Land Board Hearing Recap - September 16, 2025

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Land Board Hearing Recap

Tuesday, September 16, 2025

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

Department Report

Timber Sales Revenue

Attachment: Trust Land – Timber Sales
August sales: 8 auctions, 4 competitive;net value 32% above appraisal, 2 did not sell
353.8 MMBF were sold for $11.9 million, averaging $221.87 per thousand board feet.
September offering: 10 sales, 39.5 MMBF valued at $11.3M.
Under contract: 495 MMBF across 179 contracts, ~$148M value.
FY25 receipts: $22.5M to date, +$8.7M expected by Sept. end.
FY25 residual: 2.3 MMBF still in process.
FY26 program: ~86 MMBF sold/in process; 67% of cedar pole target.
Harvest receipts: 111% of 3-year avg; volume: 98% of avg.
Stumpage: trending down from tariffs, inflation, weak housing market.
Mortgage rates improving; Fed decision pending.
August 6-month stumpage avg: ~$100/MBF higher than 2024.

Leases & Permits

Attachment: Trust Land – Leases and Permits
August 11 instruments issued: leases, assignments, including 6 land use permits.
No real estate transactions in August, but 5 cottage sites sold for $7.1M at Priest Lake; closings expected this month and will appear in next report.
Leasing revenue: significantly ahead of projections for first 2 months of Fiscal Year.
- Late crop land lease payments not in FY26 forecast.
- 3 unanticipated right-of-way permits on rangeland.
- Premium bid from Solar lease auction in commercial energy.
- Early payment from military base lease.
Revenue tracking ahead of 3-year average.
Permanent Fund: ~$600,000 in revenue deposited since Jan. 1.

Fire Season Update

Attachment: Fire Season Update

Suppression costs as of 9/10: Estimated at $45.2M; ~$8M reimbursable, leaving ~$37.2M obligation. Includes contract aircraft and engines.
Major fire: Sunset Fire (near Coeur d’Alene) burned ~3,200 acres; required Northern Rockies Type 2 IMT; now 100% contained and back to district management.
Fire activity: 343 fires burning ~4,700 acres compared to 20-year avg. of 271 fires/25,000 acres — more ignitions but far fewer acres burned.
Statewide acres burned: ~171,000 acres this season (all ownerships).
Conditions: Drought persists; Sept. forecast calls for average fire potential, slightly warmer temps, and near-normal precipitation. Stage 1 restrictions in parts of south-central Idaho.
Other notable fire: Rock Fire (near Tamarack), ~2,800 acres, 92% contained.
Reconciliation: Fire costs may take 2–3 years to reconcile with federal partners; estimates will be refined in fall.
Recognition: Strong firefighter performance credited for limiting acreage burned through aggressive initial attack.
Next steps: Final fire season updates expected in October.
Board shared appreciation for hard work on the ground it shows with number of fires up, but the acreage down.

Endowment Fund Investment Board

Attachments:
- EFIB Manager's Report
- EFIB Investment Report
August portfolio solid performance: up 2%.
Fiscal year-to-date performance: 2.4%, through yesterday up 4.5%
Gains driven largely by corporate earnings in technology sector, significant AI infrastructure investments and Chips Act (e.g., Micron).
Anticipation of interest rate cuts also boosting returns.
Portfolio manager Barrow Hanley performing better this year; some underperformance last year now corrected (up14.5% through yesterday).
Board comfortable with current portfolio positioning despite potential rate adjustments.

Consent Agenda

Approved 5-0

August 6, 2025 Live Auction, Grazing Lease G700347

Attachment:August 6, 2025 Live Auction, Grazing Lease G700347
August grazing lease auction: 1164 acres offered, 116 AUMS.
3 applicants participated.
Auction received 13 bids; high bid was $4,500 from Gerald Martens (original lessee).
Process followed statutes and procedures; no signs of collusion observed.
All participants notified of 20-day appeal window; no appeals filed.
Department requests approval to award lease GR70000678, to Gerald Martens.

Regular Agenda

FY2027 Department of Lands Budget

Attachment:FY2027 Department of Lands Budget

Approved 4-0, Governor Abstains

FY27 budget request presented following submission deadline (Aug. 29).
Maintenance budget developed per DFM guidelines:
- 1% employee compensation placeholder.
- 25% variable benefit rate.
- $17,770 health benefits per FTE.
Includes standard contracts and replacement items; no new full-time positions.
Minor revision line item 5: transfer to Nav Waters Fund reduced by $300.
Overall request is 0.6% higher than FY26 original appropriation.

August 5, 2025 Live Auction and Approval of Solar Lease M600110

Attachment: August 5, 2025 Live Auction and Approval of Solar Lease M600110
Approved 4-1
Project details: Solar lease M600110 covers ~5,200 acres of marginal grazing land, ~14 miles SE of Boise. Lessee: DE Shaw Renewable Investments (Desri). Planned 250 MW solar facility with battery storage.
Revenue potential:
- Development phase: $52K commencement fee and $156K annually.
- Construction: ~$375K annually.
- Full operation: $4–5M annually (vs. $5K from current grazing lease).
- Could raise overall leasing revenue by ~40%.
Auction: Publicly advertised; 3 participants; winning bid $215K by Desri (original applicant).
- Process followed statutes and procedures; no signs of collusion observed.
- All participants notified of 20-day appeal window; no appeals filed.
Lease structure: Rent = higher of $1,000/acre or % of power purchase agreement revenue. Minimum estimated production rent: ~$5.2M annually.
Grazing lease impact: Existing lease runs to 2032; ~60% (about 600 AUMs) affected. Lessee notified multiple times.
Permitting: Developer must secure Ada County approvals; current planning/zoning under review but site not classified as prime farmland.

Leasing: Minimum Annual Rent and Assignment Fee Increases

Attachment: Leasing: Minimum Annual Rent and Assignment Fee Increases
Died for a lack of a motion
Background: Minimum annual rent and assignment fees for leases have not been updated since 1971 (rent) and 2009 (fees). Current rates don’t reflect administrative costs.
Proposal:
- Raise minimum annual rent from $50 to $300 (excludes oil and gas leases, set separately).
- Increase assignment fees from $25 to $200.
Rationale: Current fees underfund lease administration; increases align costs with program operations and long-term trust returns.
Impact: Applies to 166 grazing leases, 77 mineral leases and 3 crop eases.
Implementation: Lessees will receive 180-day advance notice before billing reflects new rates.

Approval of FY2026 Timber Sales with Clearcut Harvest Units: Bald Larch, Found It 40, Builda Burma, Divided Cedar

Attachment: Approval of FY2026 Timber Sales with Clearcut Harvest Units: Bald Larch, Found It 40, Builda Burma, Divided Cedar
Approved: 5-0
FY26 timber sale update: 4 clear-cut harvest units over 100 acres require Land Board approval.
One in Mica Bald Larch, three in St. Joe Area: Found It 40 , Builda Burma and Divided Cedar.
Harvest prescriptions were updated to improve regeneration and reduce logging costs, boosting endowment returns.
Thoroughly reviewed to ensure sales are both silviculturally and economically justified.
The sales are either, surrounded by private industrial timberlands, far from population centers, and are not in visually sensitive areas.

Saraceno Land Exchange

Attachment: Saraceno Land Exchange
Approved: 5-0
Exchange details:
- Saracenos: 241 acres of timberlands (Floodwood: 159 acres; Fidler: 82 acres). Clearwater County
- Endowment: 120 acres of isolated Public School endowment land, 9 miles NE of Kamiah. Idaho County
Endowment parcel was logged in 2021, appraised at $361,500, best use = rural/recreational/development; currently leased for grazing by the Saracenos.
Saraceno parcels are appraised at $361,600, best use = timber production/recreation; both parcels are contiguous with large blocks of existing endowment timberlands (27,000 acres at Floodwood, 33,670 acres at Weippe). No leases.
$100 difference in favor of Saraceno, to be paid from Land Bank Funds at closing.
Benefits include increased timber revenue potential, consolidates endowment lands, eliminates inholdings, improves management efficiency.

Adoption of Pending Rule IDAPA 20.03.08, Easements on State-Owned Lands

Attachment: Adoption of Pending Rule IDAPA 20.03.08, Easements on State-Owned Lands
Approved: 5-0
Scheduled for repeal/replacement in 2025; review in 2026 legislative session.
Three public meetings held; two comments received during initial comment period.
Proposed rule published Aug. 6 Administrative Bulletin; additional 21-day comment period saw no new comments or hearing requests.

Information Agenda

FY2025 Gross Revenue Record

Attachment: FY2025 Gross Revenue Record
Record revenues: FY25 gross endowment land receipts reached $91.7M, surpassing the previous $89.5M record set in 2014.
Unlike 2014 (boosted by salvage sales and oil/gas lease premiums), FY25 growth reflects sustainable management and portfolio diversification.
Several items contributed to this success:

- Endowment timber:
  - Updated Forest Asset Management Plan ensures sustainable harvests of ~330 MMBF for the next 10–20 years.
  - Delivered log sale program launched, boosting competition and returns.
  - Efficiency gains through mapping, remote sensing, and staff reallocation.
  - Increased forest investments: early site treatments, genetically improved seed, and intensive management to secure long-term productivity.

- Endowment leasing:

- - Stronger commercial ground leasing policies implemented.
  - Early interest seen in retail and energy leases.
  - Diversifies income streams and offsets revenue losses from divested cottage sites and commercial buildings.

Success is attributed to IDL staff dedication, Land Board leadership, and Endowment Fund Investment Board’s investment strategy.
FY25 milestone reinforces reforms and stewardship practices that build lasting value for future generations.

Cottage Site Leasing and Disposition Update

Attachment:Cottage Site Leasing and Disposition Update
Background: Cottage site leasing on endowment trust land dates to early 1900s; lessees lease land but own structures (split estate).
Land Board directive (2010): Unify split estates through Voluntary Auction for Ownership (VAFO) or Unleased Land Auction (ULA).
Results since 2013: 503 lots sold (450 VAFO, 53 ULA) — 342 at Priest Lake, 161 at Payette Lake — generating ~$280M reinvested, transferred to Permanent Fund, or placed in Land Bank.
Current leases:
- Priest Lake: 17 active (4 on 15-year, 2 on 10-year, 11 on 5-year terms).
- Payette Lake: 13 active (4 on 15-year, 1 on 10-year, 8 on 5-year terms).
Reinvestment: ~$100M reinvested in 54,000 acres of timberland and permanent access; $144M transferred to Permanent Fund; ~$85M remains in Land Bank.
Outcomes: Staggered dispositions increased investment income, supported steady reinvestment in timberlands and land access, and produced greater long-term returns for beneficiaries than continued leasing alone.
Secretary of State's Concerns
- Context: 2022 decision (before current Superintendent & AG joined) was meant to run 2022–2024, but remains in effect in 2025.
- Land value appreciation not fully captured
- Most proceeds went to EFIB rather than acquiring new land as originally intended.
- Market conditions have shifted, limiting acquisition opportunities and reducing alignment with original goals.
- Holding high-value land without capturing appreciation risks underperformance for beneficiaries.
- Transparency is essential — Board should openly weigh pros and cons and reconsider leasing/disposition options.
- Program is nearly complete; few cottage sites remain under lease.
- Political tensions that shaped past conflicts have eased
Jim Elbin's responses
- Old lease model created conflict — disputes over whether land or improvements were appraised too high/low.
- Leasing staff are already incorporating appreciation where possible, though residential models are limited.
- Current framework ensures proceeds are still supporting beneficiaries through EFIB and reinvestment.
- Provides consistency with prior Board direction and avoids reopening sensitive, litigated issues.

Executive Session

None

Adjournment

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