Having trouble viewing this email? View it as a Web page.

Land Board Hearing Recap

Tuesday, February 18, 2024

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

Department Report

Timber

• Attachment: Trust Land – Timber Sales

• January Timber Sales

  • 6 endowment sales auctioned, all competitively bid
  • 36% increase over appraised values, generating $2.2 million in additional revenue
  • 23.5 MBF sold for nearly $8.3 million ($352.46 per thousand board feet)
  • GNA sale in Idaho Panhandle National Forest saw 84% increase, adding $1.3 million

• February Timber Sales

  • 7 sales totaling 13.3 MBF at $2.6 million
  • Includes one GNA sale

• Current Contracts & Fiscal Year Update

  • 465 MBF under contract across 161 active contracts worth $132.7 million
  • FY-to-date timber sale receipts at $58.3 million, with projected February income of $8.7 million
  • FY25 timber sale program at 174.6 MBF, 93% completion of cedar pool target

• Market Trends & Economic Factors

  • Timber harvest receipts exceed 3-year average (105%); harvested volume at 96%
  • Stumpage price trends show slight improvement despite economic pressures
  • Factors influencing market: high interest rates, inflation, slower housing starts, logging costs

• Unsold Timber Sale & Future Actions

  • One endowment sale failed to sell after three attempts
  • Industry feedback: sale too small for required road development, logging costs not favorable
  • Options: reevaluate sale, expand into future sales, or offer as non-competitive direct sale

• Subscription Cost-Saving Decision

  • Inland composite lumber price data removed from reports due to high subscription cost
  • Alternative data sources will be used

• Stumpage Price Fluctuations

  • Caused by factors like sale complexity, logging operations, distance to market, and other market conditions

• Clarification on Non-Competitive Sales

  • No direct non-competitive sales for this type of timber
  • Option for salvage sales with lower minimums but still requiring competition

• Attachment: Trust Land – Leases and Permits

• 24 instruments issued in January, including leases, lease assignments, and land use permits.
• One easement granted.
• Non-timber revenue: Lease revenue categories fluctuate, but overall revenue projections remain on track.
• Permanent Fund revenue & royalties:
  • $1.4 million deposited into the Permanent Fund.
  • Tracking slightly below average.
  • Majority of income from sand and gravel operations.

Land Bank Aging Report

• Attachment:Land Bank Aging Report
• Current Land Bank balance: $85.5 million, including interest.
• Recent deposits: $16.2 million added in Q2 of FY25.
• Upcoming expirations: $8.2 million set to expire in early FY26.
• Acquisition plans:
  • Evaluating timberland investments and other opportunities.
  • Succeeded Orchard remains a priority.
• Legislative considerations:
  • Five-year deadline for fund use before transfer to the Permanent Fund.
  • Land Board can transfer funds to the Permanent Fund at any time.
• Project pipeline:
  • No specifics provided, but acquisitions are under evaluation.
  • Future updates will offer more details on potential projects.

Legislative Summary

• Attachment:Legislative Summary
• Rule Dockets & Hearings
  • House hearing held last week, included agency updates.
  • Not all rules covered, rescheduled for House Resources Committee tomorrow.
  • Senate Resources Committee hearing on February 26th.
• Budget Hearings
  • Department of Lands & EFIB budget hearing: February 11th before Joint Finance and Appropriations Committee.
  • Budget setting hearing date TBD.
• Key Legislation Being Tracked
  • House Bill 129 (Land Bank Funds Extension)
    • Extends use of land bank funds from 5 to 10 years.
    • Land Board still retains discretion to transfer funds to the Permanent Fund anytime.
  • Senate Bill 1062 (Recreational Lease Regulations in Island Park)
    • Mandates notice to county commissioners for state land use agreements.
    • Requires compliance with local planning & zoning for certain commercial leases/permits.
    • Concerns over exemptions for conservation & mineral leases, ongoing discussions with bill sponsors.
  • House Bill 17 (Wildfire Risk Mitigation & Insurance Stability)
    • Response to increasing wildfire threats and loss of home insurance coverage.
    • Creates a wildfire risk mitigation & stabilization pool and oversight board.
    • Provides grants for home hardening projects.
    • Focus on non-general fund sources for insurance market stabilization.

These bills and rule changes are being closely monitored with ongoing discussions and adjustments.

Resource Protection & Assistance Report

• Attachment:Resource Protection & Assistance Report
• Navigable Waterways Program
  • Administers encroachment permits, submerged land leases, easements, and disclaimers.
  • 68 temporary permits granted to boat garage owners at Heyburn State Park to comply with relocation deadline.
  • $425,000 generated in first half of FY25; dedicated fund exceeds $2 million.
• Regulatory Minerals Program

  • Perpetua Resources (Stibnite Mine, Valley County)

    • Reviewing two application submittals (closure plan & reclamation cost estimate).
    • Third-party contractor Stantec assisting with cost estimate review.
    • Agency review period ends April 1, 2025.

  • Thompson Creek Molybdenum Mine (Custer County)

    • Phase 8 reclamation plan approved (Dec. 2024).
    • Mining and mill operations to restart in Q1 2025.
    • Extends mine life by 4–5 years.

  • Integra Resources (Owyhee County)

    • BLM issued Completeness Letter (April 2024) confirming baseline characterization.
    • IDL engaged in agency meetings and technical review.

  • Liberty Gold Black Pine Mine (Cassia County)

    • Early mine planning phase; coordinating with federal/state agencies.
    • MOU signed with USFS, BLM, and IDEQ.
    • Mine Plan of Operations expected Q4 2025.

  • General Mining Oversight

    • 1,580 mines under reclamation plans; 26 under dredging permits.
    • Bonding available via traditional methods or Bond Insurance Fund.
• Abandoned Mine Lands (AML) Program
  • Funded by 34% of a 1% mining license tax.
  • First half of FY25 revenue: $7,180.
  • Nearly 9,000 abandoned mines require closure.
  • House Bill 226 proposes increasing AML funding by adjusting mine license tax distribution from 66% (General Fund) / 34% (AML) to 50%/50%.
• Federal Policy Impact on State Mining Operations
  • Potential federal policy changes could impact state mining operations.
  • Interior Secretary focused on expediting mine permitting processes.

Endowment Fund Investment Board

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

• Market Performance & Inflation Impact

  • Portfolio was down ~3% last month due to stalled inflation progress (~3% vs. 2% target).
  • Feds cut interest rates to 5.25% in December; market sentiment improved.
  • Portfolio rebounded 3% in the month, now up 6.3% FYTD, and 7.5% through Friday.

• Market Volatility & Policy Impacts

  • Tariffs Announcement: Initial 25% on Canada/Mexico, 60% on China; later postponed amid negotiations.
  • Chinese AI Company (Deep Seek):
    • Became most downloaded AI app, exceeding TV app downloads.
    • Performed well despite using older-generation chips, raising concerns over U.S. chip export restrictions.
    • AI stock recovery observed; potential cost reduction could boost adoption & market demand.

• Investment Management & Board Updates

  • Completed transition from Western Asset Management (fixed income).
  • Clearwater Advisors hired for a portion of the State Insurance Fund portfolio (not yet used in Endowment Fund).
  • New board members (Senator Jim Woodward, Representative James Petzke) attended their first meeting.

• Overall Outlook

  • Positive momentum in the market with strong portfolio growth.
  • Well-reserved position moving into the second half of the fiscal year.

Consent Agenda

• Approved - 5-0

December 18, 2024 Live Auction, Mineral Lease E700065

• Attachment: December 18, 2024 Live Auction, Mineral Lease E700065

Regular Agenda

Land Acquisition for Idaho Division of Veterans Services (IDVS)

• Attachment: Land Acquisition for Idaho Division of Veterans Services (IDVS)
• Approved: 5-0

• Purpose:

  • Purchase 15.5 acres from Dry Creek Cemetery for the Boise Veterans Cemetery expansion.
  • Without expansion, available burial space will be exhausted in ~8 years.

• Funding & Approval:

  • $3.95 million allocated from general funds in the last legislative session.
  • Legislature approved the purchase as part of the Division of Veterans Services' budget.

• Location:

  • Lower level, east of the existing cemetery.
  • Upper hilly land not suitable for burial requirements.

• Outcome:

  • The purchase was approved by the Land Board.
  • Expansion ensures continued burials for ~40 years.

Land Board Support Letter to JFAC–Funding Fire Suppression Deficiency Fund

• Attachment: Land Board Support Letter to JFAC–Funding Fire Suppression Deficiency Fund
• Approved 5-0

• Budget Request Overview:

  • Focus on funding for Wildland Fire Program.
  • Requested $100 million in the Fire Fund for proactive fire response and satellite fire detection.
  • Fire Protection services funding is critical for rapid response to wildfires.

• Key Budget Details:

  • The Governor’s budget recommendations align with the agency’s strategic plan.
  • Proposal to support IDL Wildland Fire activities, including recruitment and retention of firefighters.
  • Letter of support requested from the Land Board to send to the Joint Finance and Appropriations Committee.

• Costs of Fire Suppression:

  • Fire suppression cost for FY25: approximately $55 million.
  • The Forest Service spent about $300 million in 2024 for wildfire suppression.
  • State-managed lands are more cost-effective for fire suppression due to better land management (e.g., timber sales, controlled fuel loading).

• Fund Balance and Budget Proposal:

  • Current fund balance for fire suppression: $35 million, with obligations reducing available funds for FY26.
  • Proposed budget: Increase to $50-54 million to cover costs and avoid funding shortfalls.

• Approval:

  • Motion to approve the support letter and budget recommendations passed with unanimous approval.

Information Agenda

Modernizing Wildland Fire Operations Facilities

• Attachment: Modernizing Wildland Fire Operations Facilities

• Purpose of the Presentation:

  • Discuss department’s fire suppression facilities and infrastructure needs due to growing wildfire challenges.
  • Current facilities are insufficient for the increasing size, frequency, and complexity of fires in Idaho.

• Key Challenges Identified:

  • Fire seasons are becoming longer, with larger, more frequent fires.
  • Existing facilities are outdated and unable to support expanding fire operations and resources.
  • Strategic goal: Build adaptive infrastructure to address growing fire response needs.

• Proposed Solution:

  • Construct scalable, pre-engineered buildings to support fire operations in high-need districts.
  • A prototype facility is under construction at St. Mary's office.
  • Facilities will be designed to meet specific district needs while reducing construction costs.

• Identified High-Need Areas:

  • Focus on districts with the greatest fire response challenges, including Salmon River Canyon, Ponderosa, Boise, Kamiah, Sandpoint, and Coeur d'Alene.

• Three Alternatives for Facility Construction:

  1. Public Building Fund: Continue applying for capital improvement funds (limited funds and competition).
  2. Direct Appropriation: Seek direct funding for facilities, but may require multiple years of funding and legislative conferences.
  3. Partner with Idaho State Building Authority (ISBA):
     • ISBA issues tax-free bonds, handles project administration.
     • Building leased back to the department after completion until bonds are paid off.

• Next Steps:

  • Determine the full scope of facility needs.
  • Cost analysis and discussions with fire protective associations.
  • Legal analysis for moving forward with funding options.

• Timeline and Process:

  • Likely to seek concurrent resolution in the next legislative session, but it’s a tight timeline.
  • The process may take multiple years, requiring collaboration with the legislature.

• Action Items:

  • Presentation slides to be emailed to members.
  • Continue discussions with legislators and fire associations for support.

Executive Session

• None

Adjournment