Lots for Tots | Cover Story | Salt Lake City Weekly

January 29, 2014 News » Cover Story

Lots for Tots 

How one agency is selling off Utah in the name of the children

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From Interstate 70 near Green River, the Book Cliffs are not showy: gray, dusty and forbidding, the rocky mass seems noteworthy only for its harshness juxtaposed against a naked blue sky. Proceed past this façade, however, and the lush, pine and aspen-filled wilderness known as Bogart Canyon, largely untouched by man’s rough hand, reveals itself.

Beloved by hunters and environmentalists, Bogart Canyon has beneath it what some believe are vast pools of oil that soon could be tapped and drained. When it comes to the 3.4 million acres of land that was handed over by the federal government to Utah’s schoolchildren at statehood, almost anything can happen—so long as dollar signs are attached.

By 2015, a Canadian corporation behind the first-tar sands project in the United States hopes to strip oil from the bedrock of schoolkid land in Uintah County. And Tabby Mountain, a 25,000-acre chunk of timber bordering Wasatch and Duchesne Counties, might someday be dotted with log cabins and, at least one person hopes, an “Old Faithful Lodge.”

Some of the proceeds from all of these projects will trickle down—in the form of books, computers and even teachers—to Utah’s schoolchildren, for it is they who own the land.

Few Utahns, let alone schoolchildren, know about the School & Institutional Trust Lands Administration (SITLA), an agency that has just one goal: to make money for the state’s K-12 constituency. In 2013, the work of SITLA manifested itself in around $40,000 for every school in the state. Utah’s cash-starved public education system needs the money, so criticizing how it’s won can be politically sensitive.

But as the impacts of Utah’s ever-growing population take their toll on the environment, SITLA’s quest for money has taken it to the feet of the energy industry’s most controversial and resource-intensive extraction methods, like oil shale and tar sands. And as the state’s air grows dirtier and water supplies dwindle, some question whether the good SITLA does for the schoolchildren of today is damning the schoolchildren of tomorrow.

“It’s unfortunate,” says David Garbett, staff attorney for the Southern Utah Wilderness Alliance, “the idea that you’re saying we have to do these terrible things because of kids, that’s ridiculous. But they love to hide behind them.”

SITLA, he says, is “using kids as shields.”

The 1 Percent: Money You Can Feel
As effective as SITLA is at making money, its annual contribution to education accounts for only about 1 percent of the state’s $3 billion-plus education budget.

The permanent school-trust fund, into which SITLA’s revenues are folded, holds $1.6 billion. The interest and dividends earned from this fund are funneled to the schools. In 2013, this came to $37 million, which was divided between all of the state’s public schools through a formula based largely on enrollment. Then it reaches elected school community councils, which decide how to spend it.

Because of this delivery method, SITLA is often ascribed nothing less than savior status. Even though its contribution to education is small, it’s a resource that parents and teachers get to allocate the way they see fit.

On this point, the eyes of Margaret Bird, who retired in 2013 as the director of the Schoolchildren’s Trust Section in the Utah Office of Education, light up. “We don’t even have Kleenexes,” she says of many schools in the state. “The teachers have to ask kids to bring Kleenexes from home, and if you’re in a poor area they can’t, because they can’t have Kleenexes at home either. And so then here comes trust lands, and it’s a puny amount of money, but people really care what it’s doing in their schools. They see it.”


But it is here where the debate rages about whether or not the money SITLA provides to schools outweighs the damage its develop-first mentality causes to the land.

“They may get money right now, but the environmental impact that will show up down the road is going to cost this state in dollars and a lot of times in health repercussions,” says former Castle Valley Mayor Bruce Keeler, who became a SITLA critic when the agency attempted to develop a potash mine near town, then tried to sell off the land to developers. “There needs to be something more than just the dollar involved or it just doesn’t really work.”

Garbett, of SUWA, and many others interviewed for this story, expressed concerns that because SITLA has a single mandate—to monetize lands—it can’t benefit the schoolchildren of Utah in other ways.

Garbett cited Bogart Canyon in the Book Cliffs, a premier spot for wildlife, as a location where something besides building up a bank account is possible.

“We have this remarkable roadless area whose real value is in wildlife habitat; it’s not in making a few dollars for education that will only tangentially make it to schools,” Garbett says. “If we wanted something for education, we’d say, ‘Well, let’s preserve that as a place of learning where kids can go see this remarkable wildlife in its natural habitat.’ ”

Ty Markham, a former teacher and co-chair of the Mormon Environmental Stewardship Alliance, also says SITLA’s monetary contribution to education is not worth the harm it brings to the state’s lands.

“It’s almost like a drop in the bucket,” Markham says. “And look at what we’re giving away for that.”

To Bird and SITLA advocates, talk like this translates to nothing less than stealing books from schoolchildren.

“I’d call that greed,” Bird says when asked about SUWA and other organizations’ efforts to conserve more SITLA land. “Who can steal from a schoolchild, particularly the lowest-funded schools in the nation? To me that speaks to character—and lack of character.”

Fast, Easy Money
In Utah, many county commissioners, private companies, state employees and SITLA don’t try to hide, nor are they ashamed of, the fact that business goes off with fewer hitches when it happens on state or school-trust lands. Fewer hitches means less regulation—and less regulation means they don’t have to comply with the federal government’s environmental- review policies.

Kim Christy, SITLA’s deputy director, said if his agency had to think about multiple uses, like conservation and recreation on trust lands, it’d be no better than the much-maligned federal Bureau of Land Management.

“It is true that the sea of federal domain that we largely exist in has a very restrictive dimension to it,” he says. “I think that there is a stronger level of efficiency with how we do business as opposed to how the federal government does.”

One example of SITLA’s efficient business model is illustrated in the installation of cellular-telephone towers, 122 of which exist on school-trust lands. Although a telecommunications firm must obtain relevant county permits to install a tower on SITLA land, no federal environmental review must be obtained, as would be the case on BLM land. As a result, Garbett says, it makes sense that private companies of all makes and models would prefer doing business on school trust land.

“It’s basically, like, ‘Well, how much do you want to pay? Sure, go ahead and put it up,’ ” Garbett says. “It’s very quick, no environmental review necessary.”

In the Uintah Basin, Utah’s nest of oil activity, SITLA’s sphere of influence looms large. According to Uintah County Commissioner Mike McKee, 8.2 percent, or 138,000 acres, of the county is managed by SITLA.

For McKee, who notes his county has “generally had a favorable position toward the extraction industry,” the more land he can wrest from the federal government, which manages the vast majority of the county’s land, the better.

“From my point of view, it’s nice when we can have more of our land that’s private and is controlled by the state,” he says. “It’s a lot easier doing business on state and private land.”

Tar Sands for Schoolchildren
Much of the activity occurring on SITLA lands happens in the Uintah Basin. This is by design. Since 1998, SITLA has traded out 499,481 acres of its land near sensitive wilderness areas for plots that can more easily be developed. The biggest single exchange involved 377,000 acres SITLA managed in the Grand Staircase Escalante National Monument. In exchange it received a large chunk of land near Price known as Drunkard’s Wash, plus $50 million cash. Since that trade, Drunkard’s Wash has netted $140 million for the school trust fund.

Garbett says trades like these are largely beneficial for everyone involved. SITLA gets land in places like the Uintah Basin that’s rich in resources, while more sensitive land in wilderness study areas, for example, are protected. A current land-exchange effort, known as the Utah Recreational Land Exchange Act, will trade out 36,000 acres of SITLA land around Moab near the Colorado River for 46,000 acres of federal land in Grand, San Juan and Uintah counties.

“I would make that argument for the rest of the state,” Garbett says. “Protecting public land that can lead to these land exchanges is the best thing that can happen to SITLA.”


It’s this horse trading that’s given SITLA vast stretches of land in the Uintah Basin, the home of Utah’s latest boom. Bird’s speech quickens when she notes, “It is believed by those petroleum engineers that there is more oil and gas out in the basin, in this area, than in Texas, in terms of known reserves.”

Christy, too, has great expectations for SITLA’s holdings in and around Uintah County. “This may well be the Bakken clay,” he says, a reference to the formation in North Dakota that’s responsible for much of that state’s oil and gas boom.

One avenue SITLA is taking to make money in the Uintah Basin is through tar-sands development. Wildly unpopular with environmental groups, tar-sands developments often use steam, which relies on water or a solvent process, to separate the oil from the rock. The website of U.S. Oil Sands, the Canadian corporation that leased the SITLA land, says the company will separate the oil using a citrus-based solvent technique that is less water-intensive.

Even so, fears remain that tar-sands developments in Utah will sap valuable water resources from the second-driest state. According to the Canadian Association of Petroleum Producers, a group that lobbies on behalf of the tar-sands industry in Canada, where most of the world’s tar sands exist, it takes 3.1 barrels of water to produce a barrel of oil.

“It takes more energy to produce petroleum products from tar sands,” says Jerry Mansfield, SITLA’s tar-sands resource specialist. “When you expend energy, you have a bigger carbon footprint, and that’s a big deal right now.”

U.S. Oil Sands has leased 32,000 acres from SITLA in Uintah County with the intent to develop tar sands. SITLA officials say the projects could produce billions of barrels of oil.

One project, at an area known as PR Springs, has already received permits from the state’s Division of Oil, Gas & Mining and the Division of Water Quality. Mansfield says 8 percent of the royalties from direct sales of these tar sands would go to Utah’s schoolchildren.

About the only thing standing between U.S. Oil Sands and a green light for development at PR Springs is John Weisheit, conservation director at Living Rivers, which advocates for the protection and restoration of rivers and wetlands. In a lawsuit pending before the state supreme court, he’s challenged the rationale of the state permits.

Weisheit doesn’t pull punches when speaking about SITLA.

“What the schoolchildren don’t know is that [SITLA and oil companies] are turning the Tavaputs Plateau into a wasteland,” he says. “It’s destroying our children’s future, it’s destroying our air, our water. It’s not mutually beneficial. It’s not a win-win situation.”

SITLA deputy director Christy doesn’t agree. Caving to this kind of criticism, he says, would cripple his agency’s ability to build up the school trust fund. SITLA not only wants to develop these resources, he says, but also will vigorously look for more opportunities like those at PR Springs.

“We’re not shy of those kinds of opportunities; in fact, we’re very proactive to explore what kinds of opportunities might be presented in that area,” he says, adding: “If we cater to all the criticism that’s out there, I think the ultimate outcome of our ability to deliver any dollars to the education fund would be damaged drastically. Collapsing to [criticism] would ultimately paralyze our ability to do anything.”

Shut the Door
SITLA is supposed to abide by the state’s open-meetings laws, and at least most of the time, provide an avenue for competitive bidding.

But when it doesn’t feel open bidding can yield the best profit, it can shut the door and negotiate exclusively with a chosen party under a provision it calls “other business arrangements.” This is what happened with Bogart Canyon, which was leased to Anadarko Petroleum Corporation. The terms of the deal were negotiated in secret, and Anadarko was the only company courted.

Christy defends this process. “There are times you simply have to close the door and talk confidentially,” he says.

Even though Bird was instrumental in reforming the old machinery of trust lands—which, she says, involved board members “getting together the night before and deciding how they would all vote”—she defends SITLA’s recent closed-door policies.

“It should happen behind closed doors because no business can negotiate in public,” she said.

But if a negotiation took place in secret, how would the kids, or anyone else, know if a deal is in the children’s best interest?

“First of all, the schoolchildren don’t track any of this, because they’re too little to even understand about a lease and royalty or anything like that,” Bird says, finishing with a key point: “And the lands don’t belong to the public.”

While SITLA land is not technically public, much of it remains open to the public through a $700,000 annual payment from the state’s Department of Natural Resources. This payment, says Mike Styler, executive director of the DNR, keeps swathes of SITLA land open for hunting, fishing, camping and other outdoor activities. If for some reason these payments stop, Styler has no doubt what SITLA will do.

“They’re saying, absent that agreement, they can close it off and charge access,” he says.

Bird stirs when the DNR is mentioned. She says its payment is nothing short of a ripoff. She believes that private landowners generate millions of dollars through a partnership with the DNR that allows limited hunting on large patches of private land across the state.

DNR officials say the amount of money landowners make through the program is impossible to calculate, since they do not disclose how much they charge for permits on their private land, of which 2.1 million acres is enrolled. The DNR brings in $400,000 from the public permits it sells on this land.

“Does that seem fair to the schoolchildren to you?” Bird asks, noting that SITLA manages and allows public access on more acreage than the private landowners. “Does that seem like market value to you? That is not justice, it’s not right, it needs to go to court, it needs to get solved.”

Momma Bird
Whenever the SITLA acronym flies from a politician’s lips, it is quite likely that Bird’s face is what they see.

Her interest in Utah’s trust lands dates back to 1985, when she ended up as the first woman on the state’s land board. From there, she helped form a legislative task force, which in 1995, after three years of study, formed SITLA.

In order to avoid the type of political corruption that had dominated trust lands up to that point, SITLA was fashioned as a quasi-governmental agency, meaning that it could operate with a level of independence other government bodies lacked. This was important, Bird explains, because in order for SITLA to manage land across the state, it needed to be exempt from outside influence.

Bird says a key part of this structure was instituting incentive-based pay for SITLA employees and managers, a practice that continues to this day for regular employees. SITLA officials say management bonuses ceased in 2006, after a legislative audit criticized the agency for its lucrative pay schemes. The audit found that SITLA doled out $2 million in bonuses between 1997 and 2005, $1 million of which went to senior management. In 2005 alone, it paid out $395,000 in bonuses.


The audit also found that while SITLA was turning profits during this time, and using these figures to justify the bonuses, its benchmarks for issuing extra pay were set woefully low, making it all but impossible not to reach full-bonus status.

Bird says she had no problem whatsoever with the bonuses, citing SITLA’s ever-growing contributions to the school trust fund. “What’s the big deal about $300,000 in bonuses if that keeps people motivated and coming up with new ideas and new ways to make money?” Bird asks.

During the last fiscal year, SITLA racked up $9.5 million in expenditures, while generating $106.4 million in income, according to its balance sheets.

Offering bonuses was one way in which the guts and gears of SITLA were built to make it a money-making machine.

“SITLA’s success far exceeded what we had ever envisioned,” Bird says. “I knew those lands could make more money. I think we’ve only just begun to see how much it can make.”

Book Cliffs for Books
When SITLA officials announced in August 2013 the deal to lease Bogart Canyon, they crossed a new line. Where opposition to SITLA’s land-use policies had traditionally come from environmental groups like SUWA, they now had hunters and fisherman on their backs. And not long afterward, Gov. Gary Herbert jumped on the heap, forcing SITLA to put on the brakes.

SITLA did so reluctantly, placing a two-year pause on the deal, time that allowed them to form a committee with two seats reserved for representatives of wildlife groups. This committee will study mitigation measures for the project in the hopes that all sides can leave happy.

In the meantime, a so-called “grand bargain,” proposed by 1st District Congressman Rob Bishop, aims to sooth land disputes across the state between conservation groups, developers and other interests. Some want this deal to include Bogart Canyon.

But for SITLA, which has spent decades building up blue squares around Bogart Canyon, inclusion of this area in a land swap could cost schoolchildren hundreds of millions of dollars.

“This block was ultimately created over multiple land exchanges over time with an eye toward mineral development,” Christy says. “[For] us to walk away from this opportunity is going to be a challenge to our beneficiaries, our board, etc.”

That SITLA would bow to the governor and the interests of hunters was rare. Christy called it the “test of our time”; for him, it represents the type of meddling in SITLA’s dealings that the agency has always attempted to avoid, what Christy called “trying to be everything to everyone.” Putting projects on hold, asking permission, conducting sensitive meetings like the one with Anadarko in public—all of that would stunt SITLA’s progress and, Christy says, threaten to send the agency back into its old corrupt ways.

“We are not in a position of ‘Mother may I’ to the general public, and if that were the case, we would quickly fall back into the ’94 model,” he says, referring to management of trust lands prior to the formation of SITLA.

Bird seems confident that Anadarko will eventually develop Bogart Canyon, and when it does, she senses that SITLA’s contribution to the state’s education budget could become far more substantial than 1 percent. “[If] they hit the kind of oil we hope they’ll hit out in the Book Cliffs, I do see a day that it’s an ever-increasing funding source, doing really significant things for schools,” she says.

Tabby Mountain Auction Block
Not more than a two-hour drive from Salt Lake City is Tabby Mountain, 25,000 acres of rugged mountains blocked out in solid SITLA blue on state land maps.

Hunters and outdoor enthusiasts treasure this area as they do Bogart Canyon. They treasure it so much, in fact, that in 2006, the DNR offered to pay SITLA $40 million for the land.

Styler, the executive director of the department, remembers that no actual negotiations between his department and the SITLA board ever took place. He says that while SITLA staff seemed interested in working out a deal, one person in particular didn’t: Margaret Bird.

“The beneficiaries, represented by Ms. Bird, had some inflated idea of the value and they said, ‘We’re better off just keeping it for the future, and let it appreciate,’ ” Styler says.

Bird remembers Tabby Mountain. She says SITLA will always entertain land purchases, so long as they’re at fair market value. And in this case, she says, SITLA decided $40 million was too low.

She says that SITLA did studies to determine if such a large chunk of land existed anywhere else near a large urban area. It did not, she says, making Tabby Mountain a prime spot for lodges and cabins.

“Twenty-five-thousand acres within an hour and 15 minutes of a metro area bigger than a million people?” she says. “I think it’d be valuable for all sorts of things. I’ve always thought something like an Old Faithful Lodge.”

Bird is looking forward to when the state widens Highway 40, which has been the main artery connecting thousands of oil trucks to the Salt Lake Valley since the oil boom began in the Uintah Basin. Highway 40 is how you access Tabby Mountain.

“I think we haven’t begun to see the real value that that property’s going to have,” she says. “When they improve the road out to the basin. … All of those things will make it increase in value.”

Winds of Change


There’s no shortage of folks who feel SITLA’s actions aren’t in the long-term best interests of schoolchildren. But tell that to the schoolchildren who get new books, microscopes and teacher’s aides every year with the money SITLA provides.

Few can illustrate this conflict better than Heather Bennett, vice president of the Salt Lake City School Board of Education and an organizer of the group For Kids & Lands. She says the issues surrounding SITLA will never be cut and dried because the money it provides is “very important to schools.”

Bennett says SITLA might need to have its mandate altered so it can consider other things besides dollars, but something also needs to prop up education funding—and soon.

“I think the lesson about SITLA is that I don’t know that you can give land-use policy to a group, no matter how independent, with only a single mission, and expect that the results are going to be the best results that can be produced,” she says.

Despite the flap over the Bogart Canyon lease, SITLA appears to have quelled the concerns of Herbert.

In a prepared statement to City Weekly, Herbert said he supports SITLA’s mission and doesn’t believe any legislation is necessary to shake it up.

On Jan. 27, SITLA kicked off 2014 with a land-lease auction. Among the tens of thousands of acres up for grabs were 718 acres for tar sands, 944 acres for oil-shale mining and 9,274 acres for frac sand mining, which strips silica from underground sand that is later used in other hydraulic fracturing operations. The minimum bid for the oil-shale lease, which was in Uintah County, was $500,000.

The long-term health and environmental impacts of this auction and those to come might not be felt for years, or even decades. One thing, though, is certain: a portion of the proceeds will end up in the hands of Utah’s schoolchildren.

But the “ravaging of our land, air and water is truly a diminishment to our children’s future,” the Mormon Environmental Stewardship Alliance’s Markham says. “If you don’t have a healthy child, what good is education?”

SITLA Land: Utah’s “Blue Rash”

At its simplest, Utah is a bunch of six-mile-by-six-mile squares. Each of these is known as a township. Within a township are more squares—36 of them. In the 1894 Enabling Act, which made it possible for Utah to join the union, the federal government granted four parcels in each township “for the support of common schools.” These parcels were numbers 2, 16, 32 and 36. On the checkerboard-like overlay showing townships on a map of Utah, those parcels are colored baby blue—some people call it the “blue rash.”

Because Mormons had been busy settling the state since their arrival in 1847, much of this designated school land had already been spoken for. For instance, the maps show that the corner of South Temple and State Street, plot No. 36, would have belonged to the schools. In exchange for the land that had already been taken, the state was allowed to block up bunches of squares inside other townships for schools. As a result, some townships are all blue.

For the first 98 years of its existence, this land—7 million acres in total—was managed by the Division of State Lands & Forestry. But by the early 1990s, the permanent school fund held a mere $15 million and half of the land granted at statehood had been sold.

Following a spate of bad publicity surrounding a below market value sell-off of 2,500 acres of valuable land in Washington County in the 1980s, the state legislature created SITLA, prodded in part by Margaret Bird, who had been studying the plight of trust lands and become a local authority.

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