The State Land Board makes a sizeable contribution to Colorado public schools – last year $54 million in funds generated from mineral, grazing and commercial sales and leases went to support kindergarten through high school. Another $5 million went to support the University of Colorado, Colorado State University, Fort Lewis College, state parks, buildings, penitentiaries and a 300,000-acre stewardship trust to preserve scenic state lands from development.
These are all worthy causes, and all are facing financial pressures, so the board’s contributions are a significant matter. We thus were glad to see land board officials respond swiftly and positively to a recent harsh assessment from the State Auditor.
The audit uncovered some poor management practices that could be reducing the trust funds’ incomes. In the majority of land transactions, more than a year passed between when the board obtained appraisals and when the deals closed. In five cases, the board didn’t get independent appraisals when buying properties worth $100,000 or more. The board isn’t even sure its deals cover their costs. The board discounts grazing leases 35 percent below market, but there’s no sound reason to do so. Auditors said the “board lacks data showing its land management policies are prudent and produce reasonable and consistent income,” as the state constitution requires. As a result, the board isn’t sure it’s getting the best return for the education accounts or other trusts.
Any missteps are all the more frustrating because the board is capable of good work. In 2002, it helped preserve Emerald Mountain, the scenic backdrop to Steamboat Springs. This year, after pressing the military to clean up the 23,000-acre former Lowry Bombing range east of Aurora, the board adopted a plan that will preserve open space, create opportunities for much-needed metro-area water storage projects and allow some housing projects. These are visionary deals that have not provoked even a hint of criticism from the auditors.
The audit was publicly released in December, but already the land board staff has implemented key recommendations, such as requiring appraisals on all land deals and auditing more mineral leases. By July, the board will re-assess the grazing discount and evaluate the fiscal impact of its transactions. The quick action could lead to better management of state properties and better returns for the land board’s beneficiaries.
