Annual Report November 2015 PREPARED BY: Denton Yeo TLE Co-ordinator/Consultant

Transcription

1 Treaty Land Entitlement Annual Report November 2015 PREPARED BY: Denton Yeo TLE Co-ordinator/Consultant

2 Treaty Land Entitlement Annual Report November 2015 INTRODUCTION In July of 2007, following several years of negotiation with the federal and provincial governments, the Treaty Land Entitlement program commenced with the signing of two agreements; The Sturgeon Lake First Nation TLE Settlement Agreement The Sturgeon Lake First Nation TLE Trust Agreement The agreements address the following significant elements: - Total Shortfall Acres and Equity Quantum acres of land to be acquired - Total cash settlement to be paid to SLFN - Requirement for a Trustee to manage the Trust Fund - Technical Advisory Committee to be appointed - Procedures for approval of land purchases and access of trust funds. The purpose of this report is threefold: - to provide an update of TLE Activities over the past year - to present the Financial Statements of the Entitlement Revenue Account for the fiscal year ending March 31 st, to present the Financial Statements of the Sturgeon Lake TLE Land Holding Corp. for the fiscal year ending March 31 st, TECHNICAL ADVISORY COMMITTEE (TAC) The TAC role is to make recommendations to Council regarding land acquisitions and expenditures of the Trust Funds. The committee works closely with the TLE Co-ordinator to professionally scrutinize proposed expenditures and provide detailed advice to Chief and Council. A Treaty Land Entitlement Resource Manual was developed in A Strategic Plan included with the Resource Manual provides guidance to Chief and Council and the TLE Technical Advisory Committee regarding land acquisition and economic development. These priorities consist of a broad range of land use opportunities including: - traditional and cultural land uses (i.e. hunting, gathering, fishing, etc.) - tourism and recreational development (outfitting, ecotourism, cottage development, etc.) - agricultural lands (grains, oilseeds, livestock, etc.) - residential development (urban, rural, farmsteads, etc.) TLE TECHNICAL ADVISORY COMMITTEE MEMBERS Earl Ermine, Chair Howard Bighead Robert Ermine Sidney Naytowhow James Felix Valerie Charles Carol Longjohn Greg Ermine Advisors/Staff: Jack Long Denton Yeo, TLE Co-ordinator Miranda Ballantyne, Land Manager 2

3 - commercial development (offices, strip malls, truck stops, gas bars, hotels, etc.) - industrial development (mining, oil and gas services, manufacturing, industrial parks, etc. In the past year the TAC held one joint update meeting with Chief and Council. Many other special meetings and site visits were attended by individual members of the TAC. LANDS PURCHASED AND RESERVE CREATION The following table summarizes the lands that have been purchased by SLFN to date and annual revenues: LAND DESCRIPTION Grasslands (Monea) DATE PURCHASED June 2010 LOCATION RM Old Post (Southern SK) TOTAL ACRES PURCHASE PRICE LEASED ACRES (cultivated) ANNUAL GROSS REVENUE (2015 projected) 477 $ 136, $ 9,500 Martin March 2011 RM Canwood 2675 $ 1.900, $ 102,850 Gryba August 2011 RM Canwood 595 $ 390,000 Aynat Agri Ltd. January 2013 RM Shellbrook 452 $ 390, $ 15,000 Mathewson May 2013 RM Shellbrook 152 $ 249, $ 3,430 Gill June 2014 RM Torch River 264 $ 225, $ 9,100 Aramenko Oct RM Garden River 317 $ 149,000 Traditional land 0 S & S Welding June 2014 RM Canwood 332 $ 248, $ 10,000 TOTAL 5264 Acres $ 3,688, Acres $ Lands shaded Red were converted to Reserve by Ministerial Order effective November 17 th, Lands shaded Green are being held by Sturgeon Lake TLE Land Holding Corp. Sturgeon Lake First Nation and Aboriginal Affairs and Northern Development Canada are completing due diligence to convert these lands to reserve. 3

4 LOCATION OF LANDS PURCHASED IN 2014/15 Houses Acquired through TLE A number of TLE land purchases included houses and other outbuildings. It was anticipated that these houses would be suitable as band member housing once the land was converted to reserve. The houses which were obtained and current use are as follows: a. Aynat Agri Ltd.: In order to make it habitable, the existing house required considerable renovations which were completed with Land Holding Corp. funds. The house has since been turned over to the Sturgeon Lake First Nation Housing Program and is presently occupied by a band member. b. Martin: The existing farm house was rented to the farmland lessee for two years but was left vacant when the farmer had health issues and moved. Renovations were undertaken to make the house habitable for a band member. The house is now managed by the Sturgeon Lake First Nation Housing Program due to the land now being converted to reserve. c. Mathewson: Two houses were obtained with this purchase. These houses along with 10 acres of land were offered for sale to band members as a fee simple title. The sale has been concluded to a band member. Expenses were incurred for required repairs to the buildings and survey costs. Sale proceeds have been deposited to the Holding Corp. account and will be returned to the TLE Entitlement Revenue Account at year end. 4

5 STURGEON LAKE TLE LAND HOLDING CORP. The TLE Settlement and Trust Agreements require that all lands purchased using TLE funds be held by a holding company until such time that the land is transferred to Canada for reserve purposes. The holding company is responsible for holding titles to these lands and for land management, including payment of all expenses and receiving all revenue generated from the properties. Sturgeon Lake TLE Land Holding Corp. was registered in The following financial summary is derived from an unaudited financial statement provided by Groenen Accounting. Sturgeon Lake TLE Land Holdings Corp. Income Statement April 2014 to March 2015 Revenues 1. Monea (Grasslands) lease $ 10, Mathewson land lease $ 3, Wright (Aynat Agri.) land lease $ 15, Martin/Gryba lease $ 0 Total Revenue $ 28,923 Expenses 1. Direct Costs (taxes, insurance, repairs, etc.) a. Mathewson land $ 16,619 b. Grasslands land $ 5,008 c. Martin land $ 20,808 d. Gryba land $ 0 e. Wright (Aynat Agri Ltd.) land $ 4,372 f. Aramenko land $ 58 g. Gill land $ 103 Total $ 46, Legal Fees $ 18, Meetings, site visits and land inspections $ 22, Management Fees $ 1, Accounting Fees $ 6, Interest and Bank Charges $ Office $ 448 Total Expenses $ 97,743 Earnings (Loss) From Operations ($68,820) Other Income $33,341 (BCR approved lease revenue received for TLE Reserve lands) Net Earnings (Loss) ($35,479) The loss reported above is the result of lands previously held by Sturgeon Lake TLE Land Holding Corp. being transferred to Canada to be converted to Reserve status. Income previously received is now collected and held by Canada for Band purposes and only accessible through BCR of Chief and Council. It 5

6 is noted that $33,341 was received from the Band last year for lease revenue from the Martin land (now reserve) however in the previous year total revenue received from this land was $105,580. The Land Holding Corp. also incurred expenses to assist the band with upgrades to the house on the Martin land to allow use by a band member. This house has since been turned over to the Sturgeon Lake First Nation Housing Program. It is important to recognize that revenues received as a result of TLE purchases continues to be returned to the TLE Fund to provide for future land purchases. Any income remaining after expenses at the end of each fiscal year is transferred from the Land Holding Corp. to the TLE Entitlement Revenue Account to be used for future land purchases. TLE TRUST FUND AND REVENUE FUND The TLE Trust Agreement establishes two funds: 1. TLE Trust Fund The TLE Trust was established to receive and manage the funds to be received by SLFN is accordance with the Settlement Agreement. The TLE Trust is managed by CIBC Trust Corporation, an institutional Trustee, not by a board of appointed trustees as has been the practice of other first nations. The trustee also manages investment of the funds to ensure SLFN receives the best possible financial returns while the fund is held awaiting purchase of lands. Interest received from investment of the Trust fund is transferred to the Entitlement Revenue Account. The Trustee is not permitted to release any funds except in accordance with procedures and provisions of the Trust Agreement. Funds required to purchase land are released directly to a Solicitor Trust Account. The Trustee, CIBC Trust is responsible for reporting the status of the Trust Fund and will be providing a separate report. 2. TLE Entitlement Revenue Account (ERA) This fund is established to receive interest and dividend revenue from investments of the Trust Fund and is managed by SLFN in accordance with the Trust Agreement. The Revenue Account is used to fund the operations of the TAC and Co-coordinator and has been used to purchase land. In order for the Trustee to release funds into the ERA an annual report must be given to the membership in accordance with Article 4.5 of the Trust Agreement. 6

7 TLE ENTITLEMENT REVENUE ACCOUNT STATEMENT OF REVENUES AND EXPENDITURES Year Ended March 31, 2015 Revenue Income from Entitlement Trust Fund* 0 Land lease Revenue from Land Holding Corp. 40,500 Total Revenue $40,500 Expenses Accounting Fees 2,136 Miscellaneous (legal, bank, etc.) 59 Planning/Co-ordination 53,829 Meetings 17,182 Contracted Services 30,000 Professional Fees (audit) 1,000 Office Rent and Expense 4,430 Total Expenses $108,636 Balance ($68,136) *NOTE: The TLE Trust Agreement requires that the Membership receive a Financial Statement at a Band Membership meeting each year before the Income from the Entitlement Trust is transferred to the TLE Entitlement Revenue Account. There was no Membership meeting in 2014, however a written report was made available to all band members. Although the March 31 st, 2015-year end balance is negative it is noted that the bank account cash balance at November 31 st, 2015 is $273,520. OTHER LANDS CONSIDERED The TLE Technical Advisory Committee, Co-ordinator and other advisors have researched numerous other land selections over the past year; most of which have not been pursued and others which may still warrant further consideration. All of the lands were being considered for potential agricultural lease. The following table provides a brief summary of lands considered in the past year: 7

8 General Location Land Area List Price Comments 1. 2 miles NW of Weirdale RM of Paddockwood 2. 5 miles north and 1 mile west of Weirdale RM of Paddockwood 3. 5 miles north of Weirdale 4. 5 miles north of Snowden RM of Torch River 5. Land scattered over 3 locations (1 near Meath Park and additional 6 miles north an 4 miles east of Meath Park) 6. 3 miles north of Albertville (RM of Buckland and Garden River) 7. 1/2 mile east of Northside along highway and 2 quarters 1 mile north of highway. 8. Gignac Farms 2 miles south of Northside near Highway 2 9. Gignac Farms 1 mile north of Paddockwood miles south of Shipman miles south of Smeaton 12. Spruce Home junction 13. Hoback farmland adjacent to SLFN land in RM of Canwood 3 Quarters (477 Ac.) 2 quarters (219 Acres) 1 quarter (160 Acres) 5 Quarters (792 Acres) 25 full and partial quarters (3818 Acres) 2 quarters (320 Acres) 3 quarters (458 Acres) 9 quarters (1434 Acres) 8 quarters (1227 Acres) 2 quarters (319 Acres) 6 quarters (961 Acres) 1 quarter (145 Acres) 8 quarters (1265 Acres) $ 400,000 ($839/ac.) $210,000 ($959/Ac.) $ 75,000 ($469/Ac.) $ 790,000 ($997/Ac.) $ 2,700,000 ($707/Ac.) $ 170,000 ($531/Ac.) $ 346,900 ($757/Ac.) $ 1,858,800 ($1295/Ac.) $ 1,751,000 ($1427/Ac.) $ 310,000 (971/Ac.) $ 790,000 ($822/Ac.) $1,000,000 ($6896/Ac.) $1,708,500 ($1350/Ac.) Land was unkempt and was low and possibly flood prone in wet years. Home quarter had a number of dilapidated buildings requiring clean-up. Medium quality farmland used for hay and partly cultivated for future field crop. The land was removed from the market unexpectedly by the seller. It may be listed for sale again in Land was being cleared of trees and was very rough. No financial return possible. Variable soil conditions, some good but majority below average. Stubble and burn areas visible, a number of low areas. Price was quite high with a questionable financial return. The vast majority of this land would be considered marginal. It appeared the Seller had assembled this land for speculative resale. Price was high and manageability would be difficult with little to no financial return. From a visual inspection from the abutting roadways it appeared that the entire land area was low and wet. Quarter along highway 50 % bush and cultivated area has numerous small sloughs. 2 adjacent quarters 1 mile north of highway had numerous sloughs and bush areas and was quite rolly terrain. Good Quality farmland and in a good location. Price was high and financial return was uncertain. Medium quality farmland however high price. Medium quality agricultural land at a reasonable market price. Seller accepted another offer. Medium quality land at market price. Land was sold before offer could be presented. Land was not good quality farmland and would have to be used for development purposes. It was not further pursued as financial return was uncertain. This land was considered in 2011, however negotiations were unsuccessful. The land was again listed for sale in 2015 but an offer tabled by SLFN was not accepted. The land has since been sold. 8

9 CONCLUSION The TLE Trust Agreement requires that any purchase of land of more than $250,000 must be approved by Band Membership. This complicates the ability to commit to purchases which are in excess of $250,000 as there have been no band membership meetings in the past year. Acquiring Agricultural lands with economic return is challenging, requiring the utmost in due diligence. Land prices have risen faster than farm land lease rates which equates to a lower rate of financial return. The price for land used to determine the cash settlement provided to SLFN at the time of signing the TLE Settlement Agreement ($265/acre) is nowhere near the present value for quality agricultural land in Saskatchewan ($1178 per acre). As a result, it will be necessary for SLFN to build the settlement fund through revenues from land purchases. This may require consideration of not only agricultural lands but also commercial development land that may provide a greater return on investment. Land values have continued to increase at a rapid rate in 2014 as illustrated in the chart below from information provided by Farm Credit Canada. Market Values referenced in the chart reflect the actual price paid for land averaged throughout the province. $1, $1, $1, $1, $1, $ $ $ $ $- Saskatchewan Agricultural Land Change in Market Value by Year Market Value in Dollars per Acre Farm Credit Canada Spring 2015 Farmland Values Report 9

10 NOTES: Acronyms used in this report: SLFN Sturgeon Lake First Nation TLE Treaty Land Entitlement TAC Technical Advisory Committee Definitions of Land Survey terms used in this report. One Section is 1 mile X 1 mile (1 square mile) and contains 640 Acres of land. One Quarter section is ½ mile X ½ mile and contains 160 Acres of land For more information contact Denton Yeo, TLE Co-ordinator/Consultant Sturgeon Lake First Nation c/o P.O. Box 2985 Prince Albert, SK S6V 7M4 Phone/Fax: dryeo@sasktel.net 10