Land Board Hearing Recap - May 21, 2024

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Land Board Hearing Recap

Tuesday, May 21, 2024

All Board members were present
Review the Final Agenda
Download the Meeting Materials
Item 2 Endowment Fund Investment Board and Item 1 Department Report were swapped.
Item 7 Endowment Land Energy Leasing Policy was held until June.

Recognition of IDL employees

Special recognition for outstanding employees
Criteria for consideration: service and job performance exceeding normal expectations
Alignment with IDL values: stewardship, service, accountability, cohesiveness, quality contributions
Overall Employee of the Year chosen
Executive team faces difficulty due to many deserving candidates
Appreciation for all IDL employees

Laurie Stone

Commitment to Service recipient
Lands Resource Specialist in forestry over in Eastern Idaho
Exemplifies "above and beyond" mentality
Effective in leveraging relationships for solutions
Ensures smooth timber sales
Turns down fire assignments if a timber sale needs attention

Robert Funk

Stewardship Award recipient
Lands Resource Specialist for forestry at Priest Lake
Exceptional commitment to endowment and land management stewardship
Demonstrates profound understanding of balance in endowment management
Approaches responsibilities with integrity and alignment to organizational goals
Takes ownership of decisions and actively seeks feedback for continuous improvement
Fosters a culture of transparency and trust within IDL

Marte Meredith

Accountability Award recipient
Fire Cache Returns and Refurbish Lead at Coeur d'Alene Fire Cache
Demonstrates unwavering dedication, professionalism, and passion for customer service
Leadership extends beyond daily responsibilities, offering guidance and support to teammates
Leads by example in patient communication and accountability

Alice St Pierre

Quality Contributions Award recipient
Administrative Assistant in Sandpoint and the Kootenay Valley
Demonstrates willingness to take on any task with positivity and adaptability
Sees challenges as opportunities for solutions
Positive impact on the entire department
Acknowledges the hard work of others and promotes a one-team ethos

Tyre Holfeltz

Cohesiveness Award recipient
Program Manager for Fire Prevention and Risk Mitigation in Coeur d’Alene
Demonstrates passion for program and protecting Idaho's natural resources
Devotion evident in decision-making and actions
Proactively seeks ways to maximize resources and secure funding
Promotes collaboration with new partners and opportunities

Ed Wingert

Overall Employee of the Year
GNA Program Manager in Priest Lake
Leadership increases pace and scale of forest restoration on federal lands in Idaho
Achieved outstanding results in 2023, nearly doubling previous year's output
Positive reflection on department and recognized by customers, partners, and staff
Demonstrates service, passion, dedication, and embodiment of organizational values

Endowment Fund Investment Board

Attachments:

Board Members present: Tom Wolford (Chair), Joe Forney, Kenny Wroten, Mary Pat Thompson, Chuck Winder, Robert Donaldson, Brian Yeargain and Chris Antone
Staff members presented: Chris Halvorson, Kathy Van Vector

Monthly Performance Summary:
- Financial markets rallied in December as inflation moderated.
- Fed indicated potential interest rate cuts in 2024.
- Inflation was flat to modestly higher in the first three months of the year.
- Markets sold off in April due to concerns about inflation.
- Portfolio was down 3.3% during the month, up 7.5% fiscal year to date.
- May saw signs of inflation moderating, leading to a rebound.
- Currently up 11.7% fiscal year to date.
- Real Estate Performance:
- Core real estate market declined 7 consecutive quarters.
- Anticipated bottoming out during the first quarter.
- DWS fund was down 0.03%, Core Partners fund down 0.65% for the quarter.
- Reporting delays due to flash reports.
Semi-Annual Report Highlights:
- Total assets overseen by the board: $4.3 billion as of April.
- Investment return: 7.5% for the first ten months.
- Earnings reserves close to target.
- Beneficiary distributions trended steady and growing.
- Oversight of the school bond credit enhancement program.
Discussion:
- Distribution formula for public schools complexity and implications.

Department Report

Timber

Attachment: Trust Land – Timber Sales
Department of Land sold two endowment sales at auction in April, with competitive bidding.
Two endowment sales did not sell at auction and will be reevaluated for a second auction.
Net sale value of the sales represented a 42% bid over the appraised value.
9.5 million board feet of volume sold in April for nearly $2.6 million, averaging $269.52 per thousand board feet.
In May, timber valued at just over $8 million.
Current volume under contract is 519 million board feet, with 149 active contracts valued at $148 million.
Current volume under contract's average price is beating the three-year average price.
Timber harvest receipts for the fiscal year so far total nearly $66.6 million.
89% of the volume offered this fiscal year is either sold or processed, meeting the target of 524 million board feet of volume.
Timber sale receipts are expected to land just over the target by the end of the fiscal year.
Timber harvest volume sits at 101% of the three-year average.
Comparison graph shows the slight tick in new construction but uncertainty remains due to high interest rates and housing starts.
Log yards influenced downward pressure on prices willing to pay.

Leases & Permits

Attachment: Trust Land – Leases and Permits
Department issued A10 instruments in April, nine of which were land use permits.
Non-timber revenue ahead of projections as of end of April, at about $6.8 million.
On track to meet or exceed revenue targets with additional expected revenue in certain categories.
Currently ahead of the three-year average for non-timber revenue by $3.1 million, mostly from sand and gravel leases.
Commercial military facilities' income lumped into communication sites category due to new accounting system.
Income is in a different pool, showing as unreceived due to labeling changes in the system.

Pre-Season Fire Brief

Attachment: Status Update - Pre-Season Fire Brief
Pre-fire season briefing overview provided.
Significant fire potential outlook for May and June predicted to be normal.
Above-average fire potential expected in July and August, especially in the north.
17 fires for a total of 10.3 acres as of May 2, mostly due to debris and grass burning fires.
Resources sent to Michigan and Virginia to assist with fires.
Exclusive use contract turnover with Helicon Tech leadership in progress, no Helitech crew to be hired this year.
Fire zone managers in place to cover the state.
Negotiations ongoing for additional fire service and equipment.
Fire district establishment in Eastern Idaho in progress.
Hiring of seasonal crew planned for 2025.
Recruitment ongoing for vacant resource foreman positions.
40-60% of engines to be staffed with seasonal staff and resource foreman during fire season.
Impact of federal pay increases discussed, concerns about sustainability raised.
Appreciation expressed for firefighter bonuses in the budget.
Boot policy implemented to provide boots for firefighting staff.
Staffing levels across jurisdictions discussed, aiming for 100% coverage.

Consent Agenda

Approved 5-0

Disclaimer of Interest DI600317–Hall and Sons LLC, Boise River

Attachment: Disclaimer of Interest DI600317–Hall and Sons LLC, Boise River
Application for parcels totaling over 28 acres located on the South Bank of the Boise River.
Easement grant to the State of Idaho for 0.068 acres.
Parcels owned by Holland Sons surrounding the disclaimed parcel.
Purpose of the disclaimer to clarify title and relinquish interest to where the river is currently located.
Discussion clarifying the purpose of the action and the legal implications.

Results of April 24, 2024 Mineral Lease Live Auction

Attachment: Results of April 24, 2024 Mineral Lease Live Auction
Department held auction for mineral lease on April 24.
Lease for 140 acres of sand, gravel, and basalt near Hazleton.
Minimum annual rate set at $2.01 per short ton.
Premier LLC offered the highest bid of $170,000.
Department recommends awarding the lease to Premier LLC.

Regular Agenda

Commercial Real Estate Advisor

Attachment: Commercial Real Estate Advisory
Approved: 5-0
Role of commercial real estate advisor established in 2015.
Recommendations from Callan included obtaining expert guidance for management and disposition of commercial real estate assets.
RFP issued for commercial real estate advisor, responses reviewed, and firms interviewed.
Investment subcommittee voted to recommend Heartland LLC as commercial real estate advisor.
Contract with Heartland LLC recommended by the investment subcommittee.
No known connection between Heartland LLC and other firms.
Heartland LLC's response to RFP deemed more robust and better suited to address land board needs.
Controller confirms no issues with contracting Heartland LLC.
Recommendation to authorize contract with Heartland LLC for commercial real estate advisory services.

Endowment Land Energy Leasing Policy

Attachment: Endowment Land Energy Leasing Policy
Held until June meeting

Information Agenda

Proposed Rule IDAPA 20.04.01, Rules Pertaining to Forest Fire Protection

Attachment: Proposed Rule IDAPA 20.04.01, Rules Pertaining to Forest Fire Protection

Proposed Rule IDAPA 20.04.01 pertains to forest fire protection.
Identifies persons responsible for staffing forest protective districts and equipment use.
Provides rules for entering into fire protection agreements with other entities.
Rulemaking process began in August 2023, approved by State Board of Land Commissioners.
Outreach included web postings, social media announcements, email notifications.
Two public negotiated rulemaking meetings held, with three and 20 participants respectively.
Written comments received from Potlatch Deltic, Associated Logging Contractors Inc., Department of Environmental Quality.
Draft rule text included in attachment for publication in Administrative Bulletin as proposed rule.
Proposed rule open for public comment until July 3, 2024.
Department to present rule to Land Board for adoption and review by 2025 Idaho Legislature.

Proposed Rule IDAPA 20.04.02, Rules Pertaining to the Idaho Forestry Act and Fire Hazard Reduction Laws

Attachment: Proposed Rule IDAPA 20.04.02, Rules Pertaining to the Idaho Forestry Act and Fire Hazard Reduction Laws
Proposed Rule IDAPA 20.04.02 pertains to the Idaho Forestry Act and fire hazard reduction laws.
Aims to establish a consistent process for completing hazard reduction efforts.
Scheduled for repeal and replacement in 2024, for review in the 2025 Legislative session.
Negotiated rulemaking process involved outreach via social media, email notifications, and web postings.
Public meetings held in October 2023, with participation options for in-person or virtual attendance.
No public comments received during the meetings, but written comments were submitted by Potlatch Deltic Quality, and Riley Stagner and Associates.
All comments addressed with changes to the rule text consistent with statutes and department regulations.
Draft text to be submitted for publication in the Administrative Bulletin as a proposed rule.
Proposed rule open for public comment until July 3, 2024.
Department to present the rule to the Land Board for adoption and review by the 2025 Idaho Legislature.

Department of Lands' Legal Staffing Process

Attachment: Department of Lands' Legal Staffing Process
Legislative funding through Senate Bill 1292 repealed and amended Idaho Code 58-120, allowing for hiring attorneys by the Department of Lands, subject to approval.
Funding allocated for one lead attorney and one attorney to handle legal business with the Attorney General.
Transition period anticipated before legal staff is fully available.
Department coordinating with the Attorney General's office for support during the transition.
Recruitment ongoing for lead attorney, with final candidates expected to be presented at the June Land Board meeting.
Lead attorney's role is to provide legal counsel to the Department of Lands, with oversight from the Land Board.
Attorney General's office to provide ongoing support beyond the transition period if needed.
Department to engage with the Land Board members for input and approval during the hiring process.
Statutory draft allows for contracting legal services if necessary before the start of the fiscal year.
Department aims to have legal assistance in place as soon as possible to address departmental legal issues and support the Land Board's decisions.

Executive Session

None

Adjournment

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