The daily Astorian., October 22, 2019, Page 5, Image 5

A5
THE ASTORIAN • TUESDAY, OCTOBER 22, 2019
Forestry: Pension expenses are a problem — a big one
fi nancial projections. That
came on top of long-stand-
ing and unanswered requests
for accurate modeling of the
agency’s timber inventory
and sustainable harvest.
“I’m being told by staff
that we’re going to fall off
a fi nancial cliff,” she asked.
“Where is the cliff and how
long is it going to take get
there? What are the causes?
Understanding the causes,
what levers can we pull?”
Jim Kelly, a board mem-
ber from Eastern Oregon,
asked staff repeatedly over
the past six months for an
accounting of just one expen-
diture — pension costs — to
determine if they were con-
tributing to the division’s
fi nancial woes.
After he asked the ques-
tion in three consecutive
board meetings, and after
The Oregonian repeated the
request, staff fi nally provided
a cut and paste explanation
from the PERS website about
how employer’s contribution
rates were set. No specifi cs
included.
“I never got anything use-
ful,” Kelly said. “I don’t
know the answer.”
Continued from Page A3
and 285 million board feet
in 2019. The average harvest
volume over the last fi ve- and
10-year periods is above the
level that agency leaders say
they’re selling.
Agency fi gures also show
that since 2008, it has shifted
its harvests to focus on clear-
cuts. More selective, par-
tial cuts or thinning have
declined dramatically.
“We’re
high-grading
the forests,” said Williams,
the forestry board member,
using industry lingo for cher-
ry-picking the most market-
able stands of trees.
The tactic appears to work.
Buoyed by a spike in both
volume and timber prices, the
agency generated a $15 mil-
lion profi t on its $47.2 mil-
lion share of harvest reve-
nues in the year ended June
30, 2018. Results were even
better in fi scal 2019, with a
$19.1 million profi t on rev-
enues of $51 million. The
agency’s formerly depleted
reserve account has now bal-
looned to nearly $50 million
– an astounding turnaround.
Still, agency offi cials say
that’s not a sustainable strat-
egy. Timber prices won’t stay
high. The supply of high-
profi t tree stands are limited.
And they can’t delay forest
management projects indef-
initely without undermining
the health of the forests – and
in turn, future revenues.
Even with $50 million
in reserves, leaders say they
can’t afford to take on one
of its key strategic priorities:
restoring the Tillamook For-
est. The forest is ground zero
for Swiss Needle Cast, a fun-
gal disease that stunts Doug-
las Firs, dramatically reduc-
ing harvest yields. Likewise,
a quarter of the Tillamook is
dominated by stands of alder
that are losing value as they
age and lose treetop branches.
The best way to deal with
both problems is to cut the
stands and replant. But the
agency says it can’t afford
that fi x because the cost
Beth Nakamura/The Oregonian
The Oregon Department of Forestry has worked on a new forest management plan that
supporters say would increase logging and habitat protections and save the agency money.
would exceed its share of the
logging revenues.
Leaders can’t dip into the
state forest division’s reserves
to fund the restoration either.
They’re using that account
to weather the next indus-
try downturn. Besides, more
than half the money isn’t
available. The agency has
already borrowed $27 million
of it to cover uncollected fi re
costs – expenses the state for-
est division is not responsible
for covering.
Expenses outpacing
revenues
The seven-member for-
estry board is charged with
fi nancial and policy oversight
of the department. But the
group, led by businessman
Tom Imeson, lacks a compre-
hensive understanding of the
state forest division’s budget
problems.
Some openly speculate
that the crisis is manufac-
tured, or that it’s only being
staved off by the cost cut-
ting and cherry-picking high-
value trees, which will even-
tually create an ecological
crisis.
They say they don’t have
enough information to tell.
And they’ve been frustrated
in their attempts to get it.
Their concerns were
amplifi ed last month when
they read about another major
fi nancial issue in The Orego-
nian. Daugherty, the state for-
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questions.
ester, had not fully informed
them the agency was strug-
gling to recoup more than
$100 million it was owed
from fi ghting wildfi res –
some of the bills had yet to
be invoiced and dated back
to 2015. The situation is so
bad the agency is borrowing
money from the Department
of Administrative Services to
meet payroll.
Hence the raid on the state
forest division’s fi nancial
reserves to prop up agency
operations.
Brenda McComb, a retired
forestry professor from Ore-
gon State University, told
Daughterty at the retreat
that she was frustrated they
weren’t provided long-term
Working toward a
solution
Pension expenses are a
problem – a big one.
Based on its most recent
budget request for 2019-21,
the state forest division’s pen-
sion costs were expected to
have increased by more than
250 percent since the 2009-
2011 biennium.
So are the agency’s fi re
costs – in particular, how they
suck away dollars from other
forest programs.
The agency doesn’t track
how its non-fi re divisions
subsidize fi re costs. But the
fi re program draws heav-
ily on staff from across the
agency during wildfi re sea-
son, emptying the hallways
and bringing work on other
initiatives to a near halt, often
for weeks at a time.
A 2016 Secretary of State
audit found other programs
were subsidizing fi re costs,
including training, staff fi re
equipment and supplies, spe-
cialized trucks, upgraded
radios, discounted equipment
rental rates and administra-
tive overhead.
Despite repeated requests
over a period of months from
The Oregonian, agency offi -
cials said they could not
provide a line item report
tracking the division’s indi-
vidual expenses, including
the PERS and fi re fi gures, or
how they had changed over
time.
Agency leaders said they
don’t track expenses in a for-
mat that allows them to pro-
duce a report detailing them
over time. Instead, they pro-
vided the news organization
with a summary of expenses
in three broad categories —
personal services, services
and supplies, and capital out-
lay — and how much they
increased between 2011 and
2016.
In general terms, the
agency did say that the cost
of its recreation program,
endangered species moni-
toring, fi re protection and
reforestation have all been
increasing. They also point to
growing administrative costs
and the standard infl ation for
salaries and medical costs.
But the fi gures were often
non-specifi c and outdated, if
they were provided at all.
Tom Imeson, the for-
estry board chair, says the
agency has been looking for
a viable solution to its bud-
get problems — one that can
also boost conservation out-
comes — ever since he was
appointed in 2012.
“To say our inability to
develop a solution to this
problem has been frustrating
would be a massive under-
statement, but I don’t believe
it is the result of a failure to
understand the economics.”
he said. “If we conclude that
we cannot do so, we will
need to explain why not and
offer suggestions for other
tools that are beyond our cur-
rent authority.”
Thank you so very much to the
Olney Walluski Fire Department
and assisting agencies:
Lewis & Clark, Astoria, Warrenton,
Elsie, Seaside, Gearhart, and
Knappa for fighting our
large shop fire.
Philip Mote is vice provost and dean of the Graduate
School and remains active in the Oregon Climate
Change Research Institute (OCCRI) and the
NOAA-funded Climate Impacts Research Consor-
tium (CIRC) for the Northwest. He is very active in
leadership of the 60,000-member American Geo-
physical Union, as President of Global Environmental
Change, member of the Council, Vice Chair of the
Council Leadership Team, and a member of the Board.
Philip was the founding director (2009-19) of OCCRI
and remains involved in communicating climate
science within Oregon.
He earned a B.A. in Physics from Harvard Uni-
versity and a Ph.D. in Atmospheric Sciences
from the University of Washington.
Columbia Forum Sponsors:
• The Astorian/Coast River Business
Journal
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• Cannery pier Hotel and spa
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Philip Mote, Oregon State Climatologist
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