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Tuesday, November 21, 2023
Amendment of Agenda
- Motion by Secretary McGrane to amend the agenda, moving items 7 and 8 (Statement of Investment Policy Annual Review and Strategic Reinvestment Plan Review) to the informational agenda to provide the Board more time to review this important information.
- Motion unanimously approved.
Department Report
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Timber
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Attachment: Trust Land – Timber Sales
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Eight endowment timber sales in October; six had competitive bidding.
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Two sales did not sell, will be re-auctioned.
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Net sale value exceeded appraised value by $1 million.
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541.7 million board feet of timber valued at $168.2 million under contract.
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Leases & Permits
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Attachment: Trust Land – Leases and Permits
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Issued 23 instruments in October.
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Three deeds for cottage sites at Priest Lake.
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Non-timber revenue expected to meet or exceed $7 million by year-end.
Endowment Fund Investment Board
Performance Review of Total Endowment
Consent Agenda
Results of October 4, 2023 Commercial Recreation Lease Live Auction
Results of October 4, 2023 Residential Cottage Site Lease Live Auction
Regular Agenda
Disclaimer of Interest Request DI200000-Fodge Pulp, Inc., Kootenai River
Adoption of Pending Fee Rule IDAPA 20.03.01, Rules Governing Dredge and Placer Mining Operations in Idaho
Adoption of Pending Fee Rule IDAPA 20.03.03, Rules Governing Administration of the Reclamation Fund
Adoption of Pending Fee Rule IDAPA 20.03.05, Navigable Waterways Mineral Leasing in Idaho
Adoption of Pending Rule IDAPA 20.05.01, Recreational Use of Endowment Land
Adoption of Pending Rule IDAPA 20.01.01, Rules of Practice and Procedure Before the State Board of Land Commissioners
Information Agenda
Statement of Investment Policy Annual Review
- Attachment: Statement of Investment Policy Annual Review
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Background: The Land Board had accepted the Asset Allocation Governance review from Callan in November 2014, which recommended developing a comprehensive investment policy statement for the combined trust of land and financial assets. This policy was first approved in May 2016.
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Annual Review and Revisions: The Department, in collaboration with EFIB and Callan, conducted an annual review and made revisions to the Statement of Investment Policy and its appendices. These revisions are made to keep the document current and aligned with best practices.
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Key Changes in 2023: The 2023 revisions included updating asset class valuations and percentages of the total portfolio to reflect values as of June 30, 2023. Minor textual revisions were made for clarity and accuracy. Notably, descriptions for farmland and rangeland asset classes were revised to align with the board’s current direction, which focuses on reinvesting in timberland to increase working forests in Idaho.
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Public Input and Future Directions: There were discussions about the process for transitioning lands between different asset classes, particularly timberland, and ensuring compliance with statutory requirements. This is an ongoing consideration, and the Land Board plans to provide further direction on these transitions.
Strategic Reinvestment Plan Review
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Attachment: Strategic Reinvestment Plan Review
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Overview: The Strategic Reinvestment Plan, initially approved in May 2016, is reviewed every three years. The last review was in May 2020, where the focus was set on acquiring assets to increase working forests in Idaho.
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Achievements and Investments: Since the plan's inception, approximately 54,100 acres of productive timberland have been acquired, utilizing over $99.7 million of land bank funds. These acquisitions have consistently exceeded the set hurdle rate of 3.35% net real.
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Financial Transfers: More than $133.3 million from the land bank funds have been transferred to the Permanent Fund for investment in financial assets. This includes both principal and interest earned.
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Current Status and Future Plans: As of September 30, the land bank balance was nearly $75 million. The department continues to seek investment opportunities in timberland that meet the hurdle rate and is prepared to respond quickly to potential transactions. The plan includes proactive recommendations for transferring funds from the land bank to the Permanent Fund when land transactions are not sufficient to justify holding funds in the land bank.
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Land Board's Direction: The Investment Subcommittee has reviewed and approved the continued focus on timberland investments and the proactive transfer of funds as outlined. The plan is to continue this strategy and will be reconsidered in future meetings.
Executive Session
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