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About Spilyay tymoo. (Warm Springs, Or.) 1976-current | View Entire Issue (Dec. 20, 2007)
Page 9 December 20,2007 Spilyay Tymoo, Warm Springs, Oregon W S F P I : report recommends significant investment in mill (Continued from page 1) The strategy g ro u p . found that different interpretations o f IRMP guidelines, ,a cumbersome timber sale planning process, competing interests, and lack o f sufficient forestry data were all hampering WSFPI on the raw material side. The report pointed- out that these problems have a long his tory. Two prior studies, con ducted in 1990 and 1995, have undertaken to solve them with very limited sustainable success. '“Even if the tribe had no mill, it would still want to man age its timber holdings in the most efficient way consistent with its environmental and cul tural standards,” saidTomjackin ari interview after giving the team’s report. “ There’s quite a bit o f room for management to improve and get m ote revenue' fro m the tribe’s timber.” . According to Tomjack in giv ing the report, none o f the agen cies involved in reservation for estry were keen.about theteam’s recom m endation to create a new timber management enter prise with sole responsibility for the working forest. “N ob od y likes this p ro posal” he said. “But the tribe needs to have ope. entity in charge, one entity that answers tty the tribe fo r executing its policy. Then if that enterprise does a bad job, you know who’s responsible and you, can hold them accountable,” Mill Operations The strategy team had shared its forest management findings wjth Cpuncil in an interim re port, in late November.•■■;.Cpnse- port dealt with die pplfem* d ji O ver the past, 20^ .years, WSFPI bas fallen through the ranks, from beiiig one- p f the o f the mill, and getting firiànc- % Flood Johnson, journeyman.millwright, is among the 120 people who work at the mill. (Also pictured are Dave Reynolds, Gerald Sampson and Emerson Culpus.) most technologically efficient M ore fundamentally, how mills in the hforthwest to one ever, failure over the years to o f the least efficient, according reinvest capital into new equip- to the report-. Uient for the mill is coming back -In six o f the past seven, years to. haunt the tribe. : WSFPI has lost money, averag WSFPI’s madiinery was not ing $2 milHon. ineachj®?the two designed to efficiently process previous years, and another $2 today’s stpall-diam eter logs*. million through October 2007. Arid the number o f smaU-diam- TheSe losses are in addition eter logs keeps increasing. to approximately $2 million per “The small logs have been year o f tribal support through killing the mill,” saidTomjack. reduced log prices. “Even a ohe-inebr^s^fi: ddtyriiri The poor market conditions diameter size costs about a riiil- : ¡tbafthaye previifiedrinc'e the end : of';- d2’0 0 6 o • have ;■ .Vrbrstened I gettingluityDe i/ahd >me£$ srtiall throughout 2Ö07 and have out logs. Without the machiheryro paced operational, im prove process, those logs* efficiently, ments;’ WSFPI will n o r be able to com- Commercial Code (Continued*;from page 1 ), “ Secured transactions oil personal property might be morny, but they’re aisb a p fe otal part Of the overall code. T h e absence o f ¿ personal1 property section has caused difficulties fo r tribal mem bers who try to get consumer financing, open and operate small businesses on the* res ervation, access banking ser vices, Or find steady employ ment. AmOng the benefits ex pected from the persorial property secured transactions code are that it will: $jj Create m ore ¿nd better Borrowing opportunities for tribal members for items such as cars, appliances, and Small; business inventory. Provide an adequate rem edy to creditors (such as banks, car dealerships, whole salers) in case a tribal mem ber borrower defaults pn a loan, making lenders more comfortable and more likely to lend money to tribal mem bers. E n ab le banks and car dealerships to locate on the reservation. ÉE Help tribal membefô.arid small business owners estab lish;, good crédit and become . better able to borrow addi tio n al funds fro m o th e r sources fo r expansion or other projects. • Help eliminate usury (high interest rates* compared to maiket rates o f f the reserva tion) w hen creditors lend money to tribal members. Cases at tribal court Despite the potential upside to members, implementing a personal property secured trans actions cope has been contro- . yersiaL | The tribe has hesitated to ex ercise th e jurisdiction o f its court over non-tribal members. A nother issue has been that some' members view the reser vation as a safe haven when they default on personal debt. The new code Will allow off- reservation cteditOfs to make, and possibly win their Case in tribal Court. Í*; “Tribal members heed to know that these secured trans action laws will be applied fairly and con sisten tly^ said. J e f f Anspach, chief executive officer o f Warm Springs Ventures and a - m em ber o f the A d v iso ry Committee. “No matter how good this code is, if it’s not administered fairly it won’t work,” he said. “Lenders will learn not to trust it and we’ll be right b^ck where we started, unable- to borrow mpney at reasonable rates.” That said, the advisory com m ittee to o k care to p rotect people on the reservation. * ; “We did ouybest to praft this code in the m ost beneficial way f o r trib a l m em bers,” said Anspach. “For instance, our law will not allow creditors to just .;,:.cóíúe on the reservation and re- . possess whatever they think they have a right to. Instead, they’ll have t o go « t o tribal court and get an order, for the yeturn o f secured property.” In developing the commer- cial code, the advisory com mittee looked to similar laws used by the United States and by other tribes, and in par ticular the Model Tribal Se cured Transactions A ct that was- developed by the Na tional Conference o f Com missioners on Uniform State Laws: ‘ T he B IA con trib u ted funding to review the Model Tribal A ct for- use at Warm Springs. “: “The Model Tribal A ct shortens and simplifies the federal law, making an eàsier- to-Use version,” said James. “But the one we ended up with was' even shorter and easier to use than the Model. Códèv We adopted the apr próach that we can add pro visions later i f we need to. Let’s start with something everyone can understand and get used to easily”. T he advisory committee tested the new Warm Springs code by asking selected lend ers to review it and determine whether they would be com fortable making loans based on it. “That didn’t work out the w ay we h o p ed ,” said Anspach. “ Basically they told us, the pro of is in the pud ding. W hat matters is not w h at, the law says, but whether it’s* applied fairly by the courts. I have confidence our courts will follow the rules, but only time will tell w h eth er this code really works for the tribe.” plete. •Last spring CEO Mark Jack- son formed a WSFPI Technol ogy Team and engaged LD Jellison, Inc., an engineering consulting firm, to assist the mill with new technologies, equip-, . ment.cop^jgurgtions, and sug gested improvements. * Working closely with Jellison, the team came' forward with a - proposal for a new small log line ; anchored around a Contact DDSfr-12 single-pass saw, “The new mill looks good on paper,” said Tomjack in his re port. ‘T he financial projections show that it would be profitable under most circumstances.” But the team was not prepared, to* recommend the new mill just yet. \ “There are a number o f im portant business considerations that the tribe needs to address before deciding to go ahead with an investment o f this size,” said Tomjack. “You’d be changing tael i redouble tour productivity,”* said f- .m oving *dway t firofet sspeeiaity Jackaon. “We would go from products arid committing your processing less than 5 small logs self to competing more in the per minute on the existing small commodity market. That re log rpill to over 15. A second quires aggressive- management shift at the planer- would be and very tight operating stan needed to handle the increased dards. You’d tided a lot more output. We’d have, challenges logs to wood ¡this mill and you’d related to purchasing more non !.have "to; go get them off-reser reservation logs, longer hauls, vation. I f s all doable, but it’s not and the sale and marketing o f ■ easy” | ' larger lumber volume. But in our ; O ther business consider area, most mills don’t have large ations that Tomjack said should forest holdings and they pur factor into the investment deci chase logs for their entire shifts.” sion had to do with managing - The new logline is estimated the more complicated logistics to cost $15 million to purchase o f higher log arid lumber vol and install, With another $5 mil umes, stepping up sales’ and lion needed to cover related rnarketing efforts, negotiating a costs such as financing, log yard new working capital arrange improvements, additional rolling ment with the bank^ intensify- stock, and so 6rir*,,& ; ing management 6 f all aspects He also pointed put that the .tribqcpuld not then sitbackand let this'new mill go for 20 years without further investment. ‘Additional investment in the near future will be required to maintain the competitive edge you get from the DDM^” he said. “That’s the ballgame you’ll be playing in.” The strategy team recom mended that the tribe proceed With caré in making this invest m ent " The report advised that if the tribe considers the investment seriously, it should be prepared to supply W SF P I w ith 5d- MMBF ofìogs in 2008-09 o f a diameter size that maximizes the operating results o f the existing mill. t “That’s the only way the mill has a shot at breaking even,” Tom jack explained. W SFP I would also have to bring back a plan that provides for cash flow breakeven during 2008-09, and prepare a’ thorough capital re quest and financing plan. ; A t the con clu sio n o f Tomjack’s report, Council mem bers asked several questions and made comments that showed they w e t , e ready to give thought ful consideration to the issues surroumling the f w A'work- shop session was planned for late Januaryto go over the strat egy report in more detail. /: •Jn the, meantime* Council , ^§ked J^obson to begin work on the bridge plan to stabilize ex isting operations, consider other revenue generating opportuni- - ties, and assess near teym busi ness Options or market condi- ; lions until a longer term strat- ¿flgy antyj^poi?adtyptpd-H ::t •-“WtyhaYe; developed aibtisi- ness i strategy, that matches the mill to our ¡forest, and those around us ” said Jackson. “It will , Jeàd us . to become a profitable company. Yes, it is a change from how we have operated in the past, but it also provides far greater opportunity fo r .success and profit for the mill and tribe. Through the entire year WSFPI employees and loggers;?have worked extremely hard, brought in new ideas that have improved our company. I continue to be impressed by them. These are ' very difficult times, requiring very thoughtful decisions. This Christmas season and through- .'•tìut ’theityeàr, I pray the Lord guide us alongfour way. M erry Christmas and G od bless.” C-hrtslntas Ipfct £¡j Happy Holidays £rom Ralph’s T V and Furniture We personally invite you to come draw your DISCOUNT your Christm as H oliday Furniture purchase. Discount Coupons are valid through Decem ber 31,2007, on your next Furniture purchase. Selected Appliances & Electronics ON SALE Must be 18 o r older to participate. Six months same as cash to qualified buyers. R ALPH 'S & 9 FURNITURE a m - 6 pm M -F 9 a m - 3 p m Sat. C lo sed Su n days 525 S.E. 5th St., M ad ras OR 475 -_ 9 Sale Ends December 31, Serving Central Oregon Since 1974.
