June 20, 2017 Transcript

June 20, 2017

Texas Parks and Wildlife Department
Commission Hearing Room
4200 Smith School Road, Austin, TX 78744
Council Meeting

CHAIRMAN MORIAN:  Good morning, everybody.  Sorry for the slight delay here.  Good.  Let me welcome, and glad we're here.  We're going to do some important business; but first, I'd thought we'd go around the table and introduce ourselves.  I guess we'll start on the right side.


Claude Ross, NRCS, representing Salvador Salinas, our State Conservationist.

COUNCIL MEMBER LOPEZ:  Good morning. Texas A&M Natural Resources Institute, Roel Lopez.


I'm a board member.  I'm the County Attorney in Bosque County.

COUNCIL MEMBER BRUUN:  Bech Bruun, Chairman of the Texas Water Development Board.

MR. MELINCHUK:  Ross Melinchuk, Texas Parks and Wildlife.

CHAIRMAN MORIAN:  Reed Morian, Texas Parks and Wildlife.

COUNCIL MEMBER KELSEY:  Tom Kelsey, Berie Lamberth in Houston.

COUNCIL MEMBER KLEINSCHMIDT:  Tim Kleinschmidt with the Texas Department of Agriculture, sitting in for Sid Miller.

COUNCIL MEMBER RAY:  Rusty Ray, Soil and Water Conservation Board, sitting in for Rex Isom, our Executive Director.

COUNCIL MEMBER MCAFEE:  Pam McAfee, Council Member.

COUNCIL MEMBER SCOTT:  Dave Scott, Brazos River Authority.

CHAIRMAN MORIAN:  All right, thank you. With that, I'll move into the meeting. Public notice of this meeting containing all items on the proposed agenda has been filed in the office of the Secretary of State, as required by Chapter 551 Government Code referred to as the Open Meetings Act.  I would like for this fact to be noted in the official record of the meeting.

Do you have anything you want to say further?

MR. MELINCHUK:  That was it.

CHAIRMAN MORIAN:  That was it?


CHAIRMAN MORIAN:  Okay.  I spoke for you, didn't I?

MR. MELINCHUK:  You did a good job.

CHAIRMAN MORIAN:  Okay.  Action Item No. 1, Approval of the Minutes, there's a correction in that the meeting -- the minutes are from April 25th.

There is one correction, just for the record --

MR. MELINCHUK:  That was from the previous meeting.

CHAIRMAN MORIAN:  From the previous meeting.  Okay, you're going to handle that.  All right.

Is there a motion for approval?


CHAIRMAN MORIAN:  Is there a second?


CHAIRMAN MORIAN:  Seconded by Mr. Kelsey. Any opposed?  Hearing none, motion carries.

Briefing Item No. 2, Steps Involved in the Completion of Texas Farm and Ranch Land Conservation Program Project from the staff.  We'll hear from Mr. James Murphy.  Good morning.

MR. MURPHY:  Good morning, Chairman

Morian, Council Members.  I'm James Murphy, Staff Attorney for the Program; and I'm presenting today on the steps involved in the completion of the Farm and Ranch Lands Project in order to provide you some context
for the upcoming presentations, as well as tout some of the staff's efforts since we met last year and I'll try to make this quick so we can move to the best part of today's deliberation, which is the project applications.

The process begins here with the Council award, and there are 4 main documents that must be completed to close a project.  First, the Department and conservation easement holder enter a grant agreement setting out the terms for funding and a list of deliverables.  Second, staff reviews the conservation easement being negotiated between the landowner, the easement holder, and NRCS when federal funding is involved.  Third, staff assists the holder with preparation of a baseline report which describes the conservation and natural resource values of the property that the easement aims to protect.  Fourth, staff reviews the management plan for the property, which is an agreement between the landowner, holder, and NRCS when applicable on how agriculture activities will be conducted on the property.

After development of each of these documents, the conservation easement is ready for closing; and Farm and Ranch Lands funds are dispersed.

I'll briefly describe each of these steps in turn.

Staff has developed a template grant agreement which is the starting point for negotiations with the easement holder.  Often, the holder requests minor changes to this agreement; and staff considers and responds to those requests, while ensuring compliance with State laws on rules on grants and contracts.  Staff reviews a finalized budget for the project, as well as holder's financial management policies for the endowment for monitoring enforcement.

The conservation easement is the heart of this program.  It describes the protected conservation values of the property in detail, the rights and responsibilities of the landowner and easement holder, and it describes any building envelopes and any other landowner reservations of rights.  The easement establishes the Department's right to approve certain uses of the property that may adversely effect the conservation values and also establishes the Department's third-party right of enforcement to prevent adverse impacts to the conservation values of the property.

The baseline report describes what the conservation easement protects, including the property's conservation values, habitats and species present, water and other special features and existing development and uses.  Staff visits the site with the holder and assists with drafting the baseline report.  This report includes a map with photo points of the features of the property. The management plan compliments the conservation easement by providing a standalone agreement that can be adapted over time by agreement of the landowner, holder, Parks and Wildlife, and if applicable, NRCS.  It provides additional detail on how to manage agricultural uses of the property consistent with protection of the property's conservation values.

Let me move to closing.  At closing, the Department provides funds for the acquisition into an escrow account with a title company.  We will review the closing documents, including the property survey, the
appraisal, the deed, any title policy and encumbrances.

After closing, staff will maintain copies of the recorded easement and associated documentation and will notify TxDOT of the location of the conserved property.

The timeline varies somewhat; but the typical timeline so far as we've worked through the program through the first cycle, is that the grant usually takes about two to three months to complete.

The conservation easement is certainly the most time-consuming part of this process.  Negotiation and document preparation can take three to four months.  The baseline report takes about a month to prepare after completion of the staff site visit, and closing can take about two to three months.  These estimates certainly are dependent on a number of factors, one of which being the level of development that the landowner would like to reserve on the property.  In total, staff has spent over 3,000 hours since May of 2016 on this program; and there's staff in multiple divisions here at Parks and Wildlife involved in this program.

I just want to note that closing is not the end of staff involvement.  After closing, staff reviews the holder's financial reports to identify any risk of insolvency.  We also review the annual easement monitoring reports for any potential violation of the easement.  Staff also reviews, in consultation with the easement holder, requests from the landowner to exercise reserved rights on the property.  And in the unlikely event of a violation of the easement, staff consults with the easement holder to determine the appropriate corrective action and whether enforcement is warranted.

And because these easements are perpetual, it's important to note that staff remains involved in the program in an oversight role into perpetuity.

And I'm available for any questions.

Thank you.

CHAIRMAN MORIAN:  Are there any questions?

Thank you for your presentation.

MR. MURPHY:  Thank you.

CHAIRMAN MORIAN:  Everybody good?

Then we'll move on to Briefing Item

No. 3, Status of the Fiscal Year 16-17 Texas Farm and Ranch Lands Conservation Program Projects.  Mr. Justin Dreibelbis, please make your presentation.

MR. DREIBELBIS:  Good morning, Mr. Chairman, Council Members.  For the record, my name's Justin Dreibelbis.  I'm the Private Lands and Public Hunting Program Director here in the Wildlife Division at Parks and Wildlife.  This morning, I'm going to review the funded projects, the projects that have been funded over the last biennium; and then give you a status update for each one of them.

As a refresher, over the last biennium, the Council has funded seven projects, gone to five NGO awardees.  It's been over six counties with a total Farm and Ranch Land award budget of $1,837,129.  These dollars were leveraged seven to one and have helped protect 10,373 acres statewide.  This is how the properties are distributed across the state, and we'll go through each property and talk about the status.

First project is the Dreamcatcher Ranch right outside of San Marcos.  This is an easement with Guadalupe Blanco River Trust.  It's in Hays County, 211 acres.  It was a Farm and Ranch Land award of $378,089, with a $250,000 NRCS match.  I'm happy to say that this project is completed, with all final documents signed.

Next project is Lazy Bend Ranch, also in Hays County.  This is a project with the Hill Country Conservancy.  It's a 144-acre property, Farm and Ranch Land Program award of $75,925.  We have an executed contract.  The conservation easement is in final review, and the baseline is in final review.  So we're hopeful that this project will close here in the next few weeks.

The next project is the Puryear Ranch.

This is western Travis County, 425-acre easement with Hill Country Conservancy, Farm and Ranch Land award of $131,850.  Again, we have an executed contract on this project.  Conservation easement is in final review, and
the baseline is in final review.

Next project is the Albritton Ranch, western Bandera County.  This is a project with the Nature Conservancy, 760 -- 716-acre easement, Farm and Ranch Land award of $307,500, NRCS match of $650,000.

This project also has an executed contract.

Conservation easement in final review and baseline in final review and, again, hopeful that it closes here in the next few weeks.

The next project is the Pietila Ranch in Culberson County.  This is a project with the Nature Conservancy; 7,229-acre easement; $335,250 award from Farm and Ranch Land Program; $750,000 in NRCS match.  We have an executed contract. The conservation easement is in draft form and the baseline fieldwork has been completed and we're awaiting a draft of that document now.

Next project is the Santa Anna Ranch, Lower Unit.  It's in southern Coleman County.  It's a 1,368-acre easement with the Texas Agricultural Land Trust.  Farm and Ranch Land Program award of $208,515, with $835,380 of NRCS match.  There's an executed contract.  We're awaiting a draft conservation easement, and the baseline is also in draft.

And last but not least is the Javelina Ranch in Hildalgo County.  This a project with the Valley Land Fund, 280-acre easement, Farm and Ranch Land award of $400,000.  The contract is in final review, and we're expecting a signed contract this week.

Conservation easement is in draft and baseline fieldwork has been completed and we're awaiting a draft currently.

So all the projects are nearing completion, and I'd be glad to answer any questions you might have.

CHAIRMAN MORIAN:  I just have one.  The total project value, that's the total value of the easement granted and funded by various entities and owners?

MR. DREIBELBIS:  That's correct.

CHAIRMAN MORIAN:  Okay.  Any other questions?

MR. MELINCHUK:  Claude's got a question.

COUNCIL MEMBER ROSS:  Justin, can you go back to the Dreamcatcher Ranch, the first one --

MR. DREIBELBIS:  You bet --

COUNCIL MEMBER ROSS:  -- that we closed on?


COUNCIL MEMBER ROSS:  I don't think the slides in our book have the NRCS match.  In particular, this one here, I think NRCS match is about 2.5 million.

MR. DREIBELBIS:  And that may have been a misprint on our part.

Ted, do you...

MR. MELINCHUK:  Yeah.  I think it's definitely more than a quarter million.

MR. DREIBELBIS:  Yeah.  That's an important catch.  We'll definitely check those numbers.

MR. MELINCHUK:  Was there another one, Claude, that caught your attention in terms of the NRCS match?

COUNCIL MEMBER ROSS:  No.  Just the slides in the book.

MR. DREIBELBIS:  Yeah.  The slides -- the NRCS match got added yesterday afternoon.  We thought that was an important point.  So we ended up putting that in, but we'll double-check on those numbers.

That's an important catch.

MR. MELINCHUK:  We'll make sure well correct that.

MR. DREIBELBIS:  You bet.  Anything else? Yes, sir.

COUNCIL MEMBER KELSEY:  The fact that the project values are in the slide, does that mean all -- appraisal have all been done on these tracts?

MR. DREIBELBIS:  Ted? I may call Ted Hollingsworth up here and discuss some of those finer details.

MR. HOLLINGSWORTH:  Chairman, Members of the Council, my name's Ted Hollingsworth.  No, sir, that's not -- we still have a couple of appraisals that are pending.  The Javelina Ranch and Pietila Ranch, in particular, are pending.  Those are estimated values.


COUNCIL MEMBER BRUUN:  I had a quick clarification question and this may be one -- the Albritton Ranch, is that one that also received the NRCS grant, as well?

MR. DREIBELBIS:  Yes, it is.

COUNCIL MEMBER BRUUN:  So it's on the slide, but just -- okay --


COUNCIL MEMBER BRUUN:  -- not in here.

MR. DREIBELBIS:  Yeah, the four that received NRCS match were Albritton Ranch, Pietila Ranch, Dreamcatcher Ranch, and Santa Anna Ranch.

COUNCIL MEMBER BRUUN:  So I'll be using the Albritton Ranch as an example.  There's the Council's award, plus the NRCS match, and then there's this little of project value.  I've noticed -- and this may just be the result of certain projects, the dollars being leveraged more than others; but why in this case -- or could you say why is the project value so much closer to the total grant award versus being leveraged as a higher value?  Does that make sense, this question?

Let me try to find another -- you know, if we're looking at, for example, you know, the Puryear Ranch, relatively -- much more relative small grant award to total project value.  I just --

MR. DREIBELBIS:  That's from landowner contribution, isn't it?

COUNCIL MEMBER BRUUN:  What would factor into that?

MR. HOLLINGSWORTH:  Yes, sir.  That's going to be -- right.  That's going to be a function of how much of the value of the project was contributed by the landowner.  In some cases -- I mean, they vary from donated easement all the way up to essentially a full-price sale.  It just depends upon the landowner.

In this case, these numbers are lifted from the original project budgets.  I believe on the Albritton Ranch, we are missing the landowner contribution.  So the actual project value is probably --

COUNCIL MEMBER BRUUN:  Is probably more than 975.

MR. HOLLINGSWORTH:  -- greater than 975,000, yes, sir.


CHAIRMAN MORIAN:  Okay.  Any other questions?  Good catches, questions.

If not, we'll move on to Briefing Item No. 4, Overview of the Projects Submitted to Texas Farm and Ranch Lands Conservation Program for Fiscal Year 18-19 Funding.  Mr. Ted Hollingsworth, please make your presentation.

MR. HOLLINGSWORTH:  Chairman, Members of the Council, good morning.  My name is Ted Hollingsworth.  I'm with the Land Conservation Program here at Texas Parks and Wildlife.  I'm also the Staff Director for the Texas Farm and Ranch Lands Conservation Program; and this presentation, we're going to talk about the applications that were submitted to the Council for consideration in this cycle.  I would point out that in the back of your binder, there is a one-page spreadsheet and we're going to go through these in the same order they appear on your spreadsheet; but those will give you the raw scoring numbers as produced by the team that scored those, for example.  So you'll have that information as we go through the presentation.

There were 15 applicants -- applications received altogether.  They were submitted by eight different NGOs.  The projects range in size from 24 acres to 9,500 acres and come from 13 different counties of the state.  The total request from the Council for funding was a little over 5.3 million dollars.  The total acreage represented was 34,683 acres, for a total project value -- and again, this is the value of the conservation easement, not the fee simple value, but the conservation easement -- that total value represented is over $44 million.  A wide range of projects, including working cattle ranches, croplands, timber operations, and wildlife management lands.  Habitats range from South Texas brush to coastal marshes; a variety of prairies and forests, including pine forest, oak forest, oak juniper, woodlands, and grasslands.  In this map, you can see that those projects are fairly well distributed, all of the state being represented except for the Trans-Pecos and the Panhandle.

Just wanted to review real quickly the selection criteria that are applied.  There are six members on the selection team who independently score all these projects.  I'm happy to report that we had extremely, extremely good agreement between each of the members for the scoring of these projects.  The threat of development or other conversion of the property is worth 20 points in that scoring process.  The cost effectiveness, the acreage, the cost, taking into consideration of where that is, what local land values are, whether or not the easement's a bargain sale or a donation, how much that -- those funds are leveraged, the requested funds are leveraged are all taken into account there.

Watershed value, the value of that property for keeping waters clean, for filtering runoff, aquifer recharge, those kind of things, springs are all taken into account there.  Fish and wildlife values, 20 points as well.  Contribution to a conservation landscape is taken into account, whether this compliments or enhances other nearby conservation efforts.  And then the terms of the conservation easement, is it in perpetuity, how restrictive of it, does it allow the tract to be broken into smaller tracts, how protective is it of the current agricultural values and fish and wildlife values is given 10 points.

And now we're going to go through those 15 projects; and we'll go through those in the order that they were scored, higher to lowest and also in the order they appear in your spreadsheet.  The first one -- yes, ma'am.

COUNCIL MEMBER MCAFEE:  Can I ask a real quick question?


COUNCIL MEMBER MCAFEE:  The percentages, are those the same as last year, the scoring percentages?

MR. HOLLINGSWORTH:  Yes, ma'am.  The ranking -- the rankings and the ranking process remain unchanged.  In fact, we only -- we had -- we only had two team members that were changed from last year's team, as well, so.


COUNCIL MEMBER BRUUN:  Ted, I have a quick question, as well.


COUNCIL MEMBER BRUUN:  Just to kind of put some of these numbers -- and remind of us -- in perspective with the last cycle, you're about to walk through 15 projects with a total funding request of about 5.3 million.  How did that compare to the last round as far as total projects and total amount requested?

MR. HOLLINGSWORTH:  Let's see, in the first round, we had 12 applicants and then I think we had three additional.  So it's very, very comparable in terms of the number of projects --

COUNCIL MEMBER BRUUN:  I know we came back and did a couple later, but --


COUNCIL MEMBER BRUUN:  -- do you remember kind of roughly total of number requested?  I'm just kind of curious to see if it --

MR. HOLLINGSWORTH:  No.  I think it's --

COUNCIL MEMBER BRUUN:  -- in a sense whether we got an increase or, you know, or --

MR. HOLLINGSWORTH:  I think we ended up with a total -- I think we ended up with a total of 12 applicants in the last biennium, partly because there just wasn't as much time to prepare; but I think there's a greater awareness in the conservation community and among landowners.  I'm getting an increasing number of calls from ranch owners just saying, "I hear y'all have a program and, you know, where do I get more information?"  So I think word's getting out about this program.

COUNCIL MEMBER BRUUN:  Good.  I'd be -- if there's -- if we can go back and just, at some point, find out or remind us what the total funding request was for the last cycle --


COUNCIL MEMBER BRUUN:  -- versus what we're looking at here, I would be interested in that.

That doesn't have to happen certainly right now.

MR. HOLLINGSWORTH:  Carla, can you pull those spreadsheets from the last biennium --


MR. HOLLINGSWORTH:  -- to get that for us?

COUNCIL MEMBER BRUUN:  My sense is that there is more.  As I would expect, like you said, there's more time and hopefully more awareness of the program.  I just wanted to see if that's going to come to fruition.

MR. HOLLINGSWORTH:  Okay.  Well, Carla will pull a copy of what we did last year and we'll try to present that before the end of the meeting today.

The first project we'd like to discuss is called the Spread Oaks Ranch.  The applicant is the Katy Prairie Conservancy.  They would be holding the easement on this property.  It's in the Coastal Bend of Texas in Matagorda County, 5,320 acres.  It's on the Colorado River.  The request is for $145,000.  This is a donated easement.  The money funds requested are to cover due diligence costs and help provide for an endowment to -- for perpetual monitoring of that property.  The total project value is estimated at two and a quarter million dollars.  There's a match of $98,000 coming from the Katy Prairie Conservancy, from the Texas Land Trust Council, and the landowner.  The in-kind donation value from the landowner is estimated at $2 million.  This represents request from the Council of 6.5 percent of the project value or about $27 an acre.

Really, really wonderful 5,000-acre tract.  Just a great diversity of farmlands, including row crop agriculture, pastures, wildlife habitat.  Corn and soybeans -- corn and soybeans are the primary crops produced.  Although, other crops are rotated on 1,700 acres.  40 percent of the crop they produce is certified organic.  Just tremendous water resource values here, including six miles of frontage on the Colorado River; four and a half miles both sides, both banks, of Blue -- Blue Creek, which is a primary tributary for the river; approximately a thousand acres of wetlands; and some significant coastal hardwood forests that are intact among that 5,000-acre -- 5,320-acre tract.

The entire ranch would be placed under conservation easement in perpetuity.  Development would be limited to three existing building envelopes.  So there would not be any additional, significant impacts to that farm.

The next project that we would like to discuss is the Tres Bahias Ranch.  The Texas Agricultural Land Trust is the sponsor for that project.

Again, this one's also in the Coastal Bend in Calhoun County, about 9,500 acres --

CHAIRMAN MORIAN:  Ted, can you go back to that map again?


CHAIRMAN MORIAN:  I just want to make sure I know where we are.  Okay, thanks.

COUNCIL MEMBER MCAFEE:  What is that to the left on the bottom?

MR. HOLLINGSWORTH:  To the left on the bottom?

COUNCIL MEMBER MCAFEE:  It's kind of pinkish looking.

MR. HOLLINGSWORTH:  Oh, there's a huge refinery complex; and I believe those are evaporation ponds associated with that industrial complex.  The colors change just a little bit when you bring something out of Google Earth into the program.  I try to adjust it as best I can.  I don't think the original is quite that pink; but, again, those are some large -- as far as I know, those are evaporation ponds.

COUNCIL MEMBER MCAFEE:  I couldn't get my glasses to quite focus on what it was.

MR. HOLLINGSWORTH:  Very, very significant potential conservation here at 9,500 acres.

The total project value is over nine and a half million dollars.  That's the estimated value of that donation.

Currently, Texas Agricultural Land Trust -- and you'll hear me refer to the Texas Agricultural Land Trust as TALT -- currently, they have not identified the match.

The request to the Council would just cover due diligence and some of the endowment necessary to monitor that.  It represents a tremendous project value and a cost per acre of about $19 an acre.

Staff will not be recommending this one for funding at this time, simply because TALT has not identified the funding -- the source of funding that they would need to acquire that easement.  The current owners took this property over.  It was quite brush infested.  It had been sort of neglected for a number of years.  The are actively restoring native habitat, as well as pastures and prairies for -- and they're tightening up that cattle operation.  It's a good cattle operation.

There are 16 miles of frontage on tidal bays and estuaries; 1,500 acres of natural, native wetlands and wet grasslands; and 8,000 acres of coastal prairie with some native live oak mottes.  So tremendous potential for conservation here.  The conservation easement that's been verbally negotiated with the landowners would allow for one subdivision of that ranch, and they haven't agreed yet on building envelopes; but those would be commensurate with the size of the property and the operation of the property, and the easement would be in perpetuity.

This is in the Southern Edwards Plateau in Real County.

The project is 1,640 acres.  The amount requested is $553,200, against a total project value of about 2.2 million.  There is an NRCS match available for this project.  The in-kind landowner donation is over half a million dollars.  The request to the Council represents 26 percent of that project value or a price per acre ofabout $350.


MR. HOLLINGSWORTH:  I'm not privy to those numbers.  They haven't been published by NRCS yet.

Claude, is that correct?

COUNCIL MEMBER ROSS:  That's correct, Ted.

MR. HOLLINGSWORTH:  That's correct.  In general, it's going to be approximately -- it's going to be approximately twice what the request is or twice what the landowner value is.  So I'm going -- I'm just going to stick my neck out and assume it's a little over a million dollars.

The Krause Ranch is a working cattle operation; will be managed in accordance with an NRCS management plan.  The owners have a very strong native habitat ethic and are working to maintain fish and wildlife values on that ranch while they work to make it an efficient cattle operation.  It does include several springs, some of which form headwaters for the Frio River.  There are karst features on the property, several rare plants, and a couple of listed birds occur on that ranch.  Thirty acres adjacent to the ranch are not going to be included in that conservation easement.

That's where the ranch and farm homestead are.  The owners would reserve a couple of modest building envelopes within that thousand -- 1,640-acres, those locations to be determined.  The easement would be in perpetuity and there would be no provision for subdividing that tract.

The next project is the Cornelius Ranch Project, another project sponsored by the Texas Agricultural Land Trust on the Central Coast/Mid Coast in Matagorda County.  Thirty-five -- a little over 3,500 acres.  The request is for 120,000, against a total project value of over $4 million.  This is another project for which TALT has not yet identified the match or the funds for actual acquisition of the conservation easement.  I would just add that on this one and on Tres Bahias, staff with Texas Parks and Wildlife and several other agencies are working with TALT to try and identify potential sources of funding for those just extremely, extremely high value projects and projects we all hope come to fruition.  So we are actively working with them to identify that; but as of today, those take-out strategies have not been identified.  If they are and if this project were to come back before the Council, the request would represent 3 percent of the total project value or about $33 per acre, $34 per acre.

This is a working cattle operation.  It is focused on restoration of native prairies and pastures, maintenance of wetlands.  Two and a half miles of frontage on East Matagorda Bay, which is of course the Intercoastal Waterway as that point; 4.3 miles of frontage on Caney Creek; 400 acres of low tidal marsh.

There's a 32-acre natural oxbow lake.  This property does attract tens of thousands of migratory and resident shorebirds and waterfowl.  Very important stopover habitat, high conservation values, and high working land values as well.

Now, the conservation easement would be in perpetuity.  The owners would reserve a single 5-acre residential envelope and a 5-acre agricultural building envelope.

The request to the Council represents 1.5 percent of the project value or a price per acre of about $49.

About half of that ranch is an improved pasture.  Some grain crops are raised to help supplemental feeding of the livestock.  The ranch straddles the north fork of the San Gabriel River.

About 1.2 miles run right through the middle of that ranch.  What is not in improved pastures, is in intact oak and oak juniper woodlands that support native wildlife, including the Golden-cheeked warbler.  The easement would be perpetual; would limit subdivision to four parcels.  I believe the owners are -- want to -- are entertaining the prospect of leaving parcels to their children, but could be divided into four smaller parcels.  Development would be limited to an existing 48 -- 49-acre pasture, one 5-acre, and two 2-acre building envelopes.

The next project is the Bartush Ranch.

The Nature Conservancy is the sponsor of that project.

The Bartush Ranch is in North Texas, Northeast Texas on the banks of the Red River, overlooking the Red River in Cooke County, 1,620 acres.  The request is for just under $400,000.  I guess the total project value of
about one and a half million.  There is an NRCS match available for this project.  The in-kind landowner contribution here is $364,500.  The request to the Council represents about 27 percent of the project value or $244 per acre.

This is a working cattle operation.  The topography and the terrain do not support a real high density of cattle.  There are some improved pastures to support that cattle operation, but much of this is in rugged breaks on the bluff overlooking the Red River there.  Very important habitat, wonderful diversity of vegetation.  We've had several botanists on the property to look at that.  About 1,500 acres of mature and even some old growth cross timbers property and as most of you know, cross timbers habitat is a high conservation priority for the State just because there's so little of it left of the hundreds of thousands of acres of the original cross timbers.  Dallas, Fort Worth, and those metroplexes and those towns and agriculture development has converted most of that now.  So this is very valuable from a conservation standpoint.  There is some intermixed with that cross timbers, there is some remaining -- what we call Fort Worth prairie.  Some of that Northeast Texas prairie and there are Black-capped vireo on the property.

The conservation easement would be in perpetuity on 1,620 acres of what is a larger 3,000-acre ranch.  No subdivision would be allowed, and one or two 5-acre building envelopes would be negotiated in the process of working through that conservation easement.

CHAIRMAN MORIAN:  Which -- go back to the map.  Which 1,500 acres is going to be --

MR. HOLLINGSWORTH:  The project sponsor is here, and I'm going to have to ask either Jeff or David to come forward and identify on this map where the balance of that ranch is.

MR. DAVID BEZANSON:  Yes, sir.  The Bartush family or their family company has just some pastures that are kind of adjacent on the west side on the river, also south of the county road which makes south boundary and then on the east side.  Basically, we -- with the easement, we kind of try to achieve getting the area with the most diverse -- the highest diversity of habitats.  Also most of the land that's in current production, but couldn't do it all.  So we wanted to do as much as we could that was contiguous.

MR. MELINCHUK:  That was David Bezanson with the Nature Conservancy, for the record.


MR. MELINCHUK:  Thank you.

MR. HOLLINGSWORTH:  Does that answer your question?


MR. HOLLINGSWORTH:  Okay.  The next project we would like to discuss is the Longleaf Ridge.

The project -- the project sponsor is the Texas A&M Forest Service.  I would mention that the Nature Conservancy has worked closely with them on several conservation easements in the larger Longleaf Ridge area.  The Longleaf Ridge is a forest complex that historically supported a great deal of longleaf, which as most of you know is a habitat type that is much in decline in Texas.  The entire Longleaf Ridge system covers an estimated 190 acres.  Of that, A&M Forest Service proposes to put a conservation easement 5,511 acres of that.

It is in Jasper County in deep East Texas.  The request is for $400,000 against an estimated total project value of almost 2.7 million.  There is match from the Nature Conservancy, and this is a U.S.D.A. Forest Legacy Program.  I would mention that in Texas, only forests in that Longleaf Ridge complex have qualified so far for Forest Legacy Program.  This is a nationwide competitive grant program and these forests -- these Longleaf Ridge forests are considered to be high enough quality and value to warrant funding through that legacy program.

No in-kind landowner donation here, but the request to the Council represents only 15 percent of the estimated project value or a price per acre of about $73.  The majority of this 5,511 acres consists of working forest and timber plantation.  And I don't know the exact acreage, but there's a very significant area that is in conventional timber plantation.  There's a significant area that's in native forest, but is managed for timber yield.  I would also mention that there's -- just looking at the map -- probably 1,500 acres -- and Jeff or David, correct me -- but that are protected because they're within stream corridors.  They include pitcher plant bogs and other sensitive areas that the timber company is respecting and working around.  So very high -- very high fish and wildlife value in addition to that timber value.  Some of those plant communities such as those pitcher plant bogs are quite rare in Texas.

The conservation easement would be in perpetuity.  It would prohibit any further subdivision of that 5,511-acre tract, and it would reserve one 10-acre building envelope and one 10-acre envelope for a future lake or reservoir.

The next project we'd like to talk about is the Inspiring Oaks Ranch.  Again, in the central Edwards Plateau area.  The Hill Country Conservancy is the sponsor for this project.  It is in Hays County.

It's a thousand acres.  The request is for $705,000.  So the total project value is estimated at over five and a half million dollars.  Match would be coming from the landowner, from the Hill Country Conservancy, and from
the NRCS.  The value of the in-kind landowner donation is estimated about $3.4 million.  The request to the Council represents about 12 and a half percent of the total project value or a price per acre of $705,000.

MS. LORI OLSON:  $705.

MR. HOLLINGSWORTH:  $705 per acre.  If that's all my tongue gets twisted this morning, we're in good shape.

The current management of the property, the owners really are -- really are focusing on restoring those native Edwards Plateau values.  Right now, there's no cattle on the ranch.  The owners do anticipate the possibility of introducing cattle as a management tool in the future; but currently, their focus is on restoring those native Edwards Plateau fish and wildlife habitats.  The ranch preserves much of Wanslow Creek, which is a very important tributary of the Blanco River.  It's a permanent creek with springs in it; and the property itself conserves a very significant, a very native mosaic of Hill Country woodlands, Savannah and grasslands.

The conservation easement would be permanent, would be on a thousand acres out of a larger 1,150-acre ranch.  The other 150 acres, the landowners would keep that aside for future development and they would like to reserve up to four 3-acre building envelopes on that 1,000 acres.

The next project is called Spoonbill Farms.  It's sponsored by Texas RICE, which stands for Rice Industries for Conservation of the Environment; been active on the coast for a number of years.  Their focus is on waterfowl habitat.  This is in the Coastal Bend in Matagorda County.  This is a donated easement.

RICE is requesting $57,000 to conserve 304 acres.  Total project value is estimated at a little over 200,000.

The -- with in-kind landowner donation estimated at about $130,000 worth.  The request from the Council represents about 27 and a half percent of that project value or a price per acre of $187.50.

112 acres, approximately half of that 304-acre tract, are in farmland.  This is a large pasture that's rotated out.  It's set up for rice production; but that's rotated with sorghum, corn, soybeans, left fallow.  And in the offseason, it is left with shallow water on it for wildlife and wading birds.

It attracts tens of thousands of wading birds and waterfowl.  They've gotten in the habit of coming to this ranch.  It is heavily used by the birds.

192 acres of that ranch are in mature coastal live oak forest, and this tract is adjacent to a 175-acre conservation easement that's just to the north of similar habitat.  It's a similar mosaic of wetlands and forest.  So the two would -- this one would compliment -- would enhance that other conservation easement.  The conservation easement would be perpetual, would prohibit any subdivision.  The owners would reserve only an existing 1-acre building envelope, and the easement would be intended to protect the current ag uses and that coastal forest.

COUNCIL MEMBER KELSEY:  Ted, who has the

other conservation easement, the 125 or --

MR. HOLLINGSWORTH:  Texas RICE also holds that conservation, yes, sir.

The next project is called the Sechrist Ranch.  TALT is the sponsor for that project.  This one is also in the Edwards Plateau, sort of west central Texas in Gillespie County, 210 and a half acres.  The request is for $338,411, against a total project value of a little over 1.7 million.  This one has an NRCS match available and, of course, the landowner contribution as a part of that NRCS program.  That landowner contribution represents $338,411.  The request to the Council represents a little over 19 percent of the project value or a price per acre of $1,607.

This is a working cattle operation which specializes in holistic production of organic grass-fed cattle.  The ranch is bisected by White Oak Creek, which is a tributary of the Pedernales River.  The ranch has
about a mile of frontage on the Pedernales River.  You might have noticed the high cost per acre and that's just outside Fredericksburg in Gillespie County, an area that, as we all know, is just where land values are very
high right now.

The property has been managed for some time under a Texas Parks and Wildlife management -- wildlife management plan.  The easement would be perpetual and would conserve 200 of that 210-acre ranch, subdivision and construction of any structures or infrastructure at all would be prohibited in perpetuity on that 200 acres.

The next project is called the Cherry Springs Ranch.  The Hill Country Conservancy is the sponsor of this application.  Another project in the heart of Texas, the central Edwards Plateau area of Texas in Blanco County.  It actually straddles the Blanco and Burnet County line; 1,040 acres.  The request from HCC is for $715,000, against a total project value of nearly $6 million.  A match -- some match is coming from the landowner and from the Hill Country Conservancy.  The in-kind landowner donation represents over $2 million of that value.  The request to the Council would represent about 12 percent of the project value or a price per acre of $687.50.

This ranch is managed strictly for wildlife.  There are currently no cattle on the ranch.

The landowners have been actively trying to restore Hill Country habitats to protect those springs and karst habitat.  Some very significant springs on this property.  It's limestone plateau country, with incise drainages, a lot of topography; but it does include Savannah and woodlands.  Supports a number of birds that are listed or in decline, including the Golden-cheeked warbler.

The conservation easement would be in perpetuity.  It would allow subdivision of the ranch into three tracts in the future, each with a single residential building envelope and a single agricultural building envelope.

The next project is the JTW Ranch, another project sponsored by TALT.  This one is in South Texas in Dimmit County.  The ranch is 433 acres.  The request is for 125 -- just over 125,000.  Total project value is estimated at 869 -- eight -- $689,000.  There is an NRCS match for this project and the corresponding landowner contribution, which is valued at 125 -- a little over $125,000.  The request to the Council represents a little over 18 percent of that project value or a price per acre of 288 -- $288.75.

This is a working cattle grazing operation.  They compliment cattle grazing by managing the property for deer and other -- and turkey.  I believe the hunt hogs, as well; but they supplement their income with a hunting operation.  And because of that, they are actively balancing cattle grazing operations and native habitat restoration.  It is native southern Edwards Plateau habitat.  It's a brush habitat.

Native wildlife include Javelina, bobcat, Rio Grande turkey, quail, songbirds, and the Texas Indigo snake, which is a State listed species; and it is in the recharge zone for the Carrizo-Wilcox Aquifer.  The conservation easement would permanently conserve 433 acres out of a 498-acre ranch.  That 433 acres would be -- there would be a prohibition against any development, any structures or infrastructure or subdivision in the future.

The next project is the Santa Anna Ranch project, the Upper Unit.  As you know from the earlier presentation and will recall from a couple of years ago, y'all did award funds for a conservation easement on the Lower Unit which is outlined in white on this map.  The Upper Unit being the balance of that ranch, which is outlined in yellow.  This is in, again, southern Coleman County.  The Upper Unit, the balance of that ranch, is 1,283 acres.  The request to the Council by TALT is for $282,260 against a total project value of almost one and a half million dollars.  There is an NRCS match for this project and a corresponding landowner contribution
valued at $282,260.  The request to the Council represents just over 19 percent of that project value or $220 per acre.

The ranch consists of a mosaic of native rangeland, improved pasture, and cropland, particularly that upper unit which is devoted almost entirely to rotation of grain crops and cattle grazing.  The project would enhance and compliment the lower unit, which will soon have a conservation easement on it.  That unit has frontage on the Colorado River, as you'll recall.  It does protect habitat for a range of native mammals, birds, and reptiles.  It would be a permanent conservation easement, which would prohibit subdivision and limit development to the current footprint, which includes the ranching operation and residential operation.

COUNCIL MEMBER KELSEY:  Ted, is there an easement on the upper part?

MR. HOLLINGSWORTH:  There's not currently an easement on the upper part, and we anticipate that the easement on that lower part -- we anticipate it will close in the next two or three months.  We're actively working with TALT to finalize the conservation easement.

And this is a three-way -- remember, this -- they have NRCS.  So we have to work hand in glove with Claude and his group to make sure that that conservation easement works, meets their needs, as well as the needs of the Council; but we -- but we're making steady progress there, but there's not currently an easement on the upper unit.

The next project is the Coward Land Ranch.  The sponsor for this application is the Compatible Lands Foundation.  The Compatible Lands Foundation works with active military installments to protect lands near those installments to limit the -- well, to protect the ability of our armed forces to undertake the exercises and drills and operations they need to on those bases without compromising adjacent private properties and vice versa.  So this project is just immediately west of Fort Hood in Coryell County.

The ranch is 2,637 acres.  The request is for $937,500.

Total project value is $3.8 million.  This project does have an NRCS match, does have a -- well, the landowners are contributing or would be contributing, again, that portion necessary to qualify for the NRCS grant.  The
request to the Council represents about a quarter of the total project value or a price per acre of $355.52.

The entire ranch is managed for cattle production.  Roughly 96 percent of the ranch is considered to be pastureland.  Some of that is native pasture.  Some of that is improved pasture, but about 96 percent -- most of that -- almost all of that property is in pastureland.  There are some ponds.  There's a small lake.  There are some drainages and some narrow riparian areas; but between that habitat and the native pasture, there is, in fact, still habitat especially for grassland birds.  When you've got a couple thousand acres of grasslands, you are going to support grassland birds.  And those ponds and drainages do provide habitat for native mammals and reptiles, as well.  The permanent conservation easement would allow for subdivision into six smaller parcels, each one with its own building envelope.

The next project and the last project on your list is the TZ Ranch.  The project sponsor is the Valley Land Fund.  This one is in central Cameron County on the Arroyo Colorado.  The size of the property is 23 and a half acres.  The request is for $340,000 against the total project value of about 407,000.  The landowner is contributing about $128,000 toward that value.  The request to the Council represents a request of about 73 percent of the project value.  Price per acre comes to $14,455.  There's some very high priced real estate there in central Cameron County.

The -- that 23 and a half acres includes four acres that's being farmed.  The balance of that is in remnant valley forest, that bottomland forest.  Very rare habitat type.  Unfortunately, just a small area of that habitat that's in this proposal.  The Arroyo Colorado is prone to flooding.  So there are floodplain wetlands within that mosaic of forest.  There are a number of plants and animals there that only -- in North America only occur in the Rio Grande Valley.  The conservation easement would be permanent.  We'd reserve one 2-building -- 2-acre building envelope with no restrictions.

That wraps up the 15 proposals that we received, and I'd be happy to catch my breath and respond to any questions you might have.

COUNCIL MEMBER KELSEY:  Ted, I noticed on the slide on Inspiration Oaks, is that the --

MR. HOLLINGSWORTH:  Inspiring Oaks?  Yes, sir.

COUNCIL MEMBER KELSEY:  Inspiring Oaks. It says requested amount is 705,000.


COUNCIL MEMBER KELSEY:  Whereas in later in your information, it says the amount being funded is 200.  Is the 200 the accurate number?

MR. HOLLINGSWORTH:  The request is for 705,000.  When we get into the next presentation where we talk about the recommendation of staff, there's not enough money.  If we go in order of the projects scored, there's simply not enough to fund that project in toto.

So we are recommending a partial funding for that project.  That's why the discrepancy in those two slides.

COUNCIL MEMBER KELSEY:  And the other question I had:  When you're scoring these projects and you don't have a final conservation easement, how do you handle scoring a draft conservation easement?

MR. HOLLINGSWORTH:  Well, every application includes some information about the conservation easement -- what the landowners are proposing.  Fortunately, most of those are fairly specific.  They've already talked to the landowner.  The landowner has said, "I've got to have one 5-acre, you know, residential envelope.  I've got to have one 5-acre envelope for barns."  And so we score on that basis.

Now, when we get into the process that Justin described -- I'm sorry, that James described of working through that conservation easement, sometimes there are adjustments that are made.  So the presentation that I make today is predicated on the assumption that the information we have in the application is not going to change much.


COUNCIL MEMBER MCAFEE:  I have one question.  On the Sechrist Ranch, I know y'all are not recommending that; but it was very close to some of the others in the scoring.


COUNCIL MEMBER MCAFEE:  And has a mile on the Pedernales.


COUNCIL MEMBER MCAFEE:  Do you know what caused it to score lower than some of the others?

MR. HOLLINGSWORTH:  Yes, ma'am.  Part of that was just due to the small size of the project and the cost per acre.


MR. HOLLINGSWORTH:  It didn't score very high in terms of the value.  The condition of the ranch, remember, there's 20 points for fish and wildlife value.

Because of the current quality of the habitat, it didn't score really high there.  Because of the watershed values, even though it's on the river, there are no springs or other really unique features that contribute to water quality value.  So it didn't score really high there.  The project didn't score poorly.  What I would say is that it was outcompeted by the other projects.


MR. HOLLINGSWORTH:  And I would also add that the Council certainly has the authority to dip down and fund that project if the Council feels like that that project --

COUNCIL MEMBER MCAFEE:  I was just curious because there's parts of the Pedernales River that are really great and some parts are not so great.

So I wasn't sure where this was, so.

MR. HOLLINGSWORTH:  This is just downstream from the city of -- from the town of Fredericksburg.  It's not intermittent, but it's in one of those really gravelly stretches that winds down to a trickle during dry years.

COUNCIL MEMBER MCAFEE:  That's what I was wondering.  Okay, thank you.


CHAIRMAN MORIAN:  Any other questions?

COUNCIL MEMBER BRUUN:  Yes, sir.  I had a couple questions.

Can you tell us or go back in time to what the schedule for going out for applications for scoring that led us to where we are right now for this cycle, what that looked like on the calendar, if you could?


Absolutely.  We went public with the application schedule approximately November of last year and we opened -- we opened the website to receive applications immediately.  We left it open through the end of March
and we did that in order to correspond roughly with the NRCS application schedule because there are projects and their match, as we represented today, is NRCS and there are projects that went to NRCS and they represented as their match to Texas Farm and Ranch Lands Conservation Program.  So we wanted those cycles to be fairly close.

I believe NRCS closed their cycle 15 days after we closed our cycle, but they're close enough that anyone applying for both would be able to do that within the same timeframe.

So we received all of those by the end of March.  They went to the scoring team.  We spent three or four weeks independently looking at those and we came together -- I don't remember the date -- but we came together either late April or early May to compare notes and have our formal scoring session where we scored those and we've been basically working on the presentation and there were a couple of applications where we needed to go back to the applicant and request a little more information.

COUNCIL MEMBER BRUUN:  Did -- so I gather there wasn't a concern to listing applications before we knew that the Legislature actually funded the money?



MR. HOLLINGSWORTH:  Yeah.  We had in very bold letters on the website "Subject to appropriation by the State Legislature."

COUNCIL MEMBER BRUUN:  Is that -- I was trying to follow it.  You know, these things are kind of hard to follow, as you know; but at one point in time it wasn't in there, then it was back in there.  And so fortunately, I guess we are where we are because we got it.  But we're talking about the 2 million that we effectively have to spend for the next biennium, which doesn't begin until September of this year.

MR. HOLLINGSWORTH:  September 1st, yes, sir.

COUNCIL MEMBER BRUUN:  So in the case of -- for example, the Tres Bahias, which you noted there's significant opportunity if not for there not being a match, what's -- I'll just be frank, what's the rush?  I mean, going back to the decisions we made last year, we -- if I recall and I don't remember the specifics -- but we did hold back some money to try to accommodate what later became a commitment to the Dreamcatcher Ranch, for example.  I recall something that they didn't have in their application at the time that -- whether it was an oversight or we made some -- we gave them the benefit of some additional time to get more information in and I recall even that was on a pretty crunch timeframe to try to get this done.

Do we -- I just -- I'll kind of open this as a question for discussion and your input.  I mean, do we have the flexibility to give whether it's the No. 2 ranked project or four or anybody, a little more time -- in their case, to come up with a match that you had mentioned before, your staff has been working with them trying to accommodate?

MR. HOLLINGSWORTH:  The Council certainly has the prerogative to do that.  In this case, I've been working closely with TALT.  These are projects that have value way beyond just the Texas Farm and Ranch Land Conservation Program.  We've made NFWF aware of these projects for potential Deepwater Horizon oil spill funding.  They may very well get recommended -- one or both of them -- in the cycle that occurs next year.

Those funds would not become available until the following year, which would really create an awkward situation trying to close those within this timeframe.

In the case of Tres Bahias, for example, the landowners -- although, they really would like to see the conservation easement -- it's not much of a bargain sale.  I mean, TALT is looking for $9 million and $9 million is just not real easy to come by.  And so unless they -- unless the NRDA trustees pick this one up, which is very unlikely, or NFWF picks this up for Deepwater Horizon criminal settlement funding, we just don't know of any other sources right now.  And again, if that were to occur and we were to get 2 million in the next biennium, the timing would really work out very well for them to request that funding in the next biennium to close that.  The landowners seem to be patient.  They're working closely with TALT.  They're aware of the limitations on raising $9 million right now and so we don't -- staff doesn't feel like the project's at risk.

Having said that, the Council certainly has the prerogative to set aside those funds and, you know, with the understanding that if TALT scrambles and finds that $9 million, there's a Farm and Ranch Land grant --

COUNCIL MEMBER BRUUN:  So the match has to be --

MR. HOLLINGSWORTH:  -- potential.

COUNCIL MEMBER BRUUN:  The match in some form has to be equivalent to the project value to be eligible?

MR. HOLLINGSWORTH:  Well, the project has to close, which means that somehow TALT has to come up with $9 million.  We have never -- I don't think we've represented to the Council that a project becomes ineligible if the match changes and we don't -- our concern is that a project close because if a project doesn't close, the funding that they didn't spend that was awarded by the Council, goes back to the -- just goes back into general revenue and is essentially lost.

So we focus on closing the project.

So from my perspective, TALT needs to come up with $9 million.  I'm not concerned about what that represents in terms of matching or leveraging or where that comes.  If the landowners decide that, you know, they're willing to do 50 percent bargain sale and TALT can come up with four and half million dollars, no one would be happier than I would.  I mean, I just really would love to see that project in conservation.

Same goes for the Cornelius Ranch.

COUNCIL MEMBER MCAFEE:  On that Tres Bahias, is that oil field active?

MR. HOLLINGSWORTH:  Yes, ma'am, it is.

COUNCIL MEMBER SCOTT:  On the scoring, you probably mentioned it; but one of the requirements is it be a working ranch or a crop producing acreage.

How many points does that count?

MR. HOLLINGSWORTH:  That's embedded in --

I would have to go back to the scoring criteria.

They're not criteria specifically awarded for productivity as such.  Under the statute, it's required that the property be in 1-d-1 valuation.  So in theory, it can be in wildlife valuation or timber valuation or row crop production or cattle production and all of the projects must meet that criteria.

CHAIRMAN MORIAN:  Any other questions?

If we approve what you're recommending in the next step, we basically will be out of our -- we've spent all our money.

MR. HOLLINGSWORTH:  Yes, sir, that's correct.

CHAIRMAN MORIAN:  All right.  Well, then we'll move on to Action Item No. 5, Consideration by Council of Staff Recommendations to Award Grants for Fiscal Year 18-19 Texas Farm and Ranch Lands Conservation Program.  Mr. Hollingsworth, which -- make your recommendations.

MR. HOLLINGSWORTH:  Chairman, Members of the Council, good morning.  My name is Ted Hollingsworth.  I'm with the Land Conservation Program here at Texas Parks and Wildlife.  That was for the record.  And we are going to get into the staff recommendations now based on the descriptions you just heard of the 15 projects that were submitted for consideration by the Council.

This first slide is just a list of those projects:  The Spread Oaks Ranch, the Krause Ranch, the Collins Ranch, the Bartush Ranch, Longleaf Ridge, Inspiring Oaks, and Spoonbill Ranch.  I would just point
out as Council Member Kelsey mentioned earlier, that the Inspiring Oaks Ranch -- Hill Country Conservancy requested 705,000.  I believe they're here with us this morning.  They are here -- represented here this morning.  And in discussing that project with them, they believe they would be able to close on the basis of a partial -- of a partial award of funding.

This shows the distribution of those projects:  Two in the mid coast, one in East Texas, one in Northeast Texas, and then three around the Edwards Plateau.

Seven projects recommended in total, six for full funding and one for partial funding.  This represents a combined project area of over 16,000 acres; a combined project value of almost 16 and a half million dollars.  Staff awards -- the total recommended staff award is a little over 1.8 million.  This leaves almost $200,000 for operating costs.  This includes staff time.

I would also mention that the appropriation has a provision in it for hiring a staff member and as James pointed out, staff has invested over 300,000 hours in the last biennium and having a full --

MR. MELINCHUK:  3,000.  3,000 hours.

MR. HOLLINGSWORTH:  Over 3,000 hours.

Having a -- we've done a -- we've spent a lot of time.

MR. MELINCHUK:  You can tell it's been a long year.

MR. HOLLINGSWORTH:  A lot of time.  And having a dedicated staff person, we feel like would not only relieve the rest of us to do some of what we were hired to do, some other things; but would also ensure that these projects all get the attention they deserve.

As much time as we spend, I sometimes still feel guilty that -- I read every single conservation easement.  I read every single draft of every single conservation easement; but instead of spending three or four hours going through it carefully, sometimes I have an hour to go through it.  Having a dedicated staff person would ensure that every one of these projects gets the attention it deserves.  So, again, we would reserve about $200,000 from the $2 million appropriation to cover those costs.

This represents the leveraging of the Council's awards of over nine to one, which is just a tremendous, tremendous return on investment.  I do want to remind the Council that at your last meeting, April 25th of 2016, you did adopt a motion that said in the event a project authorized for funding by the Texas Farm and Ranch Lands Conservation Council is withdrawn or is unable to make use of the grant award, the Council authorizes staff to negotiate a funding contract with the next highest ranking project or projects that can be closed within the necessary timeframe using available funds.

I just want to let you know that one project that you awarded funds to -- the one we called the Hitchcock Prairie Project -- was simply unable to close.  The project sponsor and the landowner just never
could agree up to the terms of the contract and those funds were reallocated and we're going to want to continue that practice going forward.  We don't anticipate that any of these will fail to close; but in the event that happens, we want to be able to move expeditiously to make sure those funds get awarded and none of them get left on the table.

COUNCIL MEMBER BRUUN:  So will the effect of that motion continue, or do you need a new motion?

MR. HOLLINGSWORTH:  The effect of that motion continues.  Right.  There's -- it's -- the Council has approved that.


who got the additional funding?

MR. HOLLINGSWORTH:  The Javelina Ranch is where that funding went.  So --



COUNCIL MEMBER KELSEY:  -- does the authorization of the 2 million bucks contemplate that some of that money can be used for staff?

MR. HOLLINGSWORTH:  Yes, sir.  In fact, it include -- it contemplates significantly more than 200,000.  We really -- I mean, we just really feel strongly about putting as much of that money into conservation as we can; but it actually contemplates two employees and full-time salary and benefits for two employees.  We did it the last biennium without hiring anybody.  I'm recommending against doing that again, just to be quite honest; but I do think one person would make a tremendous difference.  And I will tell you that the staff involved here at the Agency in this program are doing it because it's a good program and it's good conservation and they enjoy being a part of it.  We just don't want to spread them so thin that they're, you know, not able to do everything else that's on their plate.

And I just want to highlight what the program has accomplished.  In the first biennium or the last biennium, we were appropriated $2 million.  Y'all awarded 1.84 million.  It went to seven projects in six counties, protecting 10.37 -- 10,373 acres.  Total project value of 13.4 million, representing a leveraging of a little over seven to one.  Roel and his group, the Natural Resources Institute, have taken some -- have done some calculating of what that conserved land means for -- just for water, for example.  And this isn't -- this isn't 100 percent of what water that lands on the properties.  This is the value that having these
properties in conservation adds versus having those properties developed and the value of that water -- if you place a dollar amount on that water that's conserved by having these lands in conservation and you compare
that to the Texas Water Development Plan, the value of that water is over $11 million a year.  So, again, the return on this investment is just outstanding.

For the current biennium, we're appropriated $2 million again.  Should you choose to fund those projects that we discussed in this recommendation, we'll be protecting another 16,000 acres for a total of well over 26,000 acres.  The project value for this cycle being 16.5 million or a leverage of nine to one.  Again, 26 million -- 26,000 -- over 26,000 acres conserved at an average value or an average cost of $138 per acre, which I think is just an outstanding, outstanding return on your efforts to make the most of this program and I just wanted to underscore that and I certainly hope that the Legislature sees fit to continue this because it's just a really -- I just -- just outstanding return on the investment that's made in this program.

With that, the staff recommends the Texas Farm and Ranch Lands Conservation Council adopt the following motion:  The Council awards Texas Farm and Ranch Lands Conservation Program funds to the seven projects recommended by staff.  And I'd be happy to answer any questions.

CHAIRMAN MORIAN:  Would you back up to where one of the fund -- one more.  That one -- go forward.  There.  If one of the projects does fall through the cracks, are we approving you funding the next highest ranking project?

MR. HOLLINGSWORTH:  That's what you have done.  The Council certainly has the authority to provide a different direction or modify that or provide further instruction for staff.

CHAIRMAN MORIAN:  Out of curiosity, which one would it be?  Because No. 2, 4, and 6, you wouldn't have enough money.  I mean, there's not enough match.

So what would be the next?

MR. HOLLINGSWORTH:  Oh, we would do what we did last time around, which is contact the next highest scoring project, make them aware of the available funds and ask them to provide evidence that they could close on that amount of money or pass.  We've had applicants say, "I'm sorry.  I've got to have $700,000 to close this project and if you only have 300,000 available, I'm not going to be able to proceed."

So we would go until we found a project that we could, in fact, close with the amount of funds available.

MR. MELINCHUK:  So in other words, you'd start with Tres Bahias and make those inquiries with the applicant and then move down to the next project and so on until you found a project.

MR. HOLLINGSWORTH:  That's correct, yes, sir.

COUNCIL MEMBER BRUUN:  And by when would these projects have to close or else money basically come back?

MR. HOLLINGSWORTH:  The way the -- the way the financing works from the State, the projects -- all of the funding for the project has to be encumbered by the end of the biennium.  So in the case of the projects currently underway, we have contracts for six out of the seven.  We have a contract pending for Javelina Ranch, which is the seventh project and was kind of the latecomer to the dance.  Those projects have to be signed -- excuse me -- and then once those projects are signed, we have to create a project account and there's a step that our accounts payable folks go through to then officially encumber those funds and that has to occur by August 31st of this year.

Once those funds are encumbered, we ask all of our partners to have those projects closed within a couple of months because, otherwise, that just creates a bookkeeping burden for our accounts payable folks.

COUNCIL MEMBER BRUUN:  So for these recommendations, they have until the end of the biennium ending in 2019.

MR. HOLLINGSWORTH:  Yes, sir, that's correct.

In the case of the Hitchcock Prairie, we didn't have to wait all that long --

COUNCIL MEMBER BRUUN:  They came back and said --

MR. HOLLINGSWORTH:  -- it was, again -- right.  The landowner and the trust simply were unable to come -- to reach agreement and sign a contract.

COUNCIL MEMBER BRUUN:  So if money comes back, it's probably more likely to occur in that scenario because they have a significant amount of time to go through the process and close and encumber -- I mean, is that a fair --

MR. HOLLINGSWORTH:  Yes, sir.  I would say it would be most likely that it would become clear to our project sponsor that for whatever reason, they were just simply not going to be able to close and would notify us.  Actually, we work so closely with them, we all kind of know at the same time when there's going to be a problem.

COUNCIL MEMBER BRUUN:  Is there any chance of new money coming from some other place in the meantime into this program?  Say -- I don't know -- opportunities with the federal partners?

MR. HOLLINGSWORTH:  Well, that's a terrific question.  The statute certainly provides for funds being added to the Texas Farm and Ranch Land -- Texas Farm and Ranch Land Conservation Fund is what they call this body of dollars.  Donated funds, federal funds.  You may recall that when GLO had the program, they got a grant from CAPP, which is a federal program.

I would -- I would hope that if we had a full-time person working on this program, that they might have a little time available to seek additional funding because any additional funding that's added to the fund -- be it donations, private funds, other state grants, federal grants, whatever that source is -- absolutely, we can put through this process and apply to these projects.

COUNCIL MEMBER BRUUN:  I'd be interested to know moving forward, you know, if there is an FTE and someone that is submitting, you know, grant applications to one of our federal agencies and that would like -- I mean, any way we can provide assistance as Council Members, as an agency person, we interact pretty frequently with various federal agencies and to be able to put in a good word where we can and try to help, we would want to be able to do that.  So just keep us in the loop to the extent that y'all can.


Appreciate that.

COUNCIL MEMBER BRUUN:  And to that point, Reed, I brought up what I mentioned before, kudos to the Agency for holding on to the money, frankly.  It was a tough budget cycle, speaking, again, from someone from an agency that was having to go ask for a budget and defend requests, previous requests that had been funded.

This was not an easy legislative session to do that.  So I suspect that the information that you showed us that speaks to the value of the program, I gather that got across; and I'm pleased to see that.

CHAIRMAN MORIAN:  All right.  I only have one request and that is if one of these projects does fail to close, that you let us know.

MR. HOLLINGSWORTH:  Absolutely.  Yes, sir.  I would not want to proceed without the Chairman's blessing.

CHAIRMAN MORIAN:  We have one person who would like to speak.  Frank Davis.

MR. FRANK DAVIS:  Council Members, thank you.  I'm Frank Davis.  I'm the Director of Land Conservation for Hill Country Conservancy.  As you know, we've submitted two applications and thank you for entertaining those and glad to be a part of such a valuable portfolio of conservation projects.

In regards to the redistribution of award funds, if I may, I would like to propose maybe a modification to that.  Staff has proposed that a portion of the Lazy Bend Ranch proposal be funded.  I might propose that if a project were to fall off for whatever reason, that some of that shortfall be made up, that, you know, given our ranking, No. 6, that maybe there be an opportunity to complete the funding.  We're certainly capable of closing that project.  We have the funds in place to do so; but, you know, funds are in short supply.  So it would be a great opportunity if that could be entertained.

MR. MELINCHUK:  You said Lazy Bend?

MR. FRANK DAVIS:  Excuse me.  Inspiring Oaks Ranch.  Thank you for clarifying.  Yes, thank you very much.  So maybe that adds some important context there.  As you can see, we requested $700,000 for that project.  $200,000 is proposed to be funded.  As I said, we have sufficient money in our account; but we also have lots of other prospects that we're entertaining, and it's hard to come across that funding.  I would like to propose that this might be an avenue for closing the shortfall if something falls out.  Thank you.


Any other questions or comments?

COUNCIL MEMBER MCAFEE:  I don't have a question.  I have a comment.


COUNCIL MEMBER MCAFEE:  But I was very pleased to see the wide variety of types of projects and where they were located, and I think the staff did a very good job in presenting all the information.  Thank you.

CHAIRMAN MORIAN:  Got some good prospects.


MR. HOLLINGSWORTH:  Yeah.  I can assure you, staff wishes that we could fund more of them.

CHAIRMAN MORIAN:  Is there a motion for approval?

COUNCIL MEMBER KELSEY:  Approval of the seven projects?


COUNCIL MEMBER KELSEY:  Well, I just want to make it clear, I cannot be in favor of the Spread Oaks Ranch because I'm Advisory Director of the Katy Prairie Conservancy.  So I just wanted to make sure I'm not --

CHAIRMAN MORIAN:  You're abstaining -- you're abstaining from the Spread Oaks Ranch -- will you note that?


COUNCIL MEMBER ROSS:  Mr. Chairman, like Tom, NRCS is involved with many of these projects.  So we will be abstaining as well.

CHAIRMAN MORIAN:  All right.  Will you make a note of that?

MR. MELINCHUK:  I'm working on it.

CHAIRMAN MORIAN:  Do we have a -- you can still make a motion.

COUNCIL MEMBER KELSEY:  I move to approve the motion.

CHAIRMAN MORIAN:  Okay.  Kelsey.  Do I have a second?




MR. MELINCHUK:  Who's that?  Who's second?  Dave Scott?


There's been a motion and a second.  All in favor, please say aye.

(Chorus of ayes)

CHAIRMAN MORIAN:  Any opposed?  Hearing none, the motion carries.

We've already heard from the speaker.  I believe that --

MR. MELINCHUK:  One item left.  Public comment on the program.

CHAIRMAN MORIAN:  No one was signed up to speak?  Oh, okay.  If you would like to -- anyone who would like to speak at this point, you're welcome to step up to the mic.  It's a public comment session.  If no one is signed up -- no one has stepped up to speak.

So with that, I declare that we've done our business and we're adjourned.  I thank everybody for making the effort to be here today.

(Meeting adjourns)

In official recognition of the adoption of this resolution in a lawfully called public meeting of the Texas Farm and Ranch Lands Conservation Council, we hereby affix our signatures this _______ day of ___________________, __________.

S. Reed Morian, Chairman

Bech Bruun, Member

Rex Isom, Member  (Rusty Ray)

Thomas R. Kelsey, Member

Leslie L.W. Kinsel, Member

Natalie Cobb Koehler, Member

Roel Lopez, Member

Pam McAfee, Member

Sid Miller, Member  (Tim Kleinschmidt)

Salvador Salinas, Member  (Claude Ross)

George D. Scott, Member

John Zacek, Member




I, Paige S. Watts, Certified Shorthand

Reporter in and for the State of Texas, do hereby certify that the above-mentioned matter occurred as hereinbefore set out.

I FURTHER CERTIFY THAT the proceedings of such were reported by me or under my supervision, later reduced to typewritten form under my supervision and control and that the foregoing pages are a full, true, and correct transcription of the original notes.

IN WITNESS WHEREOF, I have hereunto set my

hand and seal this Turn in date _____ day of

________________, ________.


Paige S. Watts, CSR, RPR
CSR No.: 8311
Expiration: December 31, 2018
7010 Cool Canyon Cove
Round Rock, Texas 78681