BE IT REMEMBERED, that heretofore on the 2nd day of November 2011, there came to be heard matters under the regulatory authority of the Texas Parks and Wildlife Commission in the Commission Hearing Room of the Texas Parks and Wildlife Department Headquarters Complex, to wit:
THE TEXAS PARKS AND WILDLIFE COMMISSION:
THE TEXAS PARKS AND WILDLIFE DEPARTMENT:
PROCEEDINGS 13 COMMISSIONER FRIEDKIN: First order of 14 business is the approval of the previous Committee meeting 15 minutes from the August 24th, 2011, meeting, which have 16 already been distributed. Is there a motion for approval? 17 COMMISSIONER HIXON: So moved. 18 COMMISSIONER SCOTT: Seconded. 19 COMMISSIONER FRIEDKIN: Made by 20 Commissioner Hixon, seconded by Commissioner Scott. All 21 in favor? 22 (A chorus of ayes) 23 COMMISSIONER FRIEDKIN: Any opposed? 24 Hearing none, motion carries. And at this time -- I 25 better announce something before I -- so I don't forget Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 108 1 you. I would like to announce that Committee Item 2 No. 4, regulation of mineral recovery for TPWD Lands and 3 Committee Item No. 10, proposed land sale in Randall and 4 Armstrong Counties sale of approximately 2,014 acres of 5 Palo Duro Canyon State Park have been withdrawn at this 6 time. 7 Committee Item No. 1, update on TPWD 8 progress on implementing land and water plan. 9 MR. SMITH: Thank you, Mr. Chairman and 10 Commissioners. A couple of things. One, I'm proud to 11 say you're the proud owners of a new state park site and 12 that's a wonderful. 13 (A round of applause) 14 MR. SMITH: It's a big deal and we're 15 awfully excited for that to come to fruition and just 16 want to thank all of you for your support. Scott and 17 Ted and Gene and others and The Nature Conservancy who 18 worked so hard on the acquisition of that site are 19 certainly to be commended. A long time coming. But I 20 think that once you see that property, you'll certainly 21 concur that it's every bit worth the wait. Straddling 22 the Palo Pinto and Stephens County line. As y'all know, 23 it's got just wonderful topography and a lot of 24 diversity and a lot of potential as we go forward and 25 really feel like it's going to make a great amenity to Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 109 1 the State Park system. Also, going to fulfill the 2 promise that we made to the people of Fort Worth four 3 years ago and I think that's a very important milestone 4 for this Commission and this Agency as a whole and 5 individuals and entities and foundations in Fort Worth 6 that help fund this with the expectation that this was 7 going to come to fruition. So we look forward to 8 celebrating that with all of you on site and something 9 we want to plan is kind of a donor recognition event and 10 kind of ribbon cutting to help everybody see kind of 11 where their investments have gone. 12 Obviously, never ever would have been 13 able to do this without the support of the private and 14 public philanthropy that came forth from Fort Worth to 15 make it happen and we're very, very grateful for that. 16 So a nice milestone in your State Park system and just 17 wanted to share that with all of you and thank you for 18 your support and leadership. We had a lot of bites out 19 of that apple, and it's nice to see this one be done. 20 So the second thing that I want to share 21 with all of you and certainly the discussion on some of 22 the coastal fisheries matter, a little discussion on the 23 Red Tide outbreak that we've had along the coast. I 24 think as all of you know, that's a naturally occurring 25 phenomena on the Texas coast. We typically see that Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 110 1 alga bloom during the late summer and early fall, 2 primarily though in the lower coast. I think what's 3 unusual about this or a couple of things. One, its 4 severity. Secondly, the fact that it's persisted this 5 long into the fall and beginning of the winter months; 6 but also that really we're finding and our biologists 7 and coastal fisheries are finding it from Galveston all 8 the way down to Boca Chica and so it really expands the 9 entirety of the coast. 10 Certainly, the added salinities in the 11 bay are helping to amplify this. You know, freshwater 12 inflows into the bays are down appreciably and so we're 13 seeing salinity levels in the bays and the mid and upper 14 coasts that are, you know, twice their historic levels. 15 And so, you know, certainly while you know most marine 16 species can handle that, it is creating issues for 17 oysters where we're seeing issues associated with 18 increase in Vibrio, which you know is a parasite on 19 oysters, oyster drill, which is a predator; but also 20 this persistence of Red Tide. 21 And the accumulation of that in oysters 22 can create a toxin that can be passed on to humans that 23 eat infected oysters, neurotoxic shellfish poisoning. 24 And so yesterday, you know, the commercial oyster season 25 was supposed to open. The State Health Services has Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 111 1 closed oyster season along the coast for the foreseeable 2 future and that's a big issue. We haven't seen that in 3 a long time. It's an artifact of a Red Tide outbreak. 4 You know, we get asked a lot what's been 5 the fish kill on the coast. You know, I think our 6 coastal fisheries biologists have estimated to date 7 we've seen about 4 million fish that have been killed by 8 the Red Tide event throughout the coast. You know, the 9 vast majority of those are striped mullet and sardines 10 and so I'm certainly not trying to trivialize the impact 11 there, but we haven't seen a big impact. Recreational 12 and important game fish, I think they constitute less 13 than 1 percent of the dead fish that our biologists have 14 seen. 15 And then also, we're not approximating 16 near the number of fish kills that happened back in '86 17 and '97, when we had upwards of 20 million fish and more 18 die along the coast. So obviously, cold weather helps a 19 lot with helping to contain and harness Red Tide and 20 hopefully we'll get some more of that soon and also some 21 infusion of freshwater inflows into the bays. But it's 22 something that our coastal fishery biologists are 23 watching very, very closely. Recently completed an 24 overfly of the coast to look at it and just wanted to 25 let you know where we're going with that. Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 112 1 So, Mr. Chairman, with that I'll turn it 2 back over to you. 3 COMMISSIONER FRIEDKIN: Thank you. 4 Appreciate it. 5 MR. SMITH: Thank you. 6 COMMISSIONER FRIEDKIN: Item No. 2, 7 summary of conceptual design report for the Battleship 8 TEXAS dry berth project, Scott Boruff and Rich. 9 MR. BORUFF: Mr. Chairman, Commissioners, 10 for the record, my name is Scott Boruff. I'm the Deputy 11 Executive Director for Operations. I've got Mr. Rich 12 McMonagle up here with me, who's the Director of the 13 Infrastructure Division. We're here today to brief you 14 on the latest saga in the Battleship TEXAS project, and 15 we're going to take a little bit of time to give a 16 little bit broader background than we normally do. 17 Before I get started, I would like to 18 give a great big staff welcome to Commissioner Jones and 19 welcome him to the Texas Parks and Wildlife family. One 20 of the reasons we're going to give the Commission a 21 little bit broader background today is to benefit 22 Commissioner Scott and Jones, who have not had the 23 benefit of working with the Battleship in their tenure 24 here and so this is something that's been a part of the 25 Agency a long time and we want you to be sure you Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 113 1 understand the background. 2 The Battleship TEXAS was actually 3 commissioned in 1914. Had a very storied career in both 4 World War I and World War II. Was -- participated in 5 the landings at Normandy, was part of the battles at Iwo 6 Jima and Okinawa; so obviously had a very storied 7 history in those two World Wars. In 1948, it was 8 provisionally transferred to the State of Texas, at the 9 same time that the San Jacinto Battleground was 10 celebrating its 112th anniversary. The ship was 11 directed by the State legislature then to be housed at 12 the San Jacinto Battleground, right on the Houston ship 13 channel there. 14 It was then in 1975 declared a National 15 Engineering Landmark, and in 1976 was declared a 16 National Historic -- or 1977, a National Historic 17 Landmark. The reason I tell you some of this history is 18 that -- and the reason I said provisionally owned is 19 because the Department of the Navy continues to have 20 oversight in many bureaucratic regards of this 21 particular iconic battleship. It has to approve what 22 goes on with the battleship. So even though the State 23 of Texas owns it, it does so under the auspices of the 24 Department of the Navy and Mr. McMonagle can talk a 25 little bit more about that later on if you're Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 114 1 interested. 2 The battleship was ultimately conveyed. 3 It originally was overseen by the State of Texas through 4 a commission called the Texas Battleship Commission. 5 That commission, more or less, had authority over the 6 battleship up until 1983. At that point, the 7 Legislature sunsetted the Battleship Commission and 8 moved the battleship under the jurisdiction of this 9 Commission in 1983. 10 So that's kind of the background. We've 11 been involved with this battleship really since 1948 12 because it was on our site, but we haven't had direct 13 authority over it until 1983. It's been sitting mostly 14 in the mud and saltwater that entire time, so 65 or 70 15 years in the mud and saltwater. It does have, as I 16 said, multiple chapters to the saga of trying to keep it 17 afloat and trying to do the right thing by it. 18 This is kind of a 40,000-foot level 19 picture for those of you that don't -- might not know 20 where the battleship is. As I said earlier, it's right 21 outside of Houston on the Houston ship channel. This is 22 a conceptual design, photograph, or rendering that came 23 out of a 2005 master planning effort which we 24 participated in or we directed actually. You can see 25 where the Battleship TEXAS is moored there down on the Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 115 1 lower left-hand side of this particular rendering. 2 This is a very complex site. The reason 3 I'm doing a little bit of this background is to let you 4 understand that you can't really envision what's going 5 on with the battleship without understanding the entire 6 complex there and so this is the San Jacinto 7 Battleground. Obviously, a key iconic site for the 8 State of Texas. It's where Texas essentially gained its 9 independence over Mexico. 10 We have two major projects going on in 11 parallel out there. The Visitor Center Project has been 12 underway for a long time. Many, many years. I'm sure 13 Mr. Bass can remember when we started that back in his 14 tenure as the Chairman here. We continue to move 15 forward with that project, and then we also have the 16 Battleship Project out there. Probably one of the most 17 complicating factors is this matrix. I'm not going to 18 spend a lot of time sharing with you what each one of 19 these groups do, but I wanted you to understand the 20 complexity. 21 Clearly, the Battleship TEXAS project has 22 involvement and bureaucratic oversight in some regards 23 from the Department of the Navy. The battle -- I mean 24 the visitor's center has similar federal oversight from 25 the Federal Highway Administration because it's funded Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 116 1 through a Federal Highway Administration grant. And so 2 we're dealing at this site with a lot of moving parts, 3 with federal bureaucracy overlayed on top of State 4 bureaucracy and then in the middle you'll see that this 5 site also benefits from our -- as complexities from the 6 fact that there are multiple interested parties out 7 there. Several of which this Commission formally 8 recognizes. The Governor has appointed an advisory 9 board that gives us advice on this site. We have at 10 least three groups that are formally endorsed by the 11 Commission who are, in one form or another, advisory 12 groups or friends groups and then we have other 13 constituents out there who have formed their own 14 interested groups that may or may not share the agenda 15 with some of the other groups and so there's a lot of 16 moving parts. There's a lot of complexity. 17 All these stakeholders don't necessarily 18 always agree on which direction we're heading. And so I 19 wanted you to at least have that background to 20 understand that before we tell you what the latest 21 revision of the study that we have just completed is. 22 And so before I let Rich move forward with this, the 23 realities of this latest study, I would be glad to 24 answer any questions. 25 This slide here is clearly just some of Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 117 1 the applicable federal laws which we are required to 2 comply with as we move forward and have, indeed, slowed 3 these projects down. Sometimes not to our satisfaction. 4 COMMISSIONER DUGGINS: You might, for 5 Dick and Bill's benefit, go into the State Legislative 6 directive and the appropriation. I'm not sure they -- 7 MR. BORUFF: We're going to do that in 8 just a moment as part of the presentation, Commissioner, 9 and then at the end, we'll be glad to take any questions 10 if we leave any -- anybody confused. 11 This is the background I wanted -- I just 12 wanted to set the background before we actually get into 13 the current status of the battleship. All right, I'm 14 going to let Mr. McMonagle take it from here. 15 MR. MCMONAGLE: Thank you, Scott. Good 16 morning, Commissioners. As Scott mentioned, the State 17 of Texas took control of the battleship in 1948. And 18 for the next several decades, the ship was in fine 19 condition. It had just come off active duty. There 20 really weren't any problems. But by the mid 80s, the 21 ship was approaching 40 years of sitting in the same 22 place in the mooring position in the waters of the 23 Houston ship channel and decay was starting to be seen. 24 So in 1988, the ship was towed to Todd's 25 Shipyard in Galveston to have work done. It was the Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 118 1 first dry-dock period that the ship had since the State 2 had taken it over. As you can see, we spent a 3 considerable amount of money and we were only able to 4 replace 20 percent of the hull plating. It certainly 5 was not without excitement. It took six hours to get 6 the ship out of the slip, and then the transit was nine 7 hours. Those who participated talk about how water was 8 coming in faster than it could be pumped out, and the 9 ship made it into the dry dock with inches to spare. 10 Again, we spent a lot of money and it 11 certainly had an impact on people, that this is 12 something that we were going to have to do every 12 to 13 15 years to maintain the ship and as time went on, this 14 was only going to get more expensive and the risks were 15 going to only increase. So if we fast-forward a decade, 16 by 2000, there were significant leaks in the ship and 17 the ship was listing. Again, the pumps could not keep 18 up with the water that was coming in. 19 About this time -- and again, we're 20 getting ready for our second dry berthing period -- and 21 TPWD came up with the idea that a dry berth would be a 22 better solution than continuing to tow the ship to 23 Galveston. At the same time, Todd's Shipyard had closed 24 down and there wasn't a dry dock available in the ship 25 channel anymore. In 2005, TPWD hired Orion Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 119 1 Construction, who prepared the grading dock preliminary 2 feasibility study. It was the first time that the idea 3 of a permanent dry berth was looked at. 4 They gave an estimate of $34.5 million 5 for a dry berth in 2005 dollars, plus or minus 6 30 percent. So we're talking about between 24 and 7 $45 million is what they estimated back in 2005. And 8 based upon that, in 2007 TPWD's Legislative 9 appropriation request requested money for the repairs to 10 the TEXAS. 11 So moving on to Slide 10. The 12 80th Legislature did appropriate $25 million in general 13 obligation bonds for repairs to Battleship TEXAS. The 14 appropriation stipulated that we could not touch that 15 money until we had done a naval engineering assessment 16 and provided them a project plan for the project. Since 17 we did not have the money, the Battleship TEXAS 18 Foundation contracted with Proceanic Limited to do that 19 assessment. In two thousand -- I'm sorry. Before I say 20 that, the -- when we met -- first met with Proceanic, we 21 provided them these three -- on Slide 11 -- these three 22 requirements for the dry berth. 23 The first two speak to the fact that the 24 ship is a historic artifact that is at an historic site, 25 as Scott mentioned, so that we could not alter the Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 120 1 nature or character of either of those. And then the 2 third requirement deals with our desire for a long-term 3 solution, so -- 4 COMMISSIONER FRIEDKIN: What's a -- the 5 reversible requirement, is that reversible as in... 6 MR. BORUFF: You've got to be able to 7 undo it. You can't do any permanent damage to the ship. 8 So whatever you do, you can't poke big holes in it and 9 put new struts across it; so any projects under the 10 National Historic Landmark Act have to be reversible. 11 So, therefore, you have to be -- whatever you do with 12 it, you have to be able to undo it. Put the ship back 13 in the water again. That's -- 14 COMMISSIONER FRIEDKIN: So as an extreme, 15 potentially be able to -- 16 MR. BORUFF: I think in theory, the idea 17 would be at some point if you wanted to refloat the ship 18 and move it somewhere else or set it up somewhere else, 19 you would have to be able to do that. 20 COMMISSIONER FRIEDKIN: But to have that 21 ability. 22 MR. BORUFF: Although, I think you're 23 going to hear a different perspective once you hear the 24 rest of the report; but in theory, that's what 25 reversibility means under the National Historic Landmark Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 121 1 Act. 2 MR. MCMONAGLE: Exactly. And we did 3 discuss it, and I'll talk about it later. We did put 4 additional requirements on that reversibility that we 5 may want to readdress. In 2008, Proceanic published the 6 concept development report. They said that the ship was 7 in a suitable condition to support itself out of the 8 water in a permanent dry berth. They did, however, 9 recommend against towing the ship any considerable 10 distance and, in fact, were not able to give us an 11 actual cost for what it would take to be able to tow it 12 extended distance because it was beyond the scope of 13 their work. 14 They did say that the ship could be 15 safely towed a limited distance in order to pull it out 16 of its berth or put it back in the berth; but they 17 defined a limited distance as 1 to 2 miles. As well, 18 Proceanic developed four dry berthing options and along 19 with those options, they provided cost estimates that in 20 2008 were 23 million to 36 -- a little over 36 and a 21 half million dollars is what they estimated it at that 22 time. 23 Based upon that Proceanic report, we then 24 prepared our project plan for the dry berthing of the 25 Battleship TEXAS, which was submitted to the Legislative Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 122 1 Budget Board as required. In March of 2009, the 2 Legislative Budget Board approved the plan, approved the 3 bond financing contingent that the ship be dry berthed 4 at its current location. And in that letter of 5 approval, they also went on to express the intent of the 6 LBB that the ship would be both safe and presentable to 7 the public. With receiving the funding, we went out 8 looking, soliciting for a designer and in 2010, at the 9 end of 2010, we selected and hired AECOM, which is a 10 large and renowned engineering firm to be the designer 11 for the dry berth. 12 Slide 14 is a list of the scope of 13 services that we requested of AECOM. And what these 14 tasks really do are build upon the things that were done 15 Proceanic. So for example in Bullet 2, those studies 16 and surveys are things that had not yet been done; but 17 we needed that next level of detail to begin to uncover 18 all of the challenges that would be part of this 19 project. 20 In September of this year, AECOM 21 submitted their report, the conceptional design report, 22 to us; and really two highlights or two important areas 23 within that report. The first is about the ship's 24 condition, and the second is their recommended dry 25 berthing options and the associated estimated costs of Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 123 1 those options. So first, we'll talk about the ship's 2 condition. 3 The upper spaces are in good condition, 4 and it's really remarkable work that State Parks has 5 done both in the restorative work and in their 6 interpretive work in the ship's spaces. Earlier this 7 year, we had the Navy captain who leads the inactive 8 ship program for the Navy tour the ship and he was most 9 complimentary of the work that they have done on this 10 ship, recreating the 1945 environment on the ship. I'm 11 sorry to say the lower compartments and the deeper you 12 go in the ship, the condition deteriorates quite rapidly 13 as you can see from the photos in Slide 17. A lot of 14 rust and a lot of wasting. 15 And the ship is in worst condition than 16 it was in 2008, and I want to talk about two areas and 17 what the impact is for us. The first area on Slide 18 18 is the blister tanks. In the late 20s, the Navy added 19 blister tanks to the sides of the hull of -- on each 20 side of the ship. The purpose was for protection 21 against torpedoes. They were attached right to the 22 regular hull of the ship. What has happened over time 23 is that now holes have developed, there's water inside 24 some of the areas of the tanks so it's holding water, 25 and the structure that you can see in the drawing there Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 124 1 has, in many places, deteriorated. And the impact of 2 this is that a tug will not be able to push up against 3 the hull of the ship, so the ship can't be pushed by a 4 tug. 5 Moving on to the next slide, as well 6 there are problems with the ship's original structure. 7 We've always been concerned about the structure of the 8 ship in a way of maintaining the watertight integrity of 9 the ship; but what AECOM has found is that the internal 10 structure that supports the weight inside the ship, much 11 like a building is supported by its structure, has 12 deteriorated considerably, too. Those places outlined 13 in red are the places of greatest concern. Especially 14 in the middle of the ship, kind of down below -- you 15 know, following down below the word "frame," are the 16 large spaces that have the heavy equipment, the engines 17 and the boiler rooms, and so there's great concerns 18 about the ship's structure in holding all of the ship 19 together. 20 Additionally, part of that structure 21 creates the structure that goes up to the decks that has 22 the bollards in which you attach lines to the ship and 23 if that structure is not there, which it isn't in a lot 24 of places, those bollards will just break right off. So 25 before I said we can't put tugs up against the ship to Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 125 1 push it, we also can't attach lines to pull the ship; so 2 there's a bit of a dilemma there. So as last spring and 3 winter as we began to find these discoveries, we began 4 to have serious concerns about pulling the ship into the 5 ship channel. 6 Our discussions with operators along the 7 channel, they're greatly concerned about the ship 8 grounding in the channel and obstructing the channel. A 9 billion dollars a day of economic activity goes through 10 the Port of Houston operations; so needless to say, 11 there's some concerns there and certainly some risks. 12 MR. BORUFF: We ought to highlight the 13 fact that we are not considering towing the ship. I 14 want to make that perfectly clear. And, in fact, this 15 engineering study has, you know, convinced us that 16 that's the right thing to do. So even though we use the 17 word "tow" here a couple times, I think we're absolutely 18 100 percent convinced now that towing the ship anywhere 19 is out of the question. 20 MR. MCMONAGLE: And that's exactly right. 21 So we went back to AECOM and we asked them to discount 22 any of their options that would cause us putting the 23 ship into the ship channel. So in their report, they 24 proposed four options; and I'll go through those rather 25 quickly if you want. We can discuss them, but it's Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 126 1 probably not necessary. Each of these options will 2 have -- I'm on Slide 20, for example, in Option 1 3 there's a bulkhead that holds back the waters of the 4 Houston ship channel. It's in its current slip. The 5 bottom rendering shows the way that the berth will be 6 constructed in that the ship will be moved forward to a 7 temporary berth while the slip now is prepared. In this 8 option, water will be pumped in to raise the water level 9 above the Houston ship channel, which will result in 10 raising the ship about 5 feet higher than it is 11 presently when it's in its final configuration. 12 Option No. 2 on Slide 21 is identical, 13 except with the lack of pumping in the water to super 14 flood. The ship will end up 7 feet below where it is 15 currently. And Options 3 and 4 have that same 16 elevation. In Option 3, the berth will be excavated to 17 the left of the ship and the problem with this option is 18 that the most economical way to do it is to go through 19 the ship channel rather than pushing it to the side; and 20 so, therefore, we will not consider this option. 21 COMMISSIONER FRIEDKIN: Which one is 22 that? I'm sorry. 23 MR. MCMONAGLE: Option No. 3. 24 COMMISSIONER FRIEDKIN: Three. 25 MR. MCMONAGLE: Yes, sir. Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 127 1 COMMISSIONER FRIEDKIN: Commissioner 2 Jones. 3 COMMISSIONER JONES: What's the 4 difference in Option 3 and Option 2 as to what you have 5 to do? 6 MR. MCMONAGLE: In Option 3 -- in Option 7 3, we're going to excavate to the side of the ship into 8 land that's currently -- well, what's currently land. 9 And then we would hope to be able to just slide the ship 10 over; but because of the way the retaining wall and the 11 bulkhead is going to be built, we have to actually pull 12 it out into the ship channel and then push it back in 13 and we thought that that was too great of risk. Did 14 that answer your question, Commissioner? 15 COMMISSIONER JONES: I think so. 16 COMMISSIONER HIXON: If you can't tow it 17 or push it or pull it, how are you going to move it? 18 MR. MCMONAGLE: Well -- 19 COMMISSIONER SCOTT: You're probably not. 20 MR. BORUFF: We'll get to the punch line 21 here in a minute. 22 COMMISSIONER HIXON: Okay. 23 MR. SMITH: Patience. 24 COMMISSIONER HIXON: I wanted to make 25 sure I wasn't missing anything. Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 128 1 MR. MCMONAGLE: Option 4 is really just 2 the opposite of Option 1, which is we would excavate the 3 berth forward of the ship and then move the ship into 4 it. So as a summary, as I said, there were four 5 options. Really only three of them are suitable since 6 those three do not require the ship to go into the 7 channel. The estimates from AECOM for these are between 8 38.2 million and 49.3 million, and these estimates do 9 not include repairs to the ship. And at this point, 10 we're not sure exactly what those costs to the -- of 11 repairs are going to be. We're going to have to match 12 the repairs to what it is we're doing. Meaning that 13 we're not necessarily going to want to do all the 14 repairs, only those that are necessary based on which 15 dry berth is chosen. 16 At this point, we have been unable to 17 determine even what the cost of determining those costs 18 are. The contractors have been hesitant to get involved 19 up until this point. So that kind of answers the 20 question of Commissioner Hixon, which is there will be 21 repairs. If we decide we need to push the ship, there 22 will be certain repairs that make it able to be pushed. 23 If we need to pull it, we'll make those repairs; but 24 only those repairs that are necessary. 25 So where do we go from here? We have Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 129 1 already informally asked AECOM to look at modifying some 2 of the constraints we've put on them. So, for example, 3 in reversibility, yes, we'll -- we have to maintain the 4 historic nature of the ship and not reverse that; but 5 maybe the fact that we'll ask to be able to float the 6 ship in the future, that the ship would somehow ever be 7 moved in the future, maybe by easing some of those 8 constraints we might be able to find some cost savings. 9 So with those modified berthing solutions, they'll look 10 at what repairs are necessary and what that berthing 11 solution will cost and we need to find a combination of 12 those two that will meet within our budget. 13 If there's no solution, no berthing 14 solution, then we'll look at taking the -- right now, 15 $28 million that we have to find those repairs that 16 maximize the extension of the life of the ship. As you 17 can see at the bottom of the slide, we are scheduled to 18 complete the project in spring of 2017. Right now, this 19 hold we're in making this decision, isn't going to 20 significantly affect that. There is though, as Scott 21 mentioned, the federal clearances. We've scheduled 24 22 months. Many have told us that that is very optimistic. 23 It may sound long to you, but many have told us that's 24 optimistic. If we have -- if we run into problems 25 during those clearances, for example, we're required to Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 130 1 do an Environmental Impact Statement, we could add 2 years. An Environmental Impact Statement could add five 3 years and a million dollars to the project. So with 4 that, I'll turn it back over to Scott. 5 MR. BORUFF: Just to synopsize folks, I 6 mean the bottom line is in all honesty, you know, the 7 Legislature gave us $25 million in bonds, which were 8 approved by the public. The Battleship TEXAS Foundation 9 committed to $4 million in funding. So in total, we had 10 $29 million that was dedicated for this particular 11 project, but it was predicated on us doing an 12 engineering study that told us what it was going to 13 take. We thought it would be a wise idea to come up 14 with a permanent grading solution that took this thing 15 out of the water so that we weren't having to go back 16 every decade or so and spend 15 or $50 million or 17 whatever it was and so that was our idea. 18 I think this latest study has dissuaded 19 us from that belief that we're going to be able to do 20 that. We certainly are not going to be able do it for 21 $29 million. So we're going to have to go back to the 22 drawing board now and see what we can do for the 28 or 23 so million dollars that remains of the $29 million to 24 extend the life of this ship. There may be some other 25 berthing options. Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 131 1 I mean one of the things we're actually 2 talking with AECOM now is filling that berth with sand 3 and having some kind of French drain system. There 4 again, this is totally unvetted with the engineering 5 group yet; but those are the kind of ideas that we're 6 looking at. Whether we could do that for $28 million, 7 we don't know. And so in the worst case scenario, we 8 believe that what we would do is go back and, on site, 9 do as many repairs to that ship as we can with the 10 existing funding that we have to extend its life out 11 into the future. We have briefed the Legislative 12 leadership on this report and the comments that we were 13 just making to you, they have heard; and we are moving 14 forward and unless the Commission wants to direct us to 15 do something different with asking AECOM to put their 16 thinking caps on and come back with some ideas that are 17 in budget. 18 COMMISSIONER FRIEDKIN: Scott, if the 19 constraint of reversibility, you know, is lifted -- and 20 I know that's a big if -- how do we -- how do we think 21 that may impact the costs? 22 MR. BORUFF: Well, we think it could, 23 Mr. Chairman. How much? We don't know. I mean this 24 idea of putting the ship in sand, which at first sounded 25 a little unusual to us, actually the more you think Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 132 1 about it, it does allow the work to be reversible. I 2 mean the fact is you don't have to go in there and 3 damage the ship. I mean one of the ideas that was 4 floated at one time was filling it up with concrete and 5 that's not very reversible. And so there again, I don't 6 think we have a clean answer for you. 7 We also have some questions we're going 8 to be approaching the Navy with, I mean relative to the 9 whole federal permitting process. One of the reasons 10 these four options that you saw were so extraordinarily 11 expensive is they really require building two dry docks. 12 One dry dock to move the boat into, the ship into; and 13 then to build the permanent dry dock and move it back. 14 So you're essentially building a $10 million temporary 15 dry berth for this ship and then moving it back. That's 16 one of the reasons the cost is up near $50 million. 17 Well, when you do that you have impact on 18 a culturally sensitive site, which requires all kinds of 19 federal exercises to make sure that you're not 20 negatively impacting cultural artifacts out there. It's 21 our belief that if we're just going to go back -- it may 22 be our belief that if we're just going to go back and do 23 repairs on site in the existing berth that has been 24 disturbed since 1948, that we might not have to go 25 through all those permitting requirements because we're Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 133 1 not going to disturb any new land base. Now, there 2 again, there's folks that would argue both sides of that 3 argument and we're not sure where the feds would fall 4 out on that argument; but that may be a tactic we use to 5 try to somehow limit the time frame because time is 6 money. 7 And as Rich said, in the best case 8 scenario it's about a two-year federal cycle. In the 9 worst case, it can be seven years. So -- 10 COMMISSIONER FRIEDKIN: And these cost 11 estimates are how old now? 12 MR. MCMONAGLE: The last one, sir? 13 MR. BORUFF: The last ones are -- 14 MR. MCMONAGLE: Just this month, last 15 month. 16 COMMISSIONER FRIEDKIN: Okay. 17 MR. BORUFF: The reports were out last 18 month, September. 19 COMMISSIONER FRIEDKIN: So they've been 20 adjusted. 21 MR. BORUFF: And ironically, we did go in 22 2007 to the Legislature, our first LAR request was for 23 $51 million to just do the dry berthing and ship repair. 24 So the number has hovered higher than $25 million for 25 several years. So I don't think it's realistic now Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 134 1 given what we know to think that we're going to be able 2 to permanently dry dock the Battleship TEXAS with 3 $28 million. 4 COMMISSIONER JONES: And you -- oh, I'm 5 sorry. 6 COMMISSIONER FRIEDKIN: No, go ahead. 7 COMMISSIONER JONES: Just by virtue of 8 comment, you know, you look at something like this 9 particularly during the economic times we're living in 10 right now, I wonder if that's the best use of our State 11 funds given that unless what you do is more permanent, 12 you're going to be right back here at some point in -- 13 count the years, I'm sure they can -- 10 years, 15 14 years, doing the same exact thing. 15 MR. BORUFF: Yes, sir. And that's what 16 prompted us to come up with this idea back in 2005 and 17 2006, because we were looking at that. We had the same 18 discussion in front of the Commission then. 19 COMMISSIONER DUGGINS: Well, I'll sort of 20 follow up to Bill's comment. What is the Legislative 21 leadership? What, if anything, do they offer on how 22 we're going to cover the shortfall? Because we clearly 23 don't have enough money to get it done. 24 MR. BORUFF: Well, we have briefed the 25 Legislative leadership. We did not ask for any more Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 135 1 money. We didn't think that was a prudent thing to do. 2 We -- actually, there was language in a letter that was 3 sent to us that said the intent of the Legislature was 4 for us to use the $29 million and be done with it. I'm 5 paraphrasing, but their intent was clearly for us not to 6 come back and ask for additional funds for the 7 Battleship TEXAS. So in trying to honor that intent, 8 what we are doing is trying to figure out what we can do 9 with that money to extend the life and it certainly 10 won't be a permanent solution; but that is the direction 11 from the Legislature is to go out and, you know, figure 12 out what you can do with this $29 million and don't ask 13 for more. 14 COMMISSIONER MORIAN: May I ask a 15 question? 16 MR. BORUFF: Yes, sir. 17 COMMISSIONER MORIAN: It's a little 18 different angle. Have you looked at what could happen 19 to this ship? While we're looking at 27 things about 20 deadlines because I'm told that the repair people don't 21 even like to go down below deck because you can stick 22 your finger through the hull, a hull. What would happen 23 if we had a hurricane or another hurricane? Have you 24 looked at what could -- 25 MR. BORUFF: Yes, sir. Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 136 1 COMMISSIONER MORIAN: What the impact to 2 us, the Department, would be if that thing rolls over or 3 sinks? I don't know if it can sink if it's in the mud. 4 MR. BORUFF: It's not going to sink much 5 further. Some people would argue it's already sunk and 6 some would argue that it's not. We've had that debate 7 internally. The point is it's sitting on the bottom of 8 the ship channel. It's in the mud. The bottom -- I 9 don't know -- 6 or 7 feet of the ship is buried in mud, 10 saltwater. 11 COMMISSIONER MORIAN: Did it float during 12 Ike? 13 MR. BORUFF: Oh, yes. 14 MR. SMITH: Oh, yeah. It sits on -- it 15 sits on monopoles. 16 COMMISSIONER MORIAN: Oh, it does? It 17 still is -- the hull is -- 18 MR. SMITH: Yeah. 19 COMMISSIONER MORIAN: There's enough 20 integrity for it to float? 21 MR. SMITH: We had about a foot of 22 clearance on the monopoles during Ike. 23 MR. BORUFF: We've had discussions with 24 the Navy about the most catastrophic outcome, which 25 would be -- and by the way, in the last 12 years, since Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 137 1 I've been here certainly, there have been several times 2 where the ship has taken on so much water that it's 3 started to list even though it's on the monopoles. And 4 so, you know, the staff and Parks and infrastructure 5 have done a great job of rushing out there and putting 6 more pumps to work and doing some temporary patches; but 7 it's getting worse and worse. And, you know, that was 8 one of the reasons we thought we ought to get it out of 9 the water and put it up on a permanent dry berth. But 10 having said that, I think the reality is we will 11 continue to struggle with trying to keep that ship where 12 it is and the longer we go without some permanent 13 solution, the more likely it is to ultimately be right 14 where it is until it has to be salvaged. 15 And that's what we're going back to the 16 Navy to talk to them about because under the rules that 17 the Navy imposes, it makes it very difficult for us to 18 come up with creative solutions. Particularly this 19 reversibility issue. I mean one of the things that 20 we've talked about is possibly going in there and 21 cutting some holes in the side of the ship and putting 22 big braces up against it to keep it from listing over, 23 but that's not reversible in the pure sense of the word. 24 COMMISSIONER MORIAN: Are there any 25 hazardous materials? Has everything been taken off of Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 138 1 it? 2 MR. MCMONAGLE: No, sir. In fact, we've 3 continued to find -- just during this last inspection, 4 found that there were charged canisters of, you know, 5 high pressure air on the ship. There continue to be 6 things that are found. When it went into dry dock, it 7 turned out that there was several thousand gallons of 8 jet fuel on board. So there continue to be discoveries 9 about what's on the ship. Yes, there are hazardous 10 materials on it. 11 MR. BORUFF: And there are certainly 12 areas -- 13 COMMISSIONER MORIAN: What exposure do we 14 have? 15 COMMISSIONER FRIEDKIN: Part of the -- 16 this reversibility constraint, coming back to that. Who 17 has -- who has imposed that on this? I mean which 18 agency or entity? 19 MR. BORUFF: It's a federal requirement 20 under the Navy and the -- whoever manages the National 21 Historic Landmark Act. 22 MR. MCMONAGLE: National Park Service. 23 MR. BORUFF: National Park Service. We 24 can get a better answer for you, Mr. Chairman. I don't 25 know exactly. Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 139 1 COMMISSIONER FRIEDKIN: I think that 2 would be helpful to know. And then I would just, at 3 this point, obviously there's a lot of -- we've got a 4 lot of variables floating around on this and I would 5 just suggest that you continue to do the good work 6 you're doing and work with AECOM and try to come up with 7 the most -- the best solution possible given the 8 constraints and the environment that we're in and 9 continue to communicate with the Commission on it and 10 see if we can drill down a little bit further on this. 11 MR. BORUFF: Absolutely, yes, sir. And 12 back to Mr. Morian's question. 13 COMMISSIONER FRIEDKIN: That's a good 14 question. What's the timeline on a decision process? 15 MR. MCMONAGLE: I would expect AECOM will 16 not come back to us until about April. Although, you 17 know, they've been floating -- no pun intended -- 18 different recommendations already. But it's probably 19 going to be about April before they can do their 20 thorough study about costs and what options truly are 21 viable. So we have several months still. 22 MR. BORUFF: There are -- I don't want to 23 get into the weeds too much. There are a lot of 24 permitting exercises. One of which we're engaged in 25 right now, Section 106 permitting exercise. We went -- Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 140 1 we started that exercise because we envisioned an option 2 which now is not going to happen, so now we have to 3 decide how and if we can get disengaged or whether it's 4 appropriate to get disengaged from that particular 5 permitting exercise. A lot of folks don't want to do it 6 anymore and some do. So we will continue to keep you 7 informed, and I'm sorry for the length of the briefing 8 here. It's just a very complex project that doesn't 9 have a really good solution looking us in the face yet. 10 COMMISSIONER FRIEDKIN: No, I think that 11 was very helpful for all of us. And I appreciate all 12 your efforts. You guys have put a lot of energy and 13 work into it. I just -- I'm having, frankly, a hard 14 time getting around the variables and trying to circle 15 back with something that gives you enough specificity to 16 drive toward a solution; so I think we just need to take 17 the next step and try to get a little further down on 18 the final. 19 COMMISSIONER HUGHES: I have one more 20 question. How many people visit the battleship 21 annually? Do we have any idea? 22 MR. BORUFF: Yes. 23 MR. MCMONAGLE: Somebody has visitation, 24 but I don't. 25 MR. BORUFF: We can get you that, Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 141 1 Commissioner. Sorry. I don't have it right on the tip 2 of my tongue here. But it's a pretty significant -- 3 there is good visitation out there. And really, it's 4 pretty important relative to the mission. We do bring a 5 lot of children out there and interpret the history on 6 that ship. So it's something that's been, from a 7 mission perspective, important to us. It's just an 8 unusual way for us to -- it's not like most of our state 9 parks. It's one of those -- 10 COMMISSIONER HIXON: How much of the ship 11 can they actually be on? 12 MR. BORUFF: Just the very upper 13 sections. Nobody, for the most part, goes down into the 14 sections you saw the pictures of. 15 COMMISSIONER FALCON: Has anybody thought 16 of just trying to salvage the upper sections, and 17 creating some kind of different option for the bottom 18 part? 19 MR. BORUFF: We've certainly discussed 20 that, Commissioner, yes. 21 MR. MCMONAGLE: And that, of course, 22 brings in the reversibility aspect. 23 MR. BORUFF: And that was not the 24 direction we got from the Legislature, to be quite 25 honest. I mean we did go back to the Legislature with Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 142 1 several of those kinds of options and this was back in 2 2005, 2007; but we also let them know if that was what 3 they wanted us to do, we were going to need some 4 assistance with the feds in order to try to get past 5 some of these other constraints that were applied to us. 6 And at that time, the Legislature did what it did and 7 gave us money and said let's move forward with hopefully 8 a dry berth, which may not work now. 9 COMMISSIONER DUGGINS: How engaged is 10 our -- are our Congressmen and Senators on this and have 11 we kept them posted and are they aware this thing could 12 fall apart? 13 MR. BORUFF: They're very aware, 14 Commissioner. They're very aware, and they know the 15 tenuous nature of what's going on. They've all -- in 16 fact, at one point, we had one constituent group 17 advocating to move the ship up to Galveston and give it 18 to the Texas Navy. All the Legislative leadership and 19 the local legislators there signed on a letter saying we 20 don't want that to happen, we want it to say where it 21 is. 22 We've talked to them as recently as 23 yesterday about the battleship and this latest round of 24 information that we've gotten, so they're very engaged. 25 Both at the federal and the state level, they know. Kay Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 143 1 Bailey Hutchison at one point went up and advocated for 2 some additional funding at the federal level, but was 3 not successful at that time and that was roughly four 4 years ago. So we believe the Legislature, particularly 5 the Texas Legislature, but also the federal 6 representatives and senators from that neck of the woods 7 are totally in the loop. 8 COMMISSIONER DUGGINS: Do they appreciate 9 the seriousness of the situation? 10 MR. BORUFF: I believe they do. I think 11 they understand the realities. 12 COMMISSIONER FRIEDKIN: Any other 13 questions for Scott or Rich? Thank you both very much. 14 Appreciate it. 15 Committee Item 3, request for storage 16 lease, Anderson County, natural gas storage lease at Gus 17 Engeling Wildlife Management Area, request permission to 18 begin the public notice and input process, Ted 19 Hollingsworth. 20 MR. HOLLINGSWORTH: Chairman, 21 Commissioners, good morning -- good afternoon. My name 22 is Ted Hollingsworth. I'm with the Land Conservation 23 Program. This item pertains to a request for a lease 24 for the storage of natural gas in a depleted gas 25 formation under a portion of the Gus Engeling Wildlife Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 144 1 Management Area. Gus Engeling is in central East Texas. 2 The site is almost 11,000 acres. It's primarily 3 bottomland hardwood forest. 4 The formation or the portion of the 5 formation for which the lease requested is in the 6 extreme southern part of the wildlife management area. 7 Consists of basically two separate units that you can 8 see in this map totaling about 547 acres. 9 Gas storage lease request is something 10 new for us. We have not done one in the past. The 11 General Land Office has not done one either. Staff has 12 done a lot of homework into what is involved. There are 13 about 20 in Texas already, gas storage facilities in 14 depleted -- depleted gas formations. Essentially, the 15 purpose is these are coarse sand formations that have 16 been depleted of gas in the past. Right now, as you 17 know, there's a lot of gas being produced in Texas. 18 There's effectively a glut on the market. 19 These gas storage facilities allow gas to 20 be pumped back into the ground at times when the supply 21 exceeds the demand and then at times when the demand is 22 greater or the supply is down, the gas can easily be let 23 out of the formation and then placed on the market. In 24 the case of this particular request, none of those 25 facilities, none of those injection nor extraction Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 145 1 facilities would be on the wildlife management area. 2 This is simply a lease of a portion of 3 that formation. That particular formation is about 4 9,000 feet deep where it passes under the wildlife 5 management area, and the request is for a lease. It's 6 not a mineral lease, but it's basically a form of 7 surface use lease that would allow them to pump gas in 8 and take gas out of that depleted formation under the 9 wildlife management area. 10 We've been discussing this with the 11 applicant for about six months now. Some of the 12 conditions of that are that none of the facilities that 13 would be constructed would be within a thousand feet of 14 the wildlife management area. The only impact to the 15 wildlife management area would be that they need to come 16 on and replug three decade's old abandoned gas wells to 17 make sure that no gas can escape through those wells 18 when they start pumping it back into the formation. 19 They would improve the roads. There's 20 actually short roads leading to those three sites. The 21 staff does use those roads to access the wildlife 22 management area, and welcomes those roads being approved 23 for that purpose. There would be a small damage payment 24 in association with them coming on site to replug those 25 wells. There would be an annual lease fee for those 547 Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 146 1 acres that we would collect in the form of goods and 2 services. They would contribute significantly to the 3 operation of the Gus Engeling Wildlife Management Area. 4 And all the other strata above and below 5 that 9,000-foot seam in which the gas would be injected 6 and withdrawn, would still be available for lease should 7 gas or oil or some other mineral be discovered in the 8 future and should there be an interest in leasing those 9 other formations. This lease would only pertain to that 10 narrow band around 9,000 feet. 11 We would propose to go out for public 12 notice on this, solicit any comments, come back probably 13 in January with a request for an action if you authorize 14 us to proceed today. And with that, I'd be happy to 15 answer any questions you might have. 16 I would add that there are several 17 hundred of these in North America. Twenty in Texas. 18 There is another class of gas storage facilities, and 19 those are where gas is pumped into hollowed out salt 20 dome formations. It's a somewhat different process; but 21 in Texas, there are 20 that are in depleted gas 22 formations. There are several hundred in North America. 23 To date, there have not been any catastrophic incidents 24 at any of these depleted field formations in Texas. The 25 track record for safety is very excellent with these. Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 147 1 They are pumped up to a pressure which is 2 less than the pressure the native gas was in at the time 3 it was removed from the formation initially. So the 4 history of that formation containing the gas is 5 considered to be apparently, by the record, is a safety 6 check on how much gas can be placed back in that 7 formation at any given time. 8 COMMISSIONER DUGGINS: Are there any 9 questions or is there any discussion? I have one. What 10 would be the term, proposed term, of this lease? 11 MR. HOLLINGSWORTH: It would be a 12 ten-year term. It would be the same as any of our other 13 leases. And the company has proposed that in addition 14 to the initial fee assessment or easement assessment, 15 that that be increased annually based on the CPI. 16 COMMISSIONER DUGGINS: And is there any 17 early termination, proposed early termination? 18 MR. HOLLINGSWORTH: It would be standard 19 language, only in the event of a breach of the terms of 20 the easement. 21 COMMISSIONER DUGGINS: I guess my last 22 question is how close would the operations be to the 23 boundaries of the current WMA? 24 MR. HOLLINGSWORTH: We have a 25 representative from the applicant here today. I don't Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 148 1 know their latest engineering and placement plans, but 2 he is here if you would like to address that question 3 to -- the gentleman's name -- and he's with Sage Energy 4 Partners -- is Larry Noble. 5 COMMISSIONER DUGGINS: Mr. Noble, could 6 you come up, please? 7 MR. NOBLE: Yeah. 8 COMMISSIONER DUGGINS: I don't know 9 whether you heard my question, but how close to the 10 current boundaries of the WMA would your operations be 11 conducted and what types of operations would you be 12 conducting at whatever that site is? 13 MR. NOBLE: Okay. The -- I noticed in 14 your presentation, you had a thousand-foot minimum 15 standoff; is that correct? 16 MR. HOLLINGSWORTH: Yes, sir. 17 MR. NOBLE: Well, yeah, we would want to 18 be at -- in that thousand -- as close as we could. We 19 have to drill wells directionally and then we have a 20 facility planned, also. So it would probably be right 21 on the borderline of that thousand foot. 22 COMMISSIONER DUGGINS: And what kind of 23 operations would you conduct at that facility? Would it 24 be trucks? Would it be just pipelines and compressors? 25 MR. NOBLE: It's mainly pipelines and Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 149 1 compressors. There's a -- there's already two gas 2 storage facilities in the area, right there pretty much 3 adjacent to the wildlife management area already. This 4 is a vessel. It's called -- it's a salt dome is where 5 this is located at and there's already two facilities 6 already permitted and have been operating there for 7 quite some time and they are the -- they are in the salt 8 part of it. We're going into a depleted formation, 9 which is a little bit located to the sides of the salt. 10 The salt dome comes up, and that's where they've got 11 some storage right now. They've got two big facilities 12 there right now. 13 We're on the sides, on either side of 14 those facilities. And ours takes a little more acreage. 15 Those facilities only take -- I don't know -- 100 acres 16 or something like that, but -- and then there's also the 17 Pinnacle Gas Treating Plant, which is located very close 18 in there also to these operations. 19 COMMISSIONER DUGGINS: How big would your 20 proposed footprint be? 21 MR. NOBLE: The plan itself would 22 probably be around -- after all phases, probably 40 23 acres, 40 or 50 acres. Starting off it would be, you 24 know, 10 to 15 acres probably. 25 COMMISSIONER DUGGINS: And do your plans Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 150 1 include soundproofing or some sort of sound buffer for 2 the -- 3 MR. NOBLE: Well, yeah. Your compressors 4 will be -- 5 COMMISSIONER DUGGINS: Aren't they 6 massive? 7 MR. NOBLE: -- as quiet as we can make 8 them. Right. They would be housed, and probably 9 quieter than the current ones that are out there. 10 COMMISSIONER DUGGINS: Anybody else have 11 any comments? Yes. 12 COMMISSIONER SCOTT: Correct me if I'm 13 wrong, I think you answered it; but just so that 14 everybody is thinking along the line I am. The two that 15 are existing that are in the salt dome, those are a lot 16 higher pressure than the ones you're talking about, 17 right? 18 MR. NOBLE: No, they're shallower. I 19 wouldn't think they would be any higher pressure at all. 20 COMMISSIONER SCOTT: About the same 21 pressure? 22 MR. NOBLE: They would probably be 23 actually may be in the lesser pressure because they're 24 much shallower. They're in the salt. They've been 25 hollowed out of the salt itself. Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 151 1 COMMISSIONER SCOTT: Okay. 2 MR. NOBLE: Where ours -- whereas ours is 3 down below in the reservoir rock where the gas -- gas 4 was discovered there in 1956, and these wells have 5 produced up until -- I mean most of their gas was 6 produced by the 80s or 90s, and they're basically in a 7 depleted formation right now. Very few wells remaining, 8 if any, like the one producing all that. 9 COMMISSIONER SCOTT: I'm fairly familiar 10 with the facility down at (inaudible). You know, those 11 are pretty gigantic salt dome storages underground and I 12 thought their pressure would have been -- but you're 13 right. You're down at 9,000 feet. 14 MR. NOBLE: We're down at 9,000. I think 15 (inaudible) they go to around maybe 4,500 feet, so. 16 COMMISSIONER SCOTT: Makes a difference, 17 okay. 18 COMMISSIONER HUGHES: Just out of 19 curiosity, how many BCF do you plan on injecting and 20 then withdrawing? Do you know how many BCF? A model? 21 MR. NOBLE: Right, right. Initially, 22 it's about 20 BCF. Now, we would have some expansions 23 from there. The reservoirs initially contained ran 100 24 BCF. 25 COMMISSIONER HUGHES: Okay. Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 152 1 COMMISSIONER DUGGINS: If there's no 2 further discussion, I'll authorize staff to begin public 3 notice and input process. Thank you very much. 4 Okay, Ted, acceptance of land donation 5 for Orange County, 111 acres at the Tony Houseman 6 Wildlife Management Area. 7 MR. HOLLINGSWORTH: Chairman, 8 Commissioners, my name is Ted Hollingsworth. I'm with 9 the Land Conservation Program. This item and the next 10 item are both closely related. Back in May, the 11 Commission authorized a 20-inch hydrogen pipeline to 12 cross the Tony Houseman Wildlife Management Area and as 13 compensation for both federal and state impacts and 14 impacts to the wildlife management area, we've been 15 working closely with The Nature Conservancy -- I'm 16 sorry, with the Conservation Fund to identify tracts of 17 land adjacent to the wildlife management area that could 18 be added to the wildlife management area to, again, 19 offset those long-term impacts to fish and wildlife 20 resources. 21 The wildlife management area is right on 22 the Texas/Louisiana border inside the city limits of 23 Orange on the Sabine River. And these lands come to us 24 for two different reasons. This 111-acre tract is 25 partial compensation to Texas Parks and Wildlife for the Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 153 1 easement itself. The other acreage you will see is 2 actually to comply with Federal Section 404 Wetland 3 Regulations. 4 This will leave a balance with Parks and 5 Wildlife of approximately $100,000 that's due and 6 payable in goods and services for which will be used for 7 restoration and for operations at the wildlife 8 management area. The subject tract, of course, is 9 contiguous with the wildlife management area. It's a 10 good buffer. It's the last remaining tract between a 11 neighborhood and one of our boundaries. Healthy 12 habitat, suitable for hunting and fishing. You can see 13 the tract is bisected by I-10, but you can see both of 14 those tracts are healthy habitat and do protect and add 15 to the wildlife management area. 16 And staff does recommend that the 17 Commission consider this motion tomorrow that the 18 Executive Director should be authorized to accept the 19 donation of approximately 111 acres of land adjacent to 20 the Tony Houseman Wildlife Management Area for addition 21 to the wildlife management area. 22 I'll be happy to answer any questions. 23 COMMISSIONER FRIEDKIN: Discussion by the 24 Commission? Good. Okay, no further discussion. I'll 25 place this item on the Thursday Commission meeting Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 154 1 agenda for public comment and action. 2 Item 6, acceptance of land donation, 3 Orange County, 218 acres at the Tony Houseman WMA. 4 MR. HOLLINGSWORTH: Chairman, 5 Commissioners, good afternoon. I'm Ted Hollingsworth. 6 This item is closely related to the previous item. 7 Again, because of the nature of the pipeline, there were 8 requirements to not only offset impacts to the wildlife 9 management area and related fish and wildlife services 10 of the wildlife management area, but also to satisfy the 11 Clean Water Act in Section 404, thereof pertaining to 12 impacts to jurisdictional water to the U.S., what we 13 commonly call wetlands. 14 The 218 acres being added to the wildlife 15 management area actually compensates or offsets impacts 16 to approximately a 25-mile stretch of the pipeline. We 17 advised the applicant early on to work with the 18 Conversation Fund because of the track record they have 19 in locating conservation lands in Southeast Texas and 20 the Conservation Fund was able to identify and work with 21 adjacent landowners to acquire tracts that would 22 satisfy, again, all of the wetland impacts in the 23 Texas -- the Texas region of that line. 24 Like the previous tracts, these are 25 contiguous with the wildlife management area. One of Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 155 1 them is almost an inholding. This cleans up our 2 boundaries significantly, adds some extremely healthy 3 bottomland forest to the wildlife management area. The 4 land is suitable for hunting. You can see the 5 configuration in this map. And as with the previous 6 donation, you'll see a motion tomorrow to authorize the 7 Executive Director to accept that donation. 8 And I'd be happy to answer any questions 9 you might have. 10 COMMISSIONER FRIEDKIN: Questions? 11 COMMISSIONER DUGGINS: A quick one. Who 12 owns that finger that goes in above where you have 13 subject 186 acres? Who owns that? 14 MR. HOLLINGSWORTH: Well, it's quite a 15 few small privately owned tracts and you can't really 16 tell from this picture; but there are already -- there 17 are already some little homesteads. There are homes on 18 that property. It's high ground. It's the reason it's 19 a different color. Its uplands, and there's a 20 residential area in there that's been there for decades. 21 COMMISSIONER DUGGINS: And who owns the 22 water that's just to the south of the proposed -- 23 MR. HOLLINGSWORTH: I think all of those 24 water areas are actually old borrow pits for the 25 construction of I-10. That and the adjacent bottomland Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 156 1 forest probably would be available and with all the 2 pipeline activity going on down there and with our 3 working relationship with those landowners and the 4 Conservation Fund, you may see that one come -- you may 5 see that one come in a future recommendation. 6 COMMISSIONER DUGGINS: Thank you. 7 COMMISSIONER FRIEDKIN: Help us through 8 the subject tract on -- let me make sure that I get to 9 the -- the one shows with the yellow border suggests 10 that we already own that; is that... 11 MR. HOLLINGSWORTH: We... 12 COMMISSIONER FRIEDKIN: Is that a fairly 13 accurate -- 14 MR. HOLLINGSWORTH: Yeah, we actually 15 thought we did own it and when this wildlife management 16 area was acquired, it was surveyed by TxDOT because 17 TxDOT has been extracting wildlife credits to offset 18 impacts from highway projects; but it was erroneously 19 platted. And so until the Conservation Fund actually 20 hired a surveyor to carve out the tract for acquisition, 21 that surveyor discovered then that there was this 22 subject 30-acre tract that we thought we owned and did 23 not. And the owner -- the owner was not only a willing 24 seller, the owner donated the tract to the Conservation 25 Fund and it's now being donated to us. Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 157 1 COMMISSIONER FRIEDKIN: Okay, thank you. 2 Any other questions for Ted on this? 3 MR. HOLLINGSWORTH: That was -- that was 4 one of those that the -- all the descriptions until the 5 most current round of surveys said, you know, go to the 6 30-inch diameter gum tree with an X hacked into the 7 bark -- no, literally, literally. 8 COMMISSIONER FRIEDKIN: Yeah. 9 MR. HOLLINGSWORTH: And then proceed from 10 there to the, you know, 15-inch cypress tree with an X 11 hacked into the bark. And so we had actually, had two 12 conflicting surveys is what it amounted to. 13 COMMISSIONER FRIEDKIN: Understood, okay. 14 So I'll place this item on the Thursday Commission 15 meeting agenda for public comment and action. 16 Item 7, request for easement, Ward and 17 Winkler Counties, water distribution pipeline easement 18 at Monahans Sandhills State Park, Ted Hollingsworth. 19 MR. HOLLINGSWORTH: Chairman, 20 Commissioners, I'm Ted Hollingsworth. I'm with the Land 21 Conservation Program. This is the second reading of 22 this item. You saw this item in August. It is a 23 request from the Colorado Municipal Water District to 24 add a pipeline to an existing pipeline corridor that 25 crosses the Monahans Sandhills State Park. Sort of Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 158 1 central West Texas. 2 A very unusual park. These are inland 3 sand dunes. The park is located between Monahans and 4 Odessa, basically. One of our popular parks. It's very 5 interesting. You can see the sand dune fields in this 6 ariel photograph and the location of the water line 7 corridor. I call it a corridor because a 33-inch water 8 line was placed in that location in 1971. 9 Big Spring, Odessa, which were the 10 primary recipients of water, have grown in the meantime. 11 The drought as exacerbated the complications of moving 12 water to those urban areas and we have a request to add 13 a 48-inch pipeline basically alongside the existing 14 33-inch pipeline. Staff is convinced there really is no 15 reasonable alternative route for that pipeline except to 16 use the existing corridor. 17 This one is a little bit unusual in that 18 the park is operated under a 99-year lease from the 19 Sealy & Smith Foundation of Galveston. They feel very 20 strongly about the park and have asked the staff of this 21 agency to work with the staff of the water district on 22 terms and conditions and a lease and compensation for 23 the lease that best protects the State Park, the natural 24 and cultural resources of the State Park and, of course, 25 the operations and the public recreation of the State Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 159 1 Park. 2 A 48-inch line across sand dunes is a 3 very significant impact and so we've been working with 4 the applicant for several months now on ways to minimize 5 not just the structural impact, the impact of the 6 geology and the sand dune fields, but also the impacts 7 to wildlife and park operations and we feel like the 8 applicant is working with us in good faith to do that. 9 There are some constraints, obviously, on the number of 10 methods that are available for putting a 48-inch water 11 line into a sand dune field. 12 The Sealy & Smith Foundation is looking 13 for us to draft that easement upon your authorization 14 and I anticipate that they will then expect the water 15 district to honor that easement and the surface use 16 agreement and the surface use restrictions prepared by 17 staff, again, upon your authorization for us to proceed. 18 Tomorrow, you'll see an action item in 19 the form of a resolution. I'd be happy to answer any 20 questions you might have. 21 COMMISSIONER FRIEDKIN: Ted, at the last 22 meeting, if my memory serves me correctly, I think 23 Commissioner Duggins and perhaps a few others had some 24 questions that we kind of wanted to get our arms around, 25 the potential impact and I think also possibility of Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 160 1 water usage. Did we -- am I confusing items? 2 COMMISSIONER DUGGINS: No, I was just 3 looking at the minutes. That's exactly right. 4 COMMISSIONER FRIEDKIN: Did we get some 5 clarity on that? 6 MR. HOLLINGSWORTH: Yes and no. There's 7 been a -- there's been -- just from my perspective, 8 there's been a big disconnect between the water district 9 and their consultants. And last week we finally had the 10 general manager for the water district and their 11 consultants, their biological consultants, their 12 cultural research consultants, and their engineers all 13 came here last week and we sat down at the table and we 14 walked them through the information we would have to 15 have before we could even draft an easement. We didn't 16 have survey documentation. The threatened and protected 17 species information that they had provided was 18 inadequate. We did not have any engineering 19 recommendations. We just really had nothing to go on. 20 So we finally sat down with them last 21 week and walked through the information we were going to 22 have to have to proceed with drafting the easement. We 23 did not discuss the water issue. I'm now on a good 24 working relationship with the general manager for the 25 water district and I will -- I will take that up with Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 161 1 him this week and see if there's any possibility of that 2 line providing the water needs of the park. 3 COMMISSIONER FRIEDKIN: So timing on this 4 though is -- it's an action item. 5 MR. HOLLINGSWORTH: Well, but the action 6 item authorizes the Executive Director to allow us to -- 7 COMMISSIONER FRIEDKIN: Right. 8 MR. HOLLINGSWORTH: Right. To forward a 9 draft easement to the Foundation upon whatever point the 10 Executive Director and staff are convinced that that's 11 been negotiated in the best interest of the park. 12 COMMISSIONER FRIEDKIN: Okay. So I think 13 given that schedule and the process, I think that's 14 fine. And, Ralph, maybe you can get involved in that 15 just a little bit. 16 COMMISSIONER DUGGINS: I was just saying 17 to Karen what I would suggest is we -- tomorrow if the 18 decision of the group is to approve or to go forward, 19 that we include as a condition of the easement that we 20 have the right to access the water. 21 MR. HOLLINGSWORTH: I will try and make 22 that call this afternoon. I just honestly don't know 23 with an engineering standpoint the feasibility of 24 tapping into a 48-inch diameter line. 25 COMMISSIONER SCOTT: That's pretty high Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 162 1 pressure. 2 COMMISSIONER HIXON: Is the Sealy & Smith 3 Foundation a private foundation or a public foundation? 4 MR. HOLLINGSWORTH: It's a private 5 foundation. 6 COMMISSIONER HIXON: Are they 501(c)(3)? 7 MR. HOLLINGSWORTH: Yes, ma'am. And they 8 actually own -- they actually own about 10 miles of the 9 pipeline route. They own quite a bit of land contiguous 10 with the State Park. It's just that the State Park 11 encompasses the best of the sand dunes. 12 COMMISSIONER JONES: Do we have a current 13 need for water at the park? 14 MR. HOLLINGSWORTH: Well, we have an -- 15 excuse me. 16 COMMISSIONER JONES: That's not being 17 met? 18 MR. HOLLINGSWORTH: No, we do not have a 19 need that's not being met. And what I do not know at 20 this point is if that water that we use in the park 21 comes from an on-site well or if it's supplied by a 22 water provider. I can find out this afternoon. 23 COMMISSIONER JONES: That would be good 24 information to know before we put conditions on it. 25 COMMISSIONER FRIEDKIN: Yes, absolutely. Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN 163 1 MR. HOLLINGSWORTH: I will find that out 2 today. 3 COMMISSIONER FRIEDKIN: Okay. Thanks, 4 Ted. Any other questions on this? Okay. I'll place 5 this item on the Thursday Commission meeting agenda for 6 public comment and action. 7 At this time, I would like to announce 8 that pursuant to the requirements of Chapter 551 9 Government Code referred to as the Open Meetings Act, 10 Executive Session will be held at this time for the 11 purpose of deliberation of real estate matters under 12 Section 551.072, Texas Open Meetings Act, and seeking 13 legal advice from the general counsel under Section 14 551.071 of the Open Meetings Act. We will now recess 15 for Executive Session. Thanks. 16 (Recess held for Executive Session) 17 COMMISSIONER FRIEDKIN: Okay, we'll now 18 reconvene the regular session of the Conservation 19 Committee at 3:08 p.m. Regarding Committee Item No. 8, 20 Chaparral Wildlife Management Area Mineral Operations in 21 La Salle and Dimmit Counties and Committee Item No. 9, 22 Cameron County Land Matter, no further action is 23 required. This committee has completed its business and 24 we will move on to the Finance Committee. 25 Commissioner Falcon, Chairman Falcon.
1 C E R T I F I C A T E 2 STATE OF TEXAS ) 3 COUNTY OF TRAVIS ) 4 I, Paige S. Watts, Certified Shorthand 5 Reporter in and for the State of Texas, do hereby 6 certify that the above-mentioned matter occurred as 7 hereinbefore set out. 8 I FURTHER CERTIFY THAT the proceedings of such 9 were reported by me or under my supervision, later 10 reduced to typewritten form under my supervision and 11 control and that the foregoing pages are a full, true, 12 and correct transcription of the original notes. 13 IN WITNESS WHEREOF, I have hereunto set my 14 hand and seal this Turn in date _____ day of 15 ________________, 2011. 16 17 18 19 __________________________ 20 Paige S. Watts, CSR, RPR CSR No.: 8311 21 Expiration: December 31, 2012 Firm Registration Number: 87 22 1016 La Posada Drive Suite 294 23 Austin, Texas 78752 Job No. 95402 24 25 Sunbelt Reporting & Litigation Services HOUSTON DALLAS/FT. WORTH CORPUS CHRISTI AUSTIN