August 13, 2015 WALK-IN BOARD MATTER #3. Consideration of a Proposal to Exchange State Trust Land in Sheridan County

August 13, 2015 WALK-IN BOARD MATTER #3 ACTION: AUTHORITY: Consideration of a Proposal to Exchange State Trust Land in Sheridan County W.S. 36-1-110,-111; Board of Land Commissioners Rules and Regulations, Chapter 26, Section 5 BOARD ALTERNATIVES: Approve Resolution Approving Agreement to Initiate the Bull Creek Ranch Exchange Reject Resolution Approving Agreement to Initiate the Bull Creek Ranch Exchange and remove proposal from Category II exchange list PRIVATE LAND Bull Creek Ranch Lands: See Exhibit A STATE TRUST LAND See Exhibit B ANALYSIS: S. K. Johnston, Jr. would like to acquire an approximate Two Thousand Two Hundred Seventy-One acres of state trust land in Sheridan County, Wyoming. S. K. Johnston, Jr. will purchase enough land in Johnson County, Wyoming, also known as the Bull Creek Ranch to facilitate the exchange. S. K. Johnston, Jr. will hold title, or an option to purchase the exchange lands, at least thirty days prior to the final presentation to the Board of Land Commissioners (Board) for consideration. The exchange only contemplates the surface estate at this time. Should the mineral estate be found to be amenable for inclusion in a value for value exchange, the mineral estates will be noted as such in the Detailed Analysis and presented to the Board for final consideration. Should the value of the state trust lands contemplated in the exchange be less than that of the Bull Creek Ranch, S. K. Johnston, Jr. will facilitate the exchange to include additional state trust lands in Sheridan and Johnson Counties to achieve a value for value exchange. TRUST LAND MANAGEMENT OBJECTIVES: The proposal meets the Trust Land Management Objectives by consolidating ownership patterns and providing better access to manage State Trust Land. This exchange could provide a site for the Wyoming Water Development Commission (WWDC) to develop a reservoir that would benefit the State s water resources. This proposed reservoir is one of the water storage facilities identified in Governor Mead s Wyoming Water Strategy by assisting in the Water Development Initiatives Ten in Ten Project. The WWDC has identified a need for a large reservoir in this area and its placement on the Bull Creek Ranch best fits its objectives. It is also anticipated the exchange will result in possibly greater annual revenues to the State s trust beneficiaries, and may provide for long-term appreciation returns greater than that realized by the state trust lands contemplated in this exchange. ESTIMATED MARKET VALUE: As S. K. Johnston, Jr. has proposed to transfer lands of equal value in exchange for the state trust land, a preliminary value estimate is not required at this time. Both the deeded and the state trust land would be appraised with the assumption of 1

legal access and for the highest and best use. EXCHANGE PROCESS: Additional information is necessary in order to complete the detailed analysis as required in the Board of Land Commissioners Rules and Regulations (Board s Rules). The next steps in the land exchange process would be to: (1) acquire the appraisals of the parcels; (2) assess and compare the existence and importance of any wildlife habitat and wildlife-oriented recreational opportunities located on the properties as determined by the Wyoming Game and Fish Department; (3) assess and compare the existence and importance of any public recreation opportunities or cultural resources located on the properties, as determined by the Wyoming Department of State Parks and Cultural Resources; (4) complete the potential revenue generation and value appreciation of the lands owned/controlled by S. K. Johnston, Jr. Land compared to the identified state trust land; (5) further assess and compare the management of the exchange parcels; and (6) further evaluate the extent to which the proposed exchange would provide or improve a school or community need, or improve public access/recreational opportunities. If the Board approves the attached Resolution Approving Agreement to Initiate the Bull Creek Land Exchange, and after OSLI and S. K. Johnston, Jr. execute an Agreement to Initiate the Exchange, the final detailed analysis, including the appraisals, will be made available to the public. After the final detailed analysis is made available to the public, OSLI will hold a public hearing in coordination with the county commissioners. After public comment is accepted, the Board will further consider the proposed exchange in open session and determine whether to direct OSLI to complete the exchange. DIRECTOR'S RECOMMENDATION: The Director recommends the Board approve the attached Resolution Approving Agreement to Initiate the Bull Creek Ranch Exchange, and allow OSLI to begin its analysis of the exchange by preparing a Detailed Analysis of the transaction. BOARD ACTION: 2

EXHIBIT A Legal Description of Bull Creek and Kelly Creek Ranch Lands Located in Johnson County, Wyoming Township 49 North, Range 82 West, 6 th P.M. Section 6: Lot Four (4), Lot Five (5), Lot Six (6), SE1/4 NW1/4, NE1/4SW1/4; Containing 206.34 acres, more or less Township 49 North, Range 83, West 6 th P.M. Section 1: Lot One (1), Lot Two (2), Lot Three (3), Lot Four (4), S1/2 NE1/4, NW1/4 SW1/4; Section 2: Lot Three (3), Lot Four (4); Section 3: Lot One (1), Lot Two (2), Lot Five (5), Lot Six (6); Containing 510.84 acres, more or less Township 50 North, Range 82 West, 6 th P.M. Section 20: SE1/4 SW1/4, S1/2 SE1/4; Section 29: N1/2; Section 30: Lot One (1), Lot Two (2), Lot Three (3), E1/2 NW1/4, S1/2 NE1/4, NE1/4 NE1/4; Containing 768.73 acres, more or less Section 10: S1/2 NE1/4, SE1/4; Section 11: W1/2, W1/2 E1/2; Section 13: Lot Six (6); Section 14: Lot Three (3), Lot Four (4), Lot Five (5), Lot Six (6); Section 15: Lot One (1), Lot Three (3), Lot Four (4), Lot Five (5), S1/2; Section 22: E1/2, N1/2 NW1/4, SW1/4 NW1/4, N1/2 SW1/4, SE1/4 SW1/4; Section 23: All; Section 24: W1/2, W1/2 E1/2, SE1/4 SE1/4; Section 25: N1/2, N1/2 S1/2, SW1/4 SW1/4; Section 26: All; Section 27: E1/2, W1/2 W1/2, NE1/4 NW1/4, SE1/4 SW1/4; Section 34: Lot One (1), Lot Three (3), Lot Five (5), Lot Six (6), E1/2, NE1/4 NW1/4; Section 35: All; Containing 6086.92 acres, more or less PATENTED MINING CLAIMS Township 49 North, Range 83 West, 6 th P.M. Section 3: Loquatious (A-3); Containing 4.58 acres, more or less Section 33 & 34: Loquatious, Shenadoah, Mayflower, Little Joe, and No. 3; Patented Mining Claims Containing 73.92 acres, more or less Total Fee Lands containing 7651.33 acres, more or less STATE OF WYOMING SURFACE GRAZING LEASE #2-5150 Township 49 North, Range 83 West, 6 th P.M. Section 1: SE1/4 NW1/4, NE1/4 SW1/4, N1/2 SE1/4; 3

Containing 160.0 acres, more or less Section 13: W1/2 SW1/4; Section 14: Lot One (1), Lot Two (2), S1/2; Section 15: Lot Two (2); Section 22: SW1/4 SW1/4; Section 34: Res. Lot Two (2), Lot Four (4), Lot Seven (7), Lot Eight (8); Containing 623.22 acres, more or less Total State Lease containing 783.22 acres, more or less UNITED STATES OF AMERICA SURFACE GRAZING LEASE #7036 BULL CREEK ALLOTMENT #32018 Township 49 North, Range 83 West, 6 th P.M. Section 1: SW1/4 NW1/4; Section 2: Lot One (1), Lot Two (2); Containing 118.30 acres, more or less Township 50 North, Range 82 West, 6 th P.M. Section 30: NW1/4 NE1/4; Containing 40.0 acres, more or less Section 22: SE1/4 NW1/4; Section 27: SE1/4 NW1/4, NE1/4 SW1/4; Containing 120.0 acres, more or less Total Federal Lease containing 278.30 acres, more or less Fee Lands, Federal Lease, and State Lease containing 8712.85 acres, more or less Summary: Acres Fee Land and Patented Mining Claims 7,651.33 State of Wyoming Grazing Lease (No. 2-5150) 783.22 United States Grazing Lease (No. 7036) 278.30 Total 8,712.85 (more or less) 4

EXHIBIT B Legal Description of State Trust Lands Located in Sheridan County, Wyoming Township 54 North, Range 84 West, 6 th P.M. Section 22: NE1/4 & E1/2 SE1/4; Section 27: SE1/4 NE1/4, E1/2 SE1/4, N1/2 SW1/4 & W1/2 SE1/4; Section 28: SW1/4, S1/2 NW1/4 & S1/2 SE1/4; Section 33: NW1/4; Section 34: N1/2 NE1/4, S1/2 NE1/4, S1/2 NW1/4 & N1/2 SW1/4; Section 35: NW1/4 & NE1/4; Section 36: All;Containing 2,271.98 ± acres, more or less 5

RESOLUTION APPROVING AGREEMENT TO INITIATE EXCHANGE WITH S.K. JOHNSTON, JR. WHEREAS, pursuant to Wyo. Stat. Ann. 36-1-107, 36-1-111, 36-2-101, and Chapter 26 of the Rules of the State Board of Land Commissioners (Board), the Board is empowered to make decisions regarding the exchange of State Trust Lands for private lands; and WHEREAS, pursuant to Chapter 26 of the Board Rules, any person, including the Director of the Office of State Lands and Investments (Director), may propose a land exchange by placing the parcels to be acquired by the Board of Land Commissioners (Board) in the exchange on the Category I Acquisition List, and placing the parcels to be conveyed by the Board in the exchange on the Category I Disposal list; and WHEREAS, pursuant to Chapter 26 of the Rules and Regulations of the Board, the Director shall determine if the parcels may be suitable for disposal and acquisition and, if found suitable, the Director may place them on the respective Category II Acquisition and Disposal lists; and WHEREAS, S. K. Johnston, Jr. has proposed to exchange deeded land of approximately 6,086.92 acres in Johnson County, Wyoming (Bull Creek Ranch Lands), more particularly described in Exhibit A, as to be defined upon preliminary approval of the Board and in coordination with the Office of State Lands and Investments (OSLI), for approximately 2,271.98 acres of State Trust Lands, located in Sheridan County, Wyoming, (State Trust Lands), more particularly described in Exhibit B ; and WHEREAS, the Director has placed the Bull Creek Lands and the State Trust Lands on the Category II Acquisition and Disposal lists and presented the matter to the Board during executive session on August 12, 2015; and WHEREAS, a preliminary detailed analysis of the proposed exchange was presented to the Board during open session on August 13, 2015; and WHEREAS, the Board found that the exchange has the potential to satisfy the Board s Trust Land Management Responsibilities in that: i.) ii.) iii.) the income generating potential and probable appreciation rate of the acquired lands after the exchange is on par with the income generating potential of the state lands disposed of by the exchange; and the exchange will have a positive effect on the manageability of lands acquired as part of the exchange when compared with the State Trust Lands disposed of by the exchange; and the exchange would provide for a State and community need for a possible site for the Wyoming Water Development Commission (WWDC) to develop a reservoir that would benefit the State s water resources. NOW THEREFORE BE IT RESOLVED that the Wyoming Board of Land Commissioners hereby authorizes and directs the Director and (OSLI) to enter into an Agreement to Initiate the Exchange of described State Trust Land Parcels for the Bull Creek Ranch Lands, to be described in more detail upon the execution of appraisals; provided, however, the Agreement to Initiate the Exchange: Resolution to Approve Agreement to Initiate Exchange with S.K. Johnston, Jr. Page 1 of 5

1. May allow for a cash equalization payment of up to twenty-five percent (25%) of the value of the lands exchanged; and 2. Provides for an exchange of merchantable title to the properties; and 3. Is acceptable to the Director of the OSLI and the Attorney General s Office; and BE IT FURTHER RESOLVED that following the public process of gathering comment on the proposed exchange, OSLI shall make a final recommendation to the Board at a public meeting regarding whether it should consummate the exchange of land; BE IT FURTHER RESOLVED that the Director, who is also secretary of the Board, and the Governor as President, are authorized to execute the necessary agreements on behalf of the Board and any other documents required to carry out the provisions of this resolution. The foregoing was approved and adopted this 13 th day of August, 2015. STATE OF WYOMING BOARD OF LAND COMMISSIONERS Matthew H. Mead, President Resolution to Approve Agreement to Initiate Exchange with S.K. Johnston, Jr. Page 2 of 5

EXHIBIT A Legal Description of Bull Creek and Kelly Creek Ranch Lands Located in Johnson County, Wyoming Township 49 North, Range 82 West, 6 th P.M. Section 6: Lot Four (4), Lot Five (5), Lot Six (6), SE1/4 NW1/4, NE1/4SW1/4; Containing 206.34 acres, more or less Township 49 North, Range 83, West 6 th P.M. Section 1: Lot One (1), Lot Two (2), Lot Three (3), Lot Four (4), S1/2 NE1/4, NW1/4 SW1/4; Section 2: Lot Three (3), Lot Four (4); Section 3: Lot One (1), Lot Two (2), Lot Five (5), Lot Six (6); Containing 510.84 acres, more or less Township 50 North, Range 82 West, 6 th P.M. Section 20: SE1/4 SW1/4, S1/2 SE1/4; Section 29: N1/2; Section 30: Lot One (1), Lot Two (2), Lot Three (3), E1/2 NW1/4, S1/2 NE1/4, NE1/4 NE1/4; Containing 768.73 acres, more or less Section 10: S1/2 NE1/4, SE1/4; Section 11: W1/2, W1/2 E1/2; Section 13: Lot Six (6); Section 14: Lot Three (3), Lot Four (4), Lot Five (5), Lot Six (6); Section 15: Lot One (1), Lot Three (3), Lot Four (4), Lot Five (5), S1/2; Section 22: E1/2, N1/2 NW1/4, SW1/4 NW1/4, N1/2 SW1/4, SE1/4 SW1/4; Section 23: All; Section 24: W1/2, W1/2 E1/2, SE1/4 SE1/4; Section 25: N1/2, N1/2 S1/2, SW1/4 SW1/4; Section 26: All; Section 27: E1/2, W1/2 W1/2, NE1/4 NW1/4, SE1/4 SW1/4; Section 34: Lot One (1), Lot Three (3), Lot Five (5), Lot Six (6), E1/2, NE1/4 NW1/4; Section 35: All; Containing 6086.92 acres, more or less PATENTED MINING CLAIMS Township 49 North, Range 83 West, 6 th P.M. Section 3: Loquatious (A-3); Containing 4.58 acres, more or less Section 33 & 34: Loquatious, Shenadoah, Mayflower, Little Joe, and No. 3; Patented Mining Claims Resolution to Approve Agreement to Initiate Exchange with S.K. Johnston, Jr. Page 3 of 5

Containing 73.92 acres, more or less Total Fee Lands containing 7651.33 acres, more or less STATE OF WYOMING SURFACE GRAZING LEASE #2-5150 Township 49 North, Range 83 West, 6 th P.M. Section 1: SE1/4 NW1/4, NE1/4 SW1/4, N1/2 SE1/4; Containing 160.0 acres, more or less Section 13: W1/2 SW1/4; Section 14: Lot One (1), Lot Two (2), S1/2; Section 15: Lot Two (2); Section 22: SW1/4 SW1/4; Section 34: Res. Lot Two (2), Lot Four (4), Lot Seven (7), Lot Eight (8); Containing 623.22 acres, more or less Total State Lease containing 783.22 acres, more or less UNITED STATES OF AMERICA SURFACE GRAZING LEASE #7036 BULL CREEK ALLOTMENT #32018 Township 49 North, Range 83 West, 6 th P.M. Section 1: SW1/4 NW1/4; Section 2: Lot One (1), Lot Two (2); Containing 118.30 acres, more or less Township 50 North, Range 82 West, 6 th P.M. Section 30: NW1/4 NE1/4; Containing 40.0 acres, more or less Section 22: SE1/4 NW1/4; Section 27: SE1/4 NW1/4, NE1/4 SW1/4; Containing 120.0 acres, more or less Total Federal Lease containing 278.30 acres, more or less Fee Lands, Federal Lease, and State Lease containing 8712.85 acres, more or less Summary: Acres Fee Land and Patented Mining Claims 7,651.33 State of Wyoming Grazing Lease (No. 2-5150) 783.22 United States Grazing Lease (No. 7036) 278.30 Total less) 8,712.85 (more or Resolution to Approve Agreement to Initiate Exchange with S.K. Johnston, Jr. Page 4 of 5

Bull Creek Ranch Exchange Proposal Legend Forest_Service Bull Creek S.K. Johnston Jr. Lands State Trust Lands Acquired in Exchange Bureau of Land Management State Trust Land Sources: Esri, HERE, DeLorme, USGS, Intermap, increment P Corp., NRCAN, Esri Japan, METI, Esri China (Hong Kong), Esri (Thailand), TomTom, MapmyIndia, OpenStreetMap contributors, and the GIS User Community

Bull Creek Ranch Exchange Proposal Sheridan State Trust Land Disposed S. K. Johnston, Jr. Land Johnson Bull Creek Ranch Big Horn Legend Forest_Service Bull Creek S.K. Johnston Jr. Lands State Trust Lands Acquired in Exchange Bureau of Land Management State Trust Land Washakie Sources: Esri, HERE, DeLorme, USGS, Intermap, increment P Corp., NRCAN, Esri Japan, METI, Esri China (Hong Kong), Esri (Thailand), TomTom, MapmyIndia, OpenStreetMap contributors, and the GIS User Community