A sunset clause is now included in the controversial contract over management of the funds raised by the sale of 265 cabin sites at Canyon Ferry Reservoir a decade ago.

The Montana Fish, Wildlife and Parks Foundation's contract will end on Dec. 31, 2009, according to Mike Ryan, Great Plains regional director for Interior's Bureau of Reclamation (BOR).

It previously had no ending date, or performance standards, regarding management of the trust fund, which ranges from $15 million to $20 million, depending on the stock market.

During the past five years, the contract has garnered the foundation about $652,000 and is its main source of cash income. An additional $350,000 was paid to D.A. Davidson via the foundation to manage the investments.

Local authorities who deal with the trust said it can be managed at a fraction of the price, but Montana Fish, Wildlife and Parks Foundation board members disagreed and said that without an end date, the contract would last forever.

The trust was established by the Canyon Ferry Reservoir Montana Act of 1998, using the proceeds of sales from federally leased cabin sites at Canyon Ferry Reservoir. In 2002, the FWP Foundation was selected as trust manager to administer the permanent source of funding to enhance public hunting, fishing and recreation opportunities in the state of Montana.

For years, the foundation fought changes to the contract, including four negotiation sessions during the past four months.

But Ryan said that section 6.2 of the contract gave Interior the ability to amend the agreement at any time. Interior headed the negotiations since the cabin sites used to be BOR property; those discussions concluded at an impasse in November.

Ryan had tried to convince the foundation to accept a lower rate of compensation since most of the setup work for the trust already had been accomplished.

Foundation members argued that their rate was what the market would support, and that they also were being compensated for work done prior to any income from the sale of the cabin sites.

Ryan said that including an end-date in the contract will allow the two local boards who oversee the trust to solicit new bids for future management.

"We tried hard to come to an agreement with different modifications, but couldn't. So we'll live under the existing methodology until next year," Ryan said. "There were six or eight points we were trying to address and couldn't, and nobody likes an agreement where people are at odds.

"So we said the best thing to do, before everything gets nasty, is to say 'let's end this agreement.' We'll give it another year, which will give the (local) boards the opportunity to write a new contract."

Foundation Executive Director Spence Hegstad said he hadn't seen the letter from Ryan announcing the change, nor has he discussed it with his board members, so Hegstad isn't sure how the foundation will respond.

"He called me yesterday to tell me it's coming, but we haven't seen it yet," Hegstad said. "I can't tell you at this point what we will do."

Members of the two local boards - the Citizens Advisory Board (CAB) and the Joint State-Federal Board, said they're pleased the contract has an ending date, even if other issues weren't resolved.

"From the BLM (Bureau of Land Management) perspective, all we ever thought the real agreement needed was an ending date," said Rick Hotaling, the BLM's field manager in Butte who sits on the joint board. "It was, to us, highly unusual that we would have an agreement that would go on with no ending date or performance standards. From day one, we wanted an ending date."

Bill Orsello, who sits on the CAB, added that the one reason the contract needed to be renegotiated is - now that the trust is set up - his group wants to see more money spent on on-the-ground projects and less on management.

Ryan and others think they can contract with another organization for somewhere around half of what the FWP Foundation is charging.

So far, about $2.1 million from the trust has gone toward projects that improve wildlife and fisheries habitat, plus improve access and opportunities for outdoor enthusiasts. However, there is concern this year that no money will be available for projects due to the downturn in the stock market.

Orsello added that the concerns about end dates and compensation, as well as differences over the duties the foundation would perform, led to strained relationships between the organizations.

Those difficulties led to both the CAB and the joint board to ask the Secretary of the Interior for help in 2005.

That request prompted Deputy Secretary of the Interior Lynn Scarlett to create two new federal oversight boards to help with contract negotiations, which then caused Sen. Max Baucus, D-Mont., to ask Interior's Office of Inspector General to look not only into the contract agreements, but also the new boards.

Baucus and others fear the two federal boards would wrest control of the trust from the local organizations.

In a letter to Baucus, the Inspector General's office noted that there is an inherent conflict of interest with the foundation as trust manager, since it was supposed to raise or manage funds for two organizations with similar interests.

In addition, the Inspector General urged the Secretary of Interior to terminate the trust agreement with the foundation, abolish the two federal oversight boards and appoint an executive director or trust manager based on recommendations from the local boards.

Ryan said the sunset clause satisfies part of the recommendation, and the two federal groups will be disbanded unless their aid is requested in the future.

He added that hiring an executive director or trust manager is now up to the two local boards.

Mike Cole, Townsend district ranger for the Helena National Forest, is chairman of the local Joint State-Federal Board, and is pleased to hear oversight of the trust will be left to people who live in Montana - which was the intent of Baucus' bill that allowed for the sale of the federal lands at Canyon Ferry in the first place.

"There were too many hands in the process," Cole said. "We have a lot of work to do in this next year to get ready for the changes, but I think we're ready for that.

"I'm looking forward to next year because we'll finally have some resolution to this after going through all those negotiations. We finally have an answer instead of living in limbo."

Reporter Eve Byron: 447-4076 or eve.byron@helenair.com