previously unauthorized activity ($2,500). A multiplier of four was applied because the existing facility was under lease which constitutes written notice ($10,000). The total administrative fine was $12,500, which the lessee has already paid.

An environmental resource permit application was filed by the lessee with the DEP on March 7, 1997, for the construction of a 200 feet long by 10 feet wide by 6 feet high (5 feet above water) floating work dock to facilitate the operations of the marine railway system and to modify the existing lease to encompass the modified lease area as specified in the City's resolution. The dock will be located within the expanded lease area. The DEP submitted a copy of the application to the U. S. Army Corps of Engineers on March 7, 1997. Recommendations of the Division of Marine Resources providing for the protection of manatees in the current lease will continue to be included as special lease conditions. There is no submerged vegetation or other significant submerged resources in the proposed area. The project was not required to be noticed.

The proposed modification request is in compliance with chapter 18-21, F.A.C., and there are no objections from other agencies. Therefore, staff is recommending that the Board of Trustees approve the modified lease area encompassing 113,540 square feet. The lessee's request is being presented to the Board of Trustees for consideration because the requested expansion exceeds delegated authority and the request represents an issue of heightened public concern.

A local government comprehensive plan has been adopted for this area pursuant to section 163.3167, F.S.; however, the Department of Community Affairs (DCA) determined that the plan is not in compliance. In accordance with the Compliance Agreement between DCA and the local government, an amendment has been adopted which brought the plan into compliance. The City, by passing Resolution #96-947 with additional terms, has addressed the subject modification request.

(See Attachment 8, Pages 1-68)

RECOMMEND APPROVAL SUBJECT TO THE SPECIAL LEASE CONDITIONS AND PAYMENT OF $13,531.92 AS THE INITIAL LEASE FEE AND $1,650.73 AS LEASE FEES IN ARREARS FOR THE TUA AREA.