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Land Board Hearing Recap

Tuesday, March 19, 2024

• All members were present
• Review the Final Agenda
• Download the Meeting Materials

Department Report

Timber

• Attachment: Trust Land – Timber Sales

• Department sold 3 endowment timber sales at auction, 2 with competitive bidding.

• Net sale value was 16% higher than appraised values.

• Sold 21.8 million board feet for nearly $4.3 million.

• Offering about 50 million board feet for auction in March, valued over $8.5 million.

• Current volume under contract: 521.6 million board feet, 149 active contracts valued at $148 million.

• Average contract price surpasses 3-year average.

• Timber harvest receipts over $63 million so far in FY24.

• 77% of FY24 sales plan volume either sold or in process.

• Trending at 100% of three-year average for timber harvest receipts.

• Spring break-up started earlier, affecting harvesting.

• Lumber prices stable, interest rates slightly dropping.

  Industry costs up, influencing stumpage prices.

• Home sales down, prices up due to low inventory, but with an uptick in new housing starts.

Leases & Permits

• Attachment: Trust Land – Leases and Permits

• Department issued 13 instruments in February, no real estate transactions closed.

• Non-timber revenue ahead of projections by end of February, on track to exceed targets by fiscal year-end.

• Communication sites projections ahead due to new system categorization, to be fully updated by fiscal year-end.

• Residential category ahead of projections due to higher appraisals.

• Minerals category ahead of projections due to premium bids, notably a recent bid of $550,000.

• Royalties ahead of three-year average at $1.8 million deposited into the permanent fund.

• 84% of royalties from sand and gravel.

Legislative Summary

• Attachment: Status Update - Legislative Summary

• Pending rules approved by both House and Senate committees.

• Exception: Components in Docket 2301 related to dredge and plaster mining operations in Idaho, section 051.01 rejected.

• Budget appropriations for natural resources signed into law, including FY25 appropriations for Department of Lands and EIB.

• House Bill 507 regarding GNA timber sales sent to Governor for signature.

• Senate Bill 1243 treating certain grazing leases akin to federal permits signed into law.

• Senate Bill 1279 regarding navigational encroachments passed both bodies.

• Senate Bill 1292 in House Resources and Conservation Committee, potentially unconstitutional.

• Senate Bill 1342 governing grazing leases on state lands, allowing leases up to 40 years.

• The Attorney General shared concerns about Senate Bill 1292:

  • Previously thought to be dead, but scheduled for hearing.

  • Likely unconstitutional due to conflicts with the state constitution.

  • Past conflicts between board and Attorney General sparked concerns.

  • Constitutional drafters intended Attorney General to represent Land Board.

  • Department of Lands created as instrumentality of Land Board.

  • Removing Attorney General from representing Department of Lands may be unconstitutional.

  • Potential for litigation if bill is passed.

Endowment Fund Investment Board

• Attachments:
  • EFIB Manager's Report
  • EFIB Investment Report

• February: Fund up 3.1%, fiscal year return at 8.3%.

• March: Equities up 9.4%, another 1.1% increase.

• Resilient economy, strong corporate profits, stable labor market, and robust consumer spending.

• Fed aims to lower inflation, targets 2%, currently at 3.2%.

• No expected rate reductions this week.

• Rebalanced portfolio, shifted $80 million from large cap stocks to fixed income.

• Question: What's the deal with Dodge and Cox?

  • Answer: Dodge and Cox is a global equity firm with a value-oriented approach. They have a lower weighting towards the US and are more focused on Asia and Europe. This allocation has led them to underperform slightly compared to the benchmark.

• Question: On the fiscal year to date manager returns, William and Blair and Dodge and Cox both didn't have any percentages reported. Why is that?

  • Answer: Since William and Blair and Dodge and Cox began after the fiscal year started, their returns won't be reported until next year. However, we track their conception-to-date performance, which is not annualized but counts towards their performance evaluation.

Consent Agenda

• Approved 5-0

Timber License Plate Fund

• Attachment: Timber License Plate Fund

• Jennifer Oakland presents annual proposal for timber license plate funds.

• Funds designated by legislature for education and reforestation.

• Proposal includes opinion leader tours.

• Request slightly higher than previous years but within available balance.

• Question: Is Matthew Perkins' funding request in addition to Jennifer's?

  • Answer: Yes, it is. It's $2000 for seedlings and other items.

• Clarification: Is that in addition to the $68?

  • Answer: Yes, it's in addition to the IFPC request. It's still significantly under the available balance.

• Confirmation: Adding another $2000 to the request.

Forest Legacy Program–MRC-JTO and East Dawson Easements

• Attachment: Forest Legacy Program–MRC-JTO and East Dawson Easements

• Projects aim to conserve forest lands for perpetual timber production.

• Funded by nationally competitive grants, with a 25% non-federal match required.

• Projects supported by landowners, Idaho Department of Fish and Game, and The Nature Conservancy.

• Conserves forested lands for timber production, water quality, wildlife habitat, and recreational opportunities.

• Properties total 1893 acres, located north of Kootenai River near Bonners Ferry.

• Connects vital checkerboard of forest lands, securing timber-producing lands and wildlife habitat.

• Molpus Woodlands Group, Jackson Timberlands, and Jamestown Forest Lands LLC seek to convey development rights via conservation easement.

• Projects have broad support from public and private entities, including Boundary County Commissioners.

• No known opposition to the easements.

• Projects offer substantial conservation and economic benefits to Idaho and Boundary County.

• Question: What did the Idaho Department of Fish and Game and The Nature Conservancy contribute?

  • Answer: They contributed funds to fill the gap between the preliminary and actual appraised values of the properties.

• Clarification: Who conducts the preliminary appraisal?

  • Answer: An appraiser is hired to conduct the preliminary appraisal as part of the grant request process.

• Confirmation: Fishing Game contributed $300,000, and The Nature Conservancy contributed $259,600.

• Comment: Bless their soul.

Regular Agenda

Approval to Proceed with Due Diligence for Saraceno Land Exchange

• Attachment: Approval to Proceed with Due Diligence for Saraceno Land Exchange

• Approved 5-0

• In January 2024, the Department received an application for a land exchange from Don and Kerry Saracino.

• The proposed exchange involves approximately 240 acres of Saracino-owned timberlands in Clearwater County for about 120 acres of public school endowment land in Idaho County.

• The endowment land parcel is isolated, not contiguous to any other endowment or federally managed lands, last logged in 2021, and currently has a grazing lease in place.

• Saracino's land comprises two parcels: Floodwood (159 acres) and Fiddler (82 acres) in Clearwater County, both logged within the last eight years.

• The proposed exchange aims for an equal value swap, with a cash payment to balance if necessary.

• Benefits include potential higher returns for Saracino's land and enhancement of endowment land management.

• Due diligence processes involve neighbor notification, discussions with county commissioners, title reports, environmental assessments, appraisal, and third-party review.

• The department recommends Land Board approval to proceed with due diligence.

• Question: Will the land exchange affect tax revenues in Idaho and Clearwater Counties?

  • Answer: The exchange involves acquiring holdings in Clearwater County, potentially leading to a shift in tax revenue.

• Question: Are there any pending projects in Clearwater County?
  • Answer: There are currently no pending projects in Clearwater County but there is openness to considering such projects.
• Question: Regarding the maps provided, do the easements indicated in Attachment 3 relate to the land exchange?
  • Answer: The easements do not pertain to the exchange.

Approval of West Latour Timber Sale with Clearcut Harvest Unit

• Attachment: Approval of West Latour Timber Sale with Clearcut Harvest Unit

• Approved: 5-0

• The West Latour timber sale is presented for consideration, requiring Land Board approval due to a clear cut exceeding 100 acres.

• Maps of the sale area are provided in attachments 1/2, located approximately 10 miles southwest of Cataldo, Idaho, within IDL ownership.

• Unit 3 of the proposed clear cut spans 124 acres and consists of climax species not expected to regenerate, necessitating harvesting to enhance resilience.

• The Department's track record in successful stand planting and adherence to forest management regulations support the sale's approval recommendation.

• Question: Is there any impact on the viewshed on this?

  • Answer: No, it's really low on the hillside and pretty hidden by the topography from other areas.

Information Agenda

2025 Grazing Lease Rate

• Attachment: 2025 Grazing Lease Rate

• Use of the 1993 formula approved by the landlord, which considers four indices to determine the value of endowment forage.

• The 2025 grazing rate is $7.93 per AUM, representing a 21% increase from the current rate.

• Factors contributing to the rate increase include rises in forage value and beef cattle prices.

• Explanation of the formula's provision for adjusting Sheep AUM rates based on land prices relative to beef cattle prices.

• Confirmation that current prices do not necessitate a reduction in Sheep AUM rates.

Executive Session

• None

Adjournment