Board debates issue of leasing rates for state lands

HELENA - The long-standing debate over how much money the state should get for renting its land arose again Monday as the state Land Board tried to settle disputes over grazing rates for several leases.

Members of the board - which is comprised of the state's top elected officials - raised questions about their ability to judge whether the recommended prices are proper. But they took the unusual step in one instance of rejecting the rate the Department of Natural Resources and Conservation recommended

Lt. Gov. Karl Ohs, acting board chairman while Gov. Judy Martz was out of state, warned members they were heading for trouble in second-guessing the agency's experts who based their decisions on detailed hearings.

He urged the board to have faith in the agency and how it decides the rates for leasing land, and avoid the temptation to obtain the most money without consideration of other issues.

''Deciding based on the highest dollar value per acre is a very slippery slope,'' Ohs said.

However, others on the board said they were not convinced that one proposed lease rate accurately reflected the true market value of the land.

For the state to routinely dismiss higher competitive lease bids would make the bidding process a charade, said John Morrison, state auditor.

The dilemma over how much to charge when grazing and crop land leases come up for renewal has been around for years.

Bud Clinch, director of the Department of Natural Resources and conservation, said his agency has to walk a fine line. The state wants to charge what the land is worth, but charging too much can prompt a leaseholder to overgraze the ground or cut back on weed control, in order to make a profit, Clinch said.

Roy Andes, spokesman for Montanans for the Responsible Use of the School Trust, and John Bloomquist, spokesman for the Montana Stockgrowers Association, sparred over the issue.

Andes argued the state has no evidence to support its claim that charging higher rates for leases leads to damaged land. The state should assume the highest competing bid for a lease is the correct one and make the lessee prove it's not appropriate, he said.

Bloomquist defended the state's policy of giving current lessees a preference in the bidding by allowing them to match the highest bid and then reducing it according to various factors such as quality of the land.

He said the practice results in long-term leasing by reliable farmers and ranchers, and that encourages productivity and investment in the leased land.

Harley Harris, a Helena attorney with a client involved in a state lease battle, said the state shouldn't have to give a rate break to lessees as incentive to properly manage the land.

''Why aren't current department regulations enough to ensure proper management of land?'' he asked.

The lease rate rejected by the board involved about 300 acres in Sweet Grass County. Rancher Don Tetlie has rented the land for the minimum $5.77 per animal unit month, a measurement of the amount of forage needed for a cow and calf for a month. That amounted to $455.83 a year based on the capacity of the land.

Neighbor Horatio Burns offered a bid of $45.65, or $3,685 a year. Two other bids were for $38.77 and $25.32. Tetlie matched the Burns bid and Clinch recommended it be reduced to $15.63, the average for state leases in the county.

''We've got some pretty good evidence that is not a valid figure,'' Attorney General Mike McGrath told fellow board members, noting all three competing bids were higher.

All but Ohs voted to reject Clinch's recommendation, gather more information and decide on the proper rate at next month's meeting.

Ohs called the high bid ''totally ridiculous'' and was the lone vote to endorse Clinch's rate.

The board accepted Clinch's recommendations on three other disputed leases, all of them going to the current lessees for less than the highest bid.