By JARED G. JONES
Public land auctions earned over $1 million for Utah schools in March. The Trust Lands Administration sold more than 2380 acres of land in various parts of Utah for about $430 an acre.
Dave Herbertson of the TLA said he was very pleased with the sale and that $430 per acre was an excellent price.
“This is undeveloped land and many people think they can purchase it for a dollar an acre. This was not the case with this sale,” Herbertson said.
For example, a $1,200 bid was given for land at the base of Boulder Mountain near Torrey, Wayne Co. The 40 acre area sold for $190,000.
The success of the sale can be contributed in part to how it was held, Herbertson said.
Previously, sales were held in the community closest to where the advertised property was located. For the past three auctions, the TLA held auctions in Salt Lake City for land throughout the state.
“This new method brings in a (larger) number of people,” Herbertson said.
Lands managed by the TLA are sold to create a perpetual fund for Utah schools, grades K through 12, and 11 other beneficiaries. Organizations such as the Utah State Hospital, the Utah School for the Deaf and a fund for public buildings are other groups that benefit from TLA funds.
Revenues from land auctions are turned over to the state treasurer. The office of the treasurer then invests the money in stocks and bonds. Recent legislation allows the treasurer to invest as much as 65 percent of the funds in equities or mutual funds, and up to 35 percent in bonds.
Now that more money can be invested in stocks, it means a higher return on money for the trust beneficiaries, said Richard Ellis, chief deputy of the State Treasurer’s Office. Equities earned 23 percent annually while bonds earned 6.2 percent over the same period.
Even though stocks and mutual funds contain a greater element of risk, they are worth it in the long run, Ellis said.
“Because this is a permanent fund, we can look at things in the long term. Over 15, 20 and even 70 years, stocks (perform better than) bonds and we will come out ahead in the long run,” Ellis said.
After the money is invested by the treasurer, the trust beneficiaries receive the generated interest. The interest amounted to $141 million last year, with schools receiving $130 million of that fund.
For schools, the money goes into the Office of Education’s general fund, so it can be used as needed, said Pat O’Hara of the Office of School Finance. Other beneficiaries use the funds as needed.
The TLA has another land auction planned for May 8. Herbertson said he expects revenues similar to the March auction.