General Information

Financial Review

In fiscal year 2014–15, school lands generated gross revenues of $7.8 million for CalSTRS, a decrease of 24.3 percent from the previous year. Gross revenue to CalSTRS from solid mineral leases decreased substantially from $1,673,233 the previous year to $712,157, a 53 percent decrease from the previous year.

The decline in production at the Mesquite Gold Mine is the primary reason for the marked decrease in royalty revenue, as well as lower demand for aggregate resources such as sand and gravel. Oil and gas lease revenue also decreased to $1.43 million this year compared to $2.49 million last year due to lower production and lower oil prices.

As shown in the table below, the revenue distribution from geothermal leases contributed 68 percent of revenue (versus 56 percent the previous year), solid minerals and surface rentals combined to contribute 13 percent of revenue (versus 19 percent the previous year). Oil and gas contributed 18 percent this year (versus 25 percent the previous year).

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Expenses for the program have averaged $1.08 million per year over the last 10 years and in fiscal year 2014-15, the expenses for the program were $1.2 million. As a percentage of revenue, expenses increased by 2.7 percent from the previous year. This was primarily due to State Land Commission staff’s heavy time and resource commitment to participation in the Desert Renewable Energy Conservation Plan. CalSTRS Real Estate investment staff is actively discussing expense containment with SLC staff.

Net revenue to CalSTRS decreased this year by 24 percent to $6.5 million from $8.6 million last fiscal year due to the decrease in revenue from solid minerals from the previous year. As of June 30, 2015, the School Land Bank Fund had a balance of $2,414,004, an increase of $1,683,995.89 over the prior year. The balance reflects a $59 million loan to the California General Fund in 2008.

The loan, including interest, is due to be repaid on June 30, 2016. Interest on the loan accrues at a rate set by the Pooled Money Investment Board. The annual yield for fiscal year 2014-15 was 0.269 percent and accrued $6,240.00 in earned interest.

 

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