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Legislative Audit Commission


March 3, 1998

The meeting of the Legislative Audit Commission was called to order by Senator Deanna Wiener on Tuesday, March 3, 1998 at 8:35 a.m. in Room 318 State Capitol.

Members present:

Representative Mindy Greiling Senator Keith Langseth
Representative Mark Holsten Senator Deanna Wiener
Representative Dan McElroy
Representative Mary Jo McGuire

Members not present:

Representative Lynda Boudreau    Senator William Belanger, Jr.
Representative Edwina Garcia Senator Sheila Kiscaden
Representative Kris Hasskamp Senator David Knutson
Representative Philip Krinkie Senator James Metzen
Representative Bill Macklin Senator Thomas Neuville
Representative Ann H. Rest Senator Pat Pariseau
Senator Ember Reichgott Junge
Senator Allan Spear

Senator Wiener indicated the purpose of the meeting was to review the program evaluation report on school trust lands and recognized James Nobles, Legislative Auditor. Mr. Nobles indicated the federal government had given these lands to the state of Minnesota and reviewed their intended purpose, which is to generate funds for the state school fund.

Mr. Nobles introduced Susan Von Mosch, manager of the study on school trust lands, Thomas Walstrom and Mary Jackson, Evaluation Specialists. Ms. Von Mosch reviewed the scope of the study. Mr. Walstrom reviewed findings and recommendations concerning management of and income from recreational areas and timber sales. Ms. Von Mosch reviewed findings and recommendations concerning management of mineral rights and lakeshore lots that are leased and developed. Ms. Von Mosch and Mr. Walstrom also reviewed recommendations contained in the study concerning the school trust fund and the committee that oversees it. Both answered questions from members.

Senator Wiener recognized Eugene Gere, Assistant Commissioner for the Department of Natural Resources. Mr. Gere indicated it was DNR’s position that the lakeshore lots are worth holding and leasing, noting that local residents do not want them to be sold and that many of the lots are substandard. He indicated that directives from the Legislature on how to manage these lands were inconsistent. Senator Wiener noted that the Legislature looks to DNR for guidance on whether to lease or sell the lakeshore lots and suggested that the advisory council meet more frequently and establish clearly defined goals.

Senator Wiener recognized Howard Bicker, Executive Director of the State Board of Investment. Mr. Bicker reviewed how funds received from school trust lands are invested, reviewed suggestions for improving investment strategies, and answered questions from members. Senator Wiener recognized Representative Tom Rukavina, who asked several questions concerning data on lakeshore leases.

Senator Wiener recognized Peggy Ingison, Assistant Commissioner for the Department of Finance. Ms. Ingison addressed the report’s recommendations that related to the Department of Finance and answered questions from members.

Representative Rukavina asked several additional questions concerning the possible sale of trust land in the Boundary Waters Canoe Wilderness Area. Mr. Walstrom responded that these lands generated no funds for the trust, but that there was little opportunity for exchange with the U.S. Forest Service for other lands. Ms. Von Mosch noted that if these lands were sold, the state would retain the mineral rights.

The meeting adjourned at 9:50 a.m.

Senator Deanna Wiener, Chair

Jean Barnhill, Recording Secretary



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