Legislative Text for Mining at Dade-Collier Training & Transition Airport. By Geniusofdesapair

(graphics are from Asset Evaluation Report) Here is the Legislative Text as a companion to the Post below, this will be heard Nov. 3rd by the County Commission:

TITLE
RESOLUTION RELATING TO MIAMI-DADE COUNTY’S AIRPORT SYSTEM; AUTHORIZING THE AVIATION DEPARTMENT TO NEGOTIATE A LICENSE OR OTHER AGREEMENT WITH COLLIER RESOURCES COMPANY AND ANY OTHER COMPANIES HOLDING MINERAL RIGHTS TO PARCELS OF LAND ON THE COUNTY’S TRAINING AND TRANSITION AIRPORT LOCATED IN COLLIER COUNTY UNDER WHICH THE COUNTY WOULD BE ENTITLED TO ENGAGE IN PETROLEUM AND MINERAL EXPLORATION AND MINING AT SUCH AIRPORT; AUTHORIZING AVIATION DEPARTMENT TO NEGOTIATE ADDITIONAL AGREEMENTS WITH COMPANIES FOR THE MINING, DISTRIBUTION, AND SALE OF ANY PETROLEUM AND MINERAL PRODUCTS THAT THE AVIATION DEPARTMENT IS LEGALLY ENTITLED TO TAKE FROM THE AIRPORT GROUNDS; DIRECTING MAYOR TO RETURN TO THIS BOARD FOR ITS FURTHER CONSIDERATION OF ANY SUCH AGREEMENTS

BODY
WHEREAS, this Board desires to accomplish the purposes outlined in the accompanying memorandum, a copy of which is incorporated herein by reference,

NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF COUNTY COMMISSIONERS OF MIAMI-DADE COUNTY, FLORIDA, that this Board, having received the report entitled “Asset Evaluation: Dade-Collier Training and Transition Airport Property” prepared by the consultant for Miami-Dade County’s Aviation Department, authorizes the Aviation Department in conjunction with the County Attorney’s Office to negotiate a license or other appropriate agreement with Collier Resources Company and any other company holding mineral rights to parcels of land located on the County’s Training and Transition Airport in Collier County, under which negotiated agreement the County would be entitled to engage in petroleum and mineral exploration and mining at such Airport; authorizes the Aviation Department to negotiate agreements with any other companies for the purpose of mining, distributing, and selling any petroleum and mineral products that the County is legally able to take from the Airport’s grounds; directs the Mayor to return to this Board with any such negotiated agreements for this Board’s further consideration.

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Date:

To: Honorable Chairman Dennis C. Moss
and Members, Board of County Commissioners

From: George M. Burgess
County Manager

Subject: Acceptance of Recommendations Outlined in the Report “Asset Evaluation: Dade-Collier
Training and Transition Airport Property.””

STAFF RECOMMENDATION
Recommendation
It is recommended that the Board of County Commissioners (BCC) accept the report titled “Asset Evaluation: Dade-Collier Training and Transition Airport Property” and authorize the Miami-Dade Aviation Department (MDAD) to negotiate a license or other agreement with Collier Resources Company that owns approximately 70 percent of the mineral rights at Dade-Collier Training and Transition Airport (TNT), and any other company holding mineral rights to parcels of land at TNT. The license or agreement would entitle the County to engage in petroleum and mineral exploration and production at the airport. It is further recommended that the BCC authorize MDAD to begin to negotiate with a Collier entity or any other company, an agreement to generate to the County, revenue resulting from the exploration and production of oil and gas at TNT. MDAD will report back to the BCC for its approval, any agreements resulting from the aforementioned negotiations.

Scope
The impact of this item is countywide as Miami-Dade Aviation Department facilities are regional assets.

Fiscal Impact/Funding Source
Each option in the report was evaluated by type and availability of natural resource, environmental compliance, economic benefit, and opportunity for revenue generation. The revenue associated with the exploration and production of oil and gas, including potential bonuses, rents and royalties, is estimated to average $7 million annually over a 20-year period. In addition, other revenues such as oil and gas lease bonus, annual rentals, and environmental mitigation credit and payments could provide MDAD an additional $5.0 million over the next decade.

Track Record/Monitor
The monitor for the maintenance and operating agreement will be Gregory C. Owens, MDAD Division Director for Real Estate Management and Development.

MANAGER'S BACKGROUND
Background
For Miami International Airport (MIA) to be competitive, in addition to tightly controlling costs, it is crucial that MDAD grow non-aeronautical revenue (revenue derived from sources other than airlines), to substantially reduce the burden of these high costs upon the airlines. And, while measures are being taken to build the traditional sources of non-aeronautical revenues – parking, concessions etc. -- MDAD must find non-traditional sources of revenue, a task that it has been exploring over the last two years primarily by examining what other airports around the country and indeed the world may be doing.

Miami-Dade County, through its Aviation Department, owns and operates Dade-Collier Training and Transition Airport (TNT), consisting of 23,840 acres; only approximately 1,000 acres is required to operate the airport. In 2008, MDAD hired Lampl Herbert Consultants to work in collaboration with MDAD to identify revenue-generating opportunities at the airport and provide an assessment of the value of such opportunities. Among the potential uses and revenue sources identified by the Lampl Herbert report are:

1) Oil and gas exploration: The TNT property lies within the Sunniland Trend, an oil-prone area that extends 140 miles from Fort Myers to Miami. Assuming a net royalty position of 8 percent for all acreage, the revenue value to Miami-Dade is estimated from $59 million (at $37 per barrel) to $224 million (at $140 per barrel) for a 20-million barrel field.
2) Market value of conservation lands: This is the outright sale of the surface lands which could be expected to provide a one-time revenue gain of $22.8 million based on $1,000 per acre.
3) Mitigation: For the purpose of the restoration and enhancement of surface lands, the County or third parties could use these restoration projects to mitigate environmental impacts at internal or offsite projects.
4) Use of limestone and the quarry lakes: This project would have a dual purpose of restoring and enhancing the area in and around the five man-made lakes (where lime rock was excavated to build the TNT runway), while generating revenue. The estimated net revenue to the County is $13 million, including a mining cost of $9.75 million and revenue from the sale of aggregate of $22.75 million.
5) Recreational uses: Among such recreational activities and facilities are off-road vehicle (ORV) trails, back country trails, campground, camping facilities, and non-boat freshwater fishing. The Miami-Dade Parks and Recreation Department is exploring these activities.

More than 140 wells drilled in the Sunniland area since 1943 have led to discoveries and development of 13 oil fields. Even though the County owns 100 percent of the surface land associated with the 23,840 acres, the Collier family owns most of the mineral rights, approximately 70 percent, which they are free to explore. Exxon-operated Raccoon Point Field is adjacent to TNT and has operated since 1978. Through 2008, it has produced an estimated 20 million barrels of oil using technology and equipment that is so unconventional and environmentally friendly that a layperson, upon stumbling upon the site, would not suspect the nature of the operation. MDAD and its consultant anticipate that a TNT field could produce a similar volume of oil.

MDAD would like to proceed with the first option at this time. The other options may be recommended for implementation at a future date.

Therefore, it is recommended that the Board authorize the MDAD to negotiate a license or other agreement with Collier Resources Company and any other company holding mineral rights to parcels of land at TNT, under which the County would be entitled to engage in petroleum and mineral exploration and production at TNT. It is further recommended that the BCC authorize MDAD to begin to negotiate with a Collier entity or any other company, an agreement which would generate for the County, revenue resulting from the exploration and production of oil and gas at TNT. Any agreements resulting from the aforementioned negotiations will be presented to the Board for approval.


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Assistant County Manager