Idl.idaho.gov WORKING LANDS, TRUSTED STEWARDS 2019 .

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www.idl.idaho.govIDAHO DEPARTMENT OF LANDS300 North 6th Street, Suite 103, Boise, Idaho 83702P.O. Box 83720, Boise, Idaho 83720-0050Copyright 2019 Idaho Department of Lands. All rights reserved.Cover Photo: Sheep grazing on Packer John Mountain in Boise County near Smiths FerryWORKING LANDS, TRUSTED STEWARDS2019 ANNUAL REPORT

IDL - 2019 ANNUAL REPORT02Regulating and providing assistance to uphold the protection of ournatural resources through implementation of laws such as the ForestPractices Act, the Lake Protection Act, and the Abandoned MineReclamation Act; Providing fire protection on more than 6 million acres of private, state,and federal lands in Idaho.Part of the Shared Stewardship goal is to double the number of acres treatedon federal forests in Idaho by 2025. Partners will begin by focusing on the6.1 million acres that have been federally designated as at risk of loss dueto insect and disease infestation. Shared Stewardship will enable us to worktogether and across a larger landscape to address the problem through thepower of partnership.These major emphasis areas form the bedrock for IDL’s success. Our missionand the work our employees do daily make a difference for the citizens ofIdaho. Even more impressive is that we are now leveraging our expertiseto help our federal partners and other stakeholders manage our state’snatural resource landscape. The most prominent example of this is the GoodNeighbor Authority (GNA), a program granted under the 2014 Farm Bill.The success of what we do for the endowments and the success of GNAand Shared Stewardship would not be achievable without the work of IDLemployees. Our skilled team of endowment foresters, private forestryspecialists, lands resource specialists, wildland firefighters, and our criticalsupport staff is what makes IDL a premier natural resource managementagency.IDL has worked with the U.S. Forest Service (Forest Service) through GNAfor the past four years. We recognize there is a forest health crisis and noone agency can tackle the issue on its own. Using IDL expertise, manpower,and state contracting procedures, we have seen an increase in timber saleson federal lands, prominently in areas threatened by insects and wildfire.In addition to the increase in harvest, GNA is also increasing the pace andscale of restoration of federal forests and rangelands. Revenues generatedfrom timber sales offset costs incurred by the state, and fund additionalmanagement activities such as reforestation, environmental planning,habitat improvements, and road and trail maintenance.As we move into another year together, we will remain focused on our greatmission. This focus is essential to deliver change and improvement on thescale needed within our communities. I thank every employee for theirdedication to the mission and for carrying out their duties with pride andprofessionalism. I am honored to be a part of this team, and I look forward totackling more challenges and celebrating additional success in the comingyear.DUSTIN T. MILLER Director01 MESSAGE FROM THE DIRECTOR03 PHILOSOPHY IDL ORGANIZATIONAL STRUCTURE04 LAND OWNERSHIP OFFICE LOCATIONS OWNERSHIP BREAKDOWN05 IDAHO STATE BOARD OF LAND COMMISSIONERS06 ENDOWMENT FUND INVESTMENT BOARD07 THE ENDOWMENT BENEFICIARIES08 2019 IDL SNAPSHOT EXECUTIVE LEADERSHIP09 DEPARTMENT SUPPORT FUNCTIONS11 RECREATION OPPORTUNITIES2223242527LANDS & WATERWAYS12131415161819REAL ESTATE BUREAUENDOWMENT LEASINGGRAZING, AGRICULTURE & CONSERVATION LEASINGCOTTAGE SITE LEASINGMINERAL LEASING OIL & GAS LEASINGMINING REGULATION & ASSISTANCEPUBLIC TRUST LAND MANAGEMENTOGCC21 OIL & GAS CONSERVATION COMMISSIONIDAHO BOARD OF SCALING PRACTICESIDAHO GOOD NEIGHBOR AUTHORITYSHARED STEWARDSHIPFOREST MANAGEMENTFORESTRY ASSISTANCE & REGULATIONFIRE29 2019 FIRE SEASON30 FIRE MANAGEMENTACCOUNT STATEMENTS31 REVENUE & EXPENDITURES BY FUND TYPEPERMANENT FUND REVENUE BY ENDOWMENTAND ASSET CLASSLAND BANK REVENUE BY ENDOWMENT32 SURFACE ACRES BY ASSET CLASSLAND NET INCOME BY ASSET CLASSENDOWMENT LANDS AND FUND –FY19 VALUES & NET RETURNS33 ENDOWMENT TRUST LANDS INCOME STATEMENT35 ENDOWMENT FUND STATEMENT OF ACTIVITIES37 STRUCTURE OF IDAHO’S ENDOWMENT ASSETSENDOWMENT FUND GOVERNMENTAL BALANCESHEET & STATEMENT OF NET POSITIONACCOUNT STATEMENTS FORESTRYFIREGenerating revenue for public schools and other trust beneficiaries,while serving as stewards of our natural resources, to ensureendowment lands remain healthy and productive for decades to come;INTRODUCTIONFORESTRY We are taking these important partnershipseven further with a recently signed agreement toimplement “Shared Stewardship” and expand foresttreatment areas across ownership boundaries. Thisyear, IDL and the Forest Service chose two large-scaleproject areas in Idaho where federal, state, and private land managementactivities will align to reduce wildfire risk to communities, create and sustainjobs, and improve the health of Idaho’s forests and watersheds.TABLE OF CONTENTSOGCCIDL’s endowment mission is unique and distinct, and our duties include:Moreover, the Bureau of Land Management (BLM)recently became a GNA partner as well. Working withthe BLM and collaborative groups, IDL is assisting increating fuel breaks, wildlife habitat restoration, andother improvements on BLM rangelands.LANDS & WATERWAYSSince taking over as Director of the Idaho Department of Lands(IDL) a year ago, I continue to be impressed by the passion andenthusiasm of our employees. The dedication they show for themission of the agency, the endowment beneficiaries, and forthe stewardship of the land is inspiring. We have embraced ourvision of “Working Lands, Trusted Stewards,” and I am proud tobe a part of this amazing team.INTRODUCTIONMESSAGE FROM THE DIRECTOR

044OUR MISSIONStewardship by making decisions and takingactions that positively affect long-termfinancial returns for the trust beneficiariesand enhance the health and resilience ofIdaho’s natural resources.Service by providing exemplary service anddelivering programs with professionalismand integrity to both internal and externalcustomers.Cohesiveness by working as a unifiedorganization in which all employeesparticipate in constructive communicationto fully m eet our mission.Accountability by investing in and having anorganizational culture and framework thatequips, entrusts, and expects employees tomake decisions and get things done.GOVERNOROIL & GASCONSERVATIONCOMMISSIONLAND BOARDIDL ORGANIZATIONAL STRUCTUREGOVERNOR, CHAIRMANIDL DIRECTORMEMBER, OGCCCHAIRMAN, SCALING BOARDDEPUTY DIRECTORSUPPORT SERVICESDIVISIONLANDS & WATERWAYSDIVISIONFORESTRY & FIREDIVISIONOPERATIONSDIVISIONSUPERVISORY AREAS& FOREST PROTECTIVEDISTRICTSOIL & GAS DIVISIONWITHIN IDLOGCCSECRETARY8910 12122Coeur d’Alene Staff Office - Coeur d’Alene10Clearwater Supervisory Area - Orofino3Priest Lake Supervisory Area - Coolin11Maggie Creek Supervisory Area - Kamiah4Pend Oreille Lake Supervisory Area - Sandpoint125Kootenai Valley Forest Protective District Bonners Ferry (part of Pend Oreille LakeSupervisory Area)Craig Mountain Forest Protective District Craigmont (part of Maggie Creek andClearwater Supervisory Areas)13Payette Lakes Supervisory Area - McCall6Mica Supervisory Area - Coeur d’Alene14Southwest Supervisory Area - Boise7Cataldo Forest Protective District - Kingston(part of Mica Supervisory Area)15Eastern Supervisory Area - Idaho Falls8St. Joe Supervisory Area - St. Maries16Jerome Field Office (part of EasternSupervisory Area)11FIREThe Idaho Department of Lands believes in.90§ Ponderosa Supervisory Area - DearyMAJOR LAND OWNERSHIP & BREAKDOWN 95OWNERSHIP CATEGORY & ACREAGE *13 93Bureau of Land Management: 22.1%Private: 30%State IDL Endowment Land: 4.6%Federal Other: 2.9% **State Other: 0.5% ****Tribal: 1.7% ***TOTAL ACRES IN IDAHO - 53,130,86015§ 1OTHER / STATEWIDE HIGHWAYS15 20 9114Major LakesInterstateIDL Supervisory AreasUS Highway 2684§ 1686§ 30Joseph Plains, Idaho CountyForest Service: 38.2%FORESTRYOUR VALUES729OGCCTo professionally and prudently manage Idaho’s endowment assets to maximize long-termfinancial returns to public schools and other trust beneficiaries and to provide professionalassistance to the citizens of Idaho to use, protect and sustain their natural resources.Boise Staff Office - Boise 89*Acreages may differ compared to land ownership analyses conducted by other organizationsbecause of differences in spatial projections and how ownership categories are defined. Inthis analysis, acreages are rounded to the nearest 100 for all categories except State-IDL.Lands located beneath lakes and streams are not included in this analysis. **Includes 11other classifications of federal land. ***Includes lands managed by U.S. Bureau of IndianAffairs and lands within an Indian Reservation boundary that are managed by a Tribe.****Includes lands managed by Idaho Department of Fish and Game, Idaho Department ofParks and Recreation, and other State ownership.LANDS & WATERWAYSThe Idaho Department of Lands will be thepremier organization for trust managementand resource protection in the westernUnited States.61IDL - 2019 ANNUAL REPORT2LAND OWNERSHIPOUR VISIONOFFICE LOCATIONS INTRODUCTIONPHILOSOPHYACCOUNT STATEMENTS53

38% 1,6008%19%7.7% gain in FY19 800 600Domestic Equities 400International Equities 200Global Equities .S. CommercialReal EstateTOPFixed Income 2,324,057,112 Total Fund Balanceas of June 30, 20198%RELATIVE TO PEER FUNDSOVER THE LAST 10 YEARSPOLICY FOR ENDOWMENT FUND INVESTMENTS AND BENEFICIARY DISTRIBUTIONSIn overseeing the 2.3 billion endowment fund, it is the policy of the EFIB to makelong-term strategic allocations and avoid making tactical shifts. The strategicasset mix of the fund is 66% stocks, 26% bonds, and 8% U.S. commercialreal estate. The expected long-term return of this asset mix, after inflation, isapproximately 4% and historically market losses have occurred in one year outof three.In determining distributions, a trustee must balance the needs of current andfuture beneficiaries. It is the Land Board’s policy to distribute a conservativeestimate of long-term sustainable income, from both the fund and the land,and hold sufficient reserves of undistributed income to absorb predictable downcycles in endowment earnings. It is a priority to avoid reductions in distributionsbecause most beneficiaries depend on them to fund ongoing operations.FORESTRY 1,000OVER LAST 10 FISCAL YEARSOGCC9% 1,20010.5%ACCOUNT STATEMENTSCHRIS J. ANTON26% 1,800ANNUAL RETURNFIREMANAGER OF INVESTMENTSBOARD CHAIRMAN 2,000ENDOWMENT FUNDLANDS & WATERWAYSSHERRI YBARRASUPERINTENDENT OF PUBLIC INSTRUCTIONATTORNEY GENERALENDOWMENT FUNDASSET MIX 2,200 1,400IDL - 2019 ANNUAL REPORT06The Land Board also oversees the Idaho Board of Scaling Practices,the Clearwater-Potlatch Timber Protective Association, and theSouthern Idaho Timber Protective Association. in millionsINTRODUCTIONUnder the direction of the Land Board, the Idaho Department ofLands also administers Idaho’s public trust lands – the lands beneaththe beds of Idaho’s navigable lakes and rivers – for the benefit of allIdahoans; ensures protection of water quality and other resourcesby overseeing forest and mining practices; remediates abandonedmine lands; and provides service and assistance to Idahoans throughforestry and fire management programs.TOTAL LAND GRANT ENDOWMENT FUND ASSETS 2,400JUNEDUSTIN MILLERThe Idaho Department of Lands and Endowment Fund InvestmentBoard carry out the executive directives of the Land Board to meetits constitutional trust mandate and other duties.SECRETARY TO THE BOARDThe Land Board members are the stewards of state endowmenttrust lands in Idaho and more than two billion dollars of endowmentfunds. These land and financial resources generate tens of millionsof dollars annually for the trust beneficiaries.STATE CONTROLLERThe mandate was included in the Idaho Constitution, which statesthe lands will be managed “in such a manner as will secure themaximum long-term financial return” to the beneficiary institutions.BRANDON WOOLFIn 1890, Idaho became the forty-third state of the Union. At that time,Congress granted millions of acres of land to the new State of Idahofor the sole purpose of funding specified beneficiaries, primarily thestate’s public schools.LAWRENCE WASDENThe Idaho State Board of Land Commissioners (LandBoard) consists of Idaho’s Governor, Secretary of State,Attorney General, Superintendent of Public Instruction,and State Controller.The nine-member Endowment Fund Investment Board (EFIB) manages, on behalfof the Land Board, the investment of a perpetual endowment fund whose originalsource is land sale proceeds and the reinvestment of income generated by Idahoendowment trust lands. A staff of four people in Boise oversee the fund and outsideinvestment managers. Members of the EFIB are appointed by the Governor andconfirmed by the Senate.DEAN BUFFINGTONSECRETARY OF STATELAWERENCE DENNEYBRAD LITTLEGOVERNOR OF IDAHOIDAHO STATEBOARD OF LANDCOMMISSIONERSENDOWMENT FUNDINVESTMENT BOARD

10 020102011201220132014201520162017Public School Endowment201820192020Public SchoolHigher EducationOther 428 141 91TOTAL 660All constitutionally designated funds and their beneficiaries are:State Juvenile Corrections Center, State Hospital North,Idaho State Veterans Homes, and Idaho School for theDeaf and Blind Penitentiary Fund – Idaho Department of Correction310Oil and gas wells producingon state endowment leases210,745Active encroachmentpermits (e.g., docks)16,622Fire safety burn permitsissued School of Science Fund – University of Idaho State Hospital South Fund – Psychiatric Inpatient Care University of Idaho Fund – Idaho’s Land Grant University Normal School Fund – Idaho State University Department of661,444HARVESTED* million board feet3,370,077 acres78,206,400ENDOWMENT DISTRIBUTIONS59ENDOWMENT MINERALC O T TA G E S I T E S6,300,000 acresSOLDPROTECTED FROM FIREIN FY192,015Grazing leasesTECHNICAL ASSISTS TO PRIVATE LANDOWNERSEXECUTIVE LEADERSHIPEducation and Lewis-Clark State College Capitol Permanent Fund – Capitol building (major maintenance)TIMBER acresENDOWMENT TRUST LANDFarming leases1,127*PLANTED2,477,613Active submerged landleases (e.g., marinas)172239 MMBFTREE SEEDLINGSOil and gas leasesINSPECTIONSFIRE568FOREST PRACTICESDUSTIN MILLER – DirectorDIVISION ADMINISTRATORS:BILL HAAGENSON – Operations////CRAIG FOSS – Forestry & FireDAVID GROESCHL – State Forester, Deputy Director//DONNA CALDWELL – Support Services////ANDREA RYAN – Human Resource OfficerDIANE FRENCH – Lands & Waterways//ACCOUNT STATEMENTS2312,450(15 geothermal, 1 wind)Other EndowmentsIdaho’s public school system is the primary beneficiary of state endowment trust lands. Public School Endowment Fund – K-12 Education Agricultural College Fund – University of Idaho Charitable Institutions Fund – Idaho State University,1,640,000Alternative energy leases16NOTIFICATIONSIDL - 2019 ANNUAL REPORT08 20Mineral leasesFOREST PRACTICESMICK THOMAS - Oil & GasFORESTRY11-YEAR TOTAL (millions) 30142(115 cottage sites, 7 residential)OGCC 40Residential leasesLANDS & WATERWAYS 50122(industrial, military, recreation,communication sites, office/retail)INTRODUCTION 60Commercial leasesLOCATION PERMITS 70203TEMPORARY EMPLOYEES ( INCLUDES SEASONALS )175 ACTIVE 8023Conservation leasesTIMBER SALES in millions 90LEASES & PERMITS70 MINERALEXPLORATIONHISTORY OF ENDOWMENT DISTRIBUTIONS2019 IDL SNAPSHOTTHEENDOWMENTBENEFICIARIESPERMANENT EMPLOYEES

FISCAL MANAGEMENT: The fiscal team provides oversight and policy directionfor all accounting functions within the department, including accountspayable and receivable, payroll, and internal auditing. They work closely withthe Endowment Fund Investment Board to make certain the land assets arerepresented as part of the whole trust, ensuring transparent reporting to theLand Board.REMOTE SENSING: The remote sensing team is focused on the collection andanalysis of data from airborne sensors. Utilizing a combination of satellites,aircraft, and unmanned aerial systems (UAS), they are developing costefficient methods for IDL to obtain needed land resource information. Thisincludes a large-scale initiative to create a detailed 3D model of all Idahoendowment land using airborne light detection and ranging (LiDAR).INTERDISCIPLINARY TEAM: The interdisciplinary team is the cadre ofscientists with expertise in hydrology, water rights, fish biology, and geologythat provide recommendations and technical assistance to endowment trustland managers across Idaho. They help ensure that management activitiesmaintain wildlife habitats, protect ecological integrity, comply with waterquality standards, and work in harmony with diverse geological settings.ENDANGERED SPECIES: The IDL weighs in on any proposed federal listingsof species in Idaho that will affect management of endowment lands. IDL isproactive in providing researched, science-based reviews and input to helpensure sustainable active management is supported on state endowmentlands in compliance with needed habitat protections.ACCOUNT STATEMENTSIDL - 2019 ANNUAL REPORT10INFORMATION TECHNOLOGY: The information technology (IT) team supportsagency operations by implementing and supporting cutting-edge internaland public-facing enterprise systems. The IT team manages the agency’scomputing infrastructure and records management functions, while ensuringprivacy and security of information.GEOGRAPHIC INFORMATION SYSTEMS: A team of Geographic InformationSystem (GIS) analysts design, develop, and implement GIS applications,geodatabases, and process-automation tools to provide IDL managers withworking solutions to their spatial data collection, analysis, and reporting needs.FIREHUMAN RESOURCES: The human resources (HR) team delivers professionalassistance to the agency in the areas of recruiting, employee development,benefits management, compensation analysis, employee relations, and safety.They ensure compliance with federal and state employment laws and providevalue-added services in the areas of meeting facilitation, training, and jobdesign. In FY19, the HR team implemented a new applicant tracking system,initiated a third cohort of the Leadership Development Program, and rolled outa new employee hiring process using electronic content management.LAND RECORDS: Land records staff members maintain the property ownershipdatabases and records including all deeds and encumbrances for all statelands.FORESTRYPUBLIC INFORMATION: The public information officers manage thecommunication needs of the agency, helping to develop clear and transparentcommunication for the public and the media through news releases, socialmedia, and the development of a more user-friendly website.PROCUREMENT: The procurement team networks extensively with bothinternal and external partners to ensure IDL meets the goal of consistentlysecuring high-value contractors for the agency. In FY19, the team solicited andawarded 430 contracts for commodities and services totaling approximately 20 million. This total includes 1.5 million awarded to vendors for activitiessupporting IDL’s Good Neighbor Authority initiatives.OGCCVital to any organization are the people who work behind thescenes helping the team achieve success. Some staff developand monitor the strategic plan, establish pertinent policy, anddevelop and support legislative actions. Others receive andrespond to hundreds of public records requests. The success ofLand Board and Oil and Gas Conservation Commission meetingsdepends on those who coordinate the materials and meetingdetails.LANDS & WATERWAYSDEPARTMENT SUPPORT FUNCTIONSINTRODUCTIONIDL scientists conduct fish monitoring on McBride Creek in Owyhee County.

12PEND OREILLE SUPERVISORY AREA Based in Sandpoint TRAIL SYSTEM IMPROVEMENTS TRAIL SIGNAGE PARKING LOT VAULT TOILET GRANT SECURITY PATROL CONTRACTPRIEST LAKE SUPERVISORY AREA Based in Coolin SIGNAG

Cover Photo: Sheep grazing on Packer John Mountain in Boise County near Smiths Ferry 300 North 6th Street, Suite 103, Boise, Idaho 83702 P.O. Box 83720, Boise, Idaho 83720-0050 IDAHO DEPARTMENT OF LANDS www.idl.idaho.gov WORKING LANDS, TRUSTED STEWARDS 2019 ANNUAL REPORT

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