by Ted Sickinger
November 8, 2019
Oregonlive

A  group of retired foresters backed by the timber industry filed three initiative petitions this week looking to counter what they say are “radical anti-forestry ballot initiatives being pursued by environmental extremists.”

The measures would give Oregon counties and the wood products industry more control over how members of the state Board of Forestry are selected. They would amend the state constitution, requiring the state to fully compensate woodland owners for any new regulations that eliminate their ability to log, such as expanded no-touch stream buffers. And they would require that the forestry board use “non-biased” and “peer reviewed science” to come up with consensus-based policies.

Jim James, a forestry consultant and executive director of the Oregon Small Woodlands Association, is one of the chief petitioners. He said he was not acting on behalf of the association, though it is mentioned in the initiative petitions. The Oregon Forest Industries Council, a timber industry trade group, is serving as treasurer of the campaigns.

“I’m a professional forester and have had a long career in the industry,” James said. “When I became aware of the three anti-forestry ballot measures, I became very passionate about how wrong those were and I reached out to others to push back on these absolutely crazy initiatives they proposed.”

Environmental groups filed three ballot measures earlier this year to tighten aerial herbicide spraying rules, increase forest stream buffers, prohibit logging in steep, landslide-prone areas, and prohibit conflicts of interest for state forestry board appointees.

Secretary of State Bev Clarno rejected all three petitions, saying they violated rules that prohibit measures that address more than a single policy topic. Environmental groups are taking her to court over that decision, but have since filed new versions of the petitions that they claim address Clarno’s concerns.

Now the forestry groups have filed their own countermeasures.

The dueling ballot measures go the heart of the timber tug of war that has been playing out in Oregon for four decades. Once centered on the decline of logging on federal forests because of endangered species concerns, the divide over policies also spread to private and state forests. Indeed, that partisan divide could become a deciding factor in how the legislative session plays out next year, with likely battles over climate change policies and wildfire funding.

As it stands, the controversy is currently being spotlighted in a $1 billion lawsuit in which 14 rural counties are suing the state for breach of contract, saying it has failed to maximize logging on state forests.

Environmental groups have long contended that Oregon has some of the weakest forest protection rules in the West. They say the rules fail to ensure the protection of endangered species and their habitats, as well as the health and safety of rural residents. They describe the forestry ballot measures as a power grab by the industry that would limit the discretion of the state board, and possibly lock the state in the same constitutional debate over property rights and land use safeguards that came with the 2004 passage of the far-reaching Measure 37. Voters subsequently overturned most of those reforms with the passage of Measure 49 in 2007.

“With this measure, industry wants to change the Oregon constitution to make Oregonians pay them to not pollute rivers and streams with excessive clearcutting on steep slopes, said Ralph Bloemers, senior staff attorney for the Crag Law Center, a non-profit that represents conservation groups and local residents throughout Oregon.

“They expect to be paid if Oregonians decide to limit their ability to spray toxic chemicals near drinking water supplies, homes and schools,” he said. “I don’t expect Oregonians will be fooled twice.”

James, meanwhile, insists that there is no scientific evidence that wider stream buffers would help salmon habitat, as environmentalists contend. He says the new regulations proposed in the environmental petitions would prevent active forest management in many areas, cause more wildfires, and result in an uncompensated taking of land from private owners. And while he could not cite a specific example, he said the forestry board’s policy-making has been hobbled by a divide among conservation and industry-oriented members.

“If there was more of a collaborative model,” he said, “things would happen more quickly and they would be more balanced and fair.”

By Rob Davis
Oregonlive
October 30, 2019

Oregon Attorney General Ellen Rosenblum is refusing to defend Secretary of State Bev Clarno in litigation over Clarno’s unprecedented rejection of three proposed ballot initiatives to tighten state forestry laws.

Rosenblum also challenged Clarno’s legal basis for tossing the proposals, which Clarno said violated a state requirement that legislative measures stick to one subject. The rule applies equally to voter initiatives and bills in the Legislature.

“There is no question that, under current law, the legislature could pass a measure such as this one and it would be in full compliance with the ‘single subject’ requirement,” Rosenblum told The Oregonian/OregonLive in a statement. “I do not believe there is any compelling reason to argue for a change in the current law.”

Rosenblum said she couldn’t represent Clarno because the Oregon Legislature is also a client and she didn’t want to make arguments that would impede its work. She said she authorized Clarno to find another lawyer due to the conflicting interests.

Clarno did not respond to a request for comment. Her deputy, Rich Vial, declined to answer questions.

The decision by Rosenblum, a Democrat, is unusual, pitting two of Oregon’s top elected officials against one another.

Clarno, a Republican who has taken $36,000 in donations from timber interests in her career, is not backing down in a suit brought by environmental advocates trying to ensure their original petitions advance.

She will instead be represented by Schwabe Williamson Wyatt, a Portland law firm that advertises itself as “one of the nation’s top timber law practices” and says it is part of the fabric of the timber industry. The firm says on its website it is “involved” with the Oregon Forest & Industries Council, one of the leading opponents to the ballot measures.

Clarno on Sept. 24 rejected Initiative Petitions 35, 36 and 37. The measures are substantially the same, calling for tightening the state’s aerial herbicide spraying laws. They propose more logging restrictions in steep, landslide-prone areas. They would prohibit conflicts of interest for state forestry board appointees.

Clarno rejected the initiatives proposed by environmental advocates, including the group Oregon Wild, saying each of the proposals covered more than one subject. The Oregon constitution says a ballot initiative can only address a single policy topic. The same ballot initiative couldn’t raise the minimum wage and ban the death penalty, for example.

No other ballot measure has ever been rejected by the Secretary of State on single-subject grounds, two election lawyers have said.

Vial, Clarno’s deputy, is a former Republican lawmaker who took $19,000 from timber interests in his career.

Vial would not say how the law firm retained by the Secretary of State was being paid. He would not explain why the Secretary of State is litigating a case the state’s lead attorney has opined has no legal justification.

Former Oregon Supreme Court Justice Michael “Mick” Gillette is representing Clarno’s office for the Schwabe law firm. Gillette declined comment.

As a justice on the Oregon Supreme Court, Gillette wrote the landmark 1997 ruling that eliminated Oregon’s campaign contribution limits. The decision allowed Oregon to become one of the biggest money states in American politics, one where today the timber industry gives more than anywhere else in the nation.

Rosenblum’s full statement is below.

My office represents both the Secretary of State and the Oregon Legislature. Our overarching client is always the State of Oregon, however. As the chief law officer of the state I have reached the conclusion that the Secretary of State is entitled to hire conflict counsel in this matter. This is a brief explanation of this decision.

The Oregon Supreme Court has said that the ‘single subject’ requirement in the Oregon Constitution that governs the initiative process is to be given the same interpretation as the ‘single subject’ requirement that applies to the legislature. There is no question that, under current law, the legislature could pass a measure such as this one and it would be in full compliance with the ‘single subject’ requirement. I do not believe there is any compelling reason to argue for a change in the current law.

Under the circumstances I concluded that we would not want to make arguments detrimental to our legislative branch client (although the legislature is not currently a party to this litigation) in order to defend this executive branch action. I authorized Secretary Clarno to obtain conflict counsel, which will allow her to present her view of the ‘single subject’ requirement to the courts for their consideration.

By Ted Sickinger
October 20, 2019
OregonLive

Oregon’s state forests are supposed to be managed to deliver a balance of benefits, from sustainable timber harvests to habitat for fish and wildlife, from clean air and drinking water to well-managed recreation spaces.

But the Oregon Department of Forestry is failing on almost every front.

The reasons are numerous, but stem from structural issues exacerbated during the last decade by ineffective management at the agency, ineffectual oversight by its seven-member board and inaction by the governor and legislators.

The agency’s state forest division budget is almost entirely dependent on timber sales, a volatile revenue stream that it can’t control and is subject to market swings, political agendas and legal challenges. The division gets no money from taxpayers, but is asked to provide services that cost millions of dollars annually and generate little or no revenue. Meanwhile, two-thirds of the timber sales it does generate go directly to 15 counties and the taxing districts where the logging takes place.

Since the 2008 recession, agency managers have warned that budget formula no longer works, leaving them operating at the edge of a financial precipice.

In response, they’ve axed staff, frozen programs and cut more trees. They’ve reduced the amount of forests set aside for conservation. They’ve deferred investments necessary to ensure future forest health and productivity. And they’ve skimmed the cream off their available “inventory,” targeting accessible clearcuts of large, high-value trees to quickly generate more profitable sales.

Those aren’t sustainable tactics, much less the durable long-term strategy to increase both financial and conservation outcomes that the division has been directed to develop since 2013, but has so far failed to deliver.

It’s unclear that such a balance can be achieved. Tradeoffs are inevitable. That’s why the current strategy – laid out in a document called the forest management plan — has become a zero-sum game, pitting rural counties, their schools and jobs against conservation, recreation and clean water.

Failing forestry: Oregon forest management plans forever in the making

Gov. Kate Brown asked forestry department leaders to create a new management plan that consultants say will save the agency money, allow for more logging, and promote better, legally defensible conservation. But the agency hasn’t prioritized the request.

The policy mess will be showcased in a trial starting this week. Fourteen of Oregon’s 15 “forest trust land” counties are suing the agency, arguing they’ve been shortchanged $1.4 billion in logging revenues. Bankrolled by private timber companies, the counties claim the state breached its contract with them by failing to maximize harvests on state forests since 2001. Many observers expect the agency will lose.

Conservationists and environmental groups are deeply unhappy with the agency, too. They’re convinced the state is already cutting at unsustainable levels to backfill its budget and is serially manipulating what it’s promised to protect so it can keep up the pace. They contend the logging on state forests threaten endangered salmon runs, wildlife habitats and clean water. To stop that, they’re suing to block 68 proposed timber sales.

And pressures are building within agency leadership. At an Oct. 9 planning retreat for the Oregon Board of Forestry, members complained of being stonewalled by staff on requests for basic financial and scientific information. Members of the oversight board said State Forester Peter Daugherty had failed to fully inform them of critical financial problems. And they said relations among board members had become dysfunctional.

Cindy Williams, a fish biologist from Medford who has served on the board for seven years, said it had been a tension filled year that left her feeling she had to “bulldoze my way into the conversation” to raise concerns.

“Something fundamental in the board attitude has changed,” she said, “and we need to address it.”

Valuing state forests

The state forest division’s mandate is to manage its public land for the “greatest permanent value” to the state of Oregon. Yet the exact meaning of “value” — and to whom it should go — is a controversial question.

It’s also unclear how much Oregon’s state forests have to give.

Many Oregonians rely on state forests as a place to hunt, fish, hike and camp — activities that cost the division millions of dollars a year to manage, but generate little revenue to offset its growing costs.

Oregonians also cherish wildlife habitats within forests like the Clatsop.

But the Clatsop is also the money-basket of the state forests. To improve the agency’s bottom line, forestry officials have systematically reduced their commitment to conserve parts of it, from 50% of the land base in 2003, to 40% in 2009 and to 30% in 2011.

The need to squeeze money from forests is fueled in part by a promise made nearly 80 years ago with Oregon’s 15 so-called “trust land counties.” In exchange for taking over hundreds of thousands of burned-over, logged and unproductive acres of county-owned forestland, the state agreed to rehabilitate them, protect them from fire and share the proceeds of future logging. Those revenues are critical for cash-strapped rural counties and support everything from public safety to education. And the forest products industry, despite its rapid decline over the last four decades, still provides those counties with some of their best paying jobs.

Daugherty, Oregon’s state forester since 2016 and an agency employee since 2007, acknowledges the dilemma.

“There’s a finite amount of state forests, and they can only produce a given suite of goods and services,” he said. “There are certainly tradeoffs.”

Sketchy swaps

Bob Van Dyk picks his way up a hillside in the Clatsop State Forest. He pushes through the undergrowth, grabbing ferns and shrubs for handholds as he clambers over downed trees.

Fifty yards in, he stops next to a towering Douglas Fir with a trunk nearly 10 feet around.

“We’re in one of the very rare patches in the north coast of forest that has some genuine old growth characteristics,” said Van Dyk, policy director at the Wild Salmon Center, pointing out the mix of tree species and sizes, the abundance of standing snags and downed wood.

The state forest division once designated the area as protected, allowing only thinning of some younger trees.

Now, it’s been opened up for clearcutting.

This particular tract was part of a 6,000-acre land swap the forestry board approved last year in its ongoing effort to keep the division from going broke.

With little explanation, agency officials removed 2,600 acres of older tracts with large trees from conservation status that protected them from intensive logging and dropped them into the agency’s cut bucket, making them available for sale and harvest. The agency then gave another 3,550 acres protected status. The strategy helped the division present the move as a net gain in acres being managed to promote prime wildlife habitat, protect salmon-bearing streams and provide clean, reliable drinking water.

But conservationists describe it as a shell game. They say most of those newly protected acres were smaller tracts of young trees with seemingly minimal conservation value or narrow strips of trees along streams that were already protected.

An extreme example sits a few miles away, near the town of Jewell. It’s a gravel parking area with an abandoned Barcalounger and piles of trash. It bears no resemblance to older forest structure. Nor does the nearby open field riddled with gopher holes.

But both are now part of the 30% of the forest the agency has set aside to create “complex forest.” In reality, the division is making no progress toward that goal. The percentage of state forests that are complex today is going down, and now stands at 10%.

The swap gave heartburn to agency biologists, who raised concerns internally that it would break up existing habitat. Environmental groups fumed that the swap wasn’t accompanied by any detailed rationale. Yet the board approved the move, and many of the sections of forest were put up for sale this year.

“They basically opened up some of the fattest, juiciest most accessible stands of trees they have to clearcutting,” Van Dyk said. “Our overarching concern is that this is unsustainable.”

An agency on the brink

Oregon’s state forest division is a public program, but it doesn’t get any public money. Instead, it’s almost completely reliant on revenues from cutting trees. And right off the top, the agency must transfer nearly two-thirds of those proceeds to the trust land counties.

The agency manages the state’s forests with what’s left, no matter its expense level.

It’s a financial straitjacket that the counties and timber companies, who have considerable influence over forestry issues in Salem, have no interest in loosening. They have successfully opposed recent agency requests for general fund money to cover the growing costs of its recreation program, for example, insisting the agency should simply cut more trees.

Without outside money, the division rides the same economic rollercoaster as the wood products industry. The collapse of the housing market in the 2008 recession, followed by falling timber prices, put the agency’s budget into freefall.

“I don’t think anyone knew how deep and how long the recession would last,” said Liz Dent, the state forest division chief.

For the division, it lasted six years. Declining harvest volumes were compounded by a deep slump in timber prices, and the division’s reserves dropped from nearly $40 million in 2008 to $4.9 million in mid 2015, presenting the very real prospect of insolvency.

Leaders hollowed out their offices, slashing staff by 30%. They reduced spending across the board and froze the recreation program altogether. They reduced spending so much in other areas — including research, monitoring and young forest management — staff warned they would no longer be able to meet their statutory mandates.

Meanwhile, agency leaders directed foresters to focus on sales that generated maximum revenues and to increase harvest levels to 245 million board feet a year, the highest sustainable level under its current policy.

The division’s annual operating plan for 2019 lays it out: “Currently revenues generated from timber sales are not covering all costs for state forests,” adding that sales that “don’t cover all costs, or don’t contribute revenue to the division should be avoided.”

Translation: Target high-profit sales. Minimize road work. Limit thinning. Focus on accessible cleacuts.

Not every timber sale is the same. The age of the stand, the mix of species, its location and relative accessibility all affect the prices that timber companies are willing to bid.

Agency leaders insist they’re not cutting more trees to patch the budget. The annual volume of timber the division puts up for sale has averaged 227 million board feet a year in the west side forests covered by the forest management plan, said Liz Dent, chief of the state forest division.

Daugherty, the state forester, agrees. “Cutting more timber isn’t going to solve our problem,” he said. “I’ve been saying that since I became state forester.”

Yet harvest volumes have increased. In those same west side forests, they spiked to 252 million board feet in 2017, 295 million in 2018 and 285 million board feet in 2019. The average harvest volume over the last five- and 10-year periods is above the level that agency leaders say they’re selling.

Agency figures also show that since 2008, it has shifted its harvests to focus on clearcuts. More selective, partial cuts or thinning have declined dramatically.

“We’re high-grading the forests,” said Williams, the forestry board member, using industry lingo for cherry-picking the most marketable stands of trees.

The tactic appears to work.

Buoyed by a spike in both volume and timber prices, the agency generated a $15 million profit on its $47.2 million share of harvest revenues in the year ended June 30, 2018. Results were even better in fiscal 2019, with a $19.1 million profit on revenues of $51 million. The agency’s formerly depleted reserve account has now ballooned to nearly $50 million – an astounding turnaround.

Still, agency officials say that’s not a sustainable strategy. Timber prices won’t stay high. The supply of high-profit tree stands are limited. And they can’t delay forest management projects indefinitely 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 Forest. The forest is ground zero for Swiss Needle Cast, a fungal disease that stunts Douglas Firs, dramatically reducing 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 fix because the cost 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 industry downturn. Besides, more than half the money isn’t available. The agency has already borrowed $27 million of it to cover uncollected fire costs – expenses the state forest division is not responsible for covering.

Expenses outpacing revenues

The seven-member forestry board is charged with financial and policy oversight of the department. But the group, led by businessman Tom Imeson, lacks a comprehensive understanding of the state forest division’s budget problems.

Some openly speculate that the crisis is manufactured, or that it’s only being staved off by the cost cutting and cherry-picking high-value trees, which will eventually 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 amplified last month when they read about another major financial issue in The Oregonian/Oregonlive. Daugherty, the state forester, had not fully informed them the agency was struggling to recoup more than $100 million it was owed from fighting wildfires – 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.

The forestry department has been slow to collect nearly $100 million it’s owed for wildfire costs dating back to 2015..

The Oregon Department of Forestry has failed to collect nearly $100 million it is owed for wildfire costs dating back as far as 2015, creating a cash flow crunch that is undermining core operations and forcing its leaders into a financial shell game to pay the bills.

Hence the raid on the state forest division’s financial reserves to prop up agency operations.

Brenda McComb, a retired forestry professor from Oregon State University, told Daughterty at the retreat that she was frustrated they weren’t provided long-term financial projections. That came on top of long-standing 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 financial 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 member from Eastern Oregon, asked staff repeatedly over the past six months for an accounting of just one expenditure — pension costs – to determine if they were contributing to the division’s financial woes.

After he asked the question in three consecutive board meetings, and after The Oregonian/OregonLive repeated the request, staff finally provided a cut and paste explanation from the PERS website about how employer’s contribution rates were set. No specifics included.

“I never got anything useful,” Kelly said. “I don’t know the answer.”

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 pension costs were expected to have increased by more than 250 percent since the 2009-2011 biennium.

So are the agency’s fire costs – in particular, how they suck away dollars from other forest programs.

The agency doesn’t track how its non-fire divisions subsidize fire costs. But the fire program draws heavily on staff from across the agency during wildfire season, 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 fire costs, including training, staff fire equipment and supplies, specialized trucks, upgraded radios, discounted equipment rental rates and administrative overhead.

Despite repeated requests over a period of months from The Oregonian/OregonLive, agency officials said they could not provide a line item report tracking the division’s individual expenses, including the PERS and fire figures, or how they had changed over time.

Agency leaders said they don’t track expenses in a format that allows them to produce a report detailing them over time. Instead, they provided the news organization with a summary of expenses in three broad categories — personal services, services and supplies, and capital outlay – 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 monitoring, fire protection and reforestation have all been increasing. They also point to growing administrative costs and the standard inflation for salaries and medical costs. But the figures were often non-specific and outdated, if they were provided at all.

Tom Imeson, the forestry board chair, says the agency has been looking for a viable solution to its budget problems – one that can also boost conservation outcomes — 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 understatement, 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 current authority.”

By Ted Sickinger
Sept. 28, 2019

The Oregonian

The first Roger Neugebauer heard about the Norriston Heights timber sale was two days before the end of the public comment period, which closed May 2. A neighbor emailed him and described the Oregon Department of Forestry’s plan to clearcut the 77-acre forest plot.

Neugebauer was stunned. The tract of timber sits directly across Highway 101 from his house in Arch Cape, just south of Cannon Beach. He hadn’t heard a peep from the agency. Neither had most of the owners of 20 neighboring homes, all of whom draw their water from gravity fed cisterns in the forest collecting groundwater under the trees slated for harvest.

“They claimed they couldn’t inform us because it was too complicated,” Neugebauer said. “They could have printed 20 copies of a letter and hired a high school kid in Cannon Beach to put it in front of everyone’s door and they would have got the communication done. But they couldn’t figure that out.”

“It’s not hard to find us,” added another neighbor, Jay Haladay. “We’re right across the damn street.”

On Monday, agency officials will hold their first public meeting about the sale with the Clatsop County Board of Commissioners. And, capitulating to angry neighbors, it will announce that it plans to delay the sale for a year in order to work with locals and finds some “mutually acceptable solutions” to their concerns.

The agency’s policy on timber sales requires a 45-day public comment period, but doesn’t specify which parties should be notified prior to or during that period. In this case, however, officials now acknowledge that they screwed up.

“We could have done better as an agency to reach out earlier in this case,” said Jason Cox, an agency spokesman. “We’re committed to improving our engagement both with the general public as well as specific parties with potential concerns.”

But for the agency these days, time is money. And based on a forestry department report, Norriston Heights is a potentially lucrative sale. It requires a nominal investment in roads — $43,200 — and would bring in an estimated $981,750. That’s the kind of sale that agency leaders have explicitly directed foresters to focus on as they try to dig out of deep financial problems by identifying “high net revenue” sales.

Translation: Easily accessible clearcuts that don’t require big investments.

The state forest division has struggled since the 2008 recession to find a path to financial viability. Meanwhile, the agency at large is mired in a cash flow crisis that has it borrowing heavily from state forest cash reserves to float nearly $100 million it has failed to collect from wildfire costs dating back to 2015.

The Norriston Heights sale also would be good news for Clatsop County and its local taxing districts, as they get nearly two-thirds of the net revenue from state forestland harvests. Clatsop and 14 other counties rely on money from state harvests to pay for basic services. They also depend on the logging and mill jobs the harvests provide their communities.

Cox, the agency spokesman, emphasized that point in an email to a neighbor who raised concerns about Norriston Heights in July: “The area required minimal infrastructure investment, is of relatively simple complexity and offers a high rate of return to benefit local services like schools, transportation, health care, law enforcement and rural fire protection.”

“Simple complexity” is agency lingo for the type of forest with smaller, relatively young trees. “Complex forest,” by contrast, are those lands with prime habitat that the agency is aiming to protect. According the agency’s Forest Management Plan, it is actively managing state lands so 30% of forests will grow to become complex at some undefined point in the future.

But it’s a goal it is largely failing to accomplish. In real life, the percentage of complex forests is going down. It currently stands at just over 10%.

The Norriston Heights unit was classified as complex forest until last spring, when the agency decided to cut it. And a portion of the tract was part of designated conservation areas until 2010, when financial problems led it to reduce the amount of public forests across the state it aimed to protect from 40% to 30%, freeing up more land for harvest. This spring, the agency resurveyed the plot and designated it as “understory,” a less complex forest structure that can typically be logged without much blowback from conservation groups.

Agency officials said the plot was resurveyed using agency protocols. It was previously clearcut in the 1950s, and they said, the 68-year-old plot had yet to attain complex structure.

Risks to habitat, drinking water

The stretch of woods near Arch Cape proposed for clearcut is the backdrop to one the most popular tourist destinations on the coast. Three quarters of a million visitors stop each year at Arcadia Beach and Hug Point state recreation sites that bracket the stand and countless more drive by on Highway 101. That’s a social value the agency is supposed to take into account under its statutory mandate to manage forests for the “greatest permanent value” to Oregonians.

Cannon Beach Mayor Sam Steidel emphasized that point in a September letter to the agency.

“The Norriston Heights property is unique because it is the only state forestland on the coast in Clatsop County,” he wrote. “Because of its special value – scenic, wildlife and drinking water – we ask that you cancel the sale and permanently protect it as high value conservation land.”

The sale area directly adjoins a stand of giant Western Red Cedars containing Oregon’s largest tree – the Arcadia Cedar — which is already a protection area for the endangered Marbled Murrelet. The presence of an endangered species nearby — and possibility that logging would harm its habitat — considerably ups the ante on any timber harvest.

Department surveys in 2003 showed “significant behavior indicative of stand occupancy” directly to the north. Murrelets were also detected flying over the harvest unit. But the department says that was evidence of presence, not occupancy. Cox, the agency spokesman, said the sale area was surveyed again in 2017 and 2018 and no murrelets were observed.

Yet there’s no question that the land holds valuable water. The Arch Cape neighborhood’s supply is piped from cisterns that sit about 50 to 75 feet into the woods, under Highway 101 and into private pump houses that filter and pressurize it for supply to the homes. It’s already a precarious, low-tech and high-maintenance system, prone to clogging year round and low flows when rain is scarce in the summer.

Neighbors worry the clearcut could ruin the natural groundwater filtration and further decrease water flows. They’re also anxious that pesticide spraying will poison the water they do get, making the neighborhood unlivable.

It’s not an unfounded concern. They need only look south to Rockaway Beach, where clearcutting on private land in the Jetty Creek watershed left high levels of a cancer-causing byproduct in the town’s drinking water, and aerial spraying left traces of a potent herbicide in the creek. The department has received similar complaints about clearcuts from residents to the south in Neahkahnie. Indeed, mud from hillside clearcuts and logging roads threaten drinking water up and down the Oregon coast.

For Norriston Heights, agency geotechnical analyses acknowledge that the harvest might decrease summer flows, which it says would be most pronounced in the decade after harvest. But it also suggested that its plan to replant the area with fewer trees than are currently there may result in more available water. Agency officials also told neighbors that they would establish stream buffers larger than those required by the state law and the agency’s normal standards to minimize landslide risks and the impacts of sediment on their collection systems.

Liz Dent, chief of the state forest division, said the agency had listened to feedback and modified the sale accordingly. “In this case,” she said, “we put together a timber sale that exceeded our own standards.”

Thomas Merrell, who manages the waters systems for many Arch Cape neighbors, has a more cynical view after dealing with the agency for two decades.

“They look at you nod their head and say they can do what they want and that’s the way it’s going to be,” he said. “Historically, that’s the way it works.”

Thomas Merrell is a water consultant who helps manage water systems for many homeowners near Arch Cape. He and other neighbors are worried that a clearcut would harm their community’s only water source.

Neighbors revolt

When the Arch Cape neighbors did learn of the plan, they organized an informational meeting for July 2. It was supposed to be the agency’s show, with a district forester there to explain the plan. About 65 people showed up. But at the last minute, the forester who was supposed to attend decided he wasn’t coming.

“He had obtained an e-mail that had been circulating about ODF being at Hug Point the morning of July 2nd to discuss the clear cut,” said Nadine Mathis Basha, the neighbor who organized the meeting. “He told me that he wasn’t going to meet with those people who were not even affected by the clear cut. I don’t remember exactly what he said but that is the essence.”

Dent says that’s a mischaracterization of the forester’s response. She said he didn’t go because some of the neighbors, as well as the water manager for many of the systems, couldn’t be there.

With the agency’s decision on Wednesday to defer the timber sale for a year, locals say they’ll use the time to hire their own experts to evaluate landslide and water risks.

The agency’s reversal came after inquiries from legislators as well as pressure at the Board of Forestry. Haladay, the Norriston Heights neighbor, asked the board at its early September meeting whether the agency had followed its own protocols when reclassifying the forest. He described the agency’s lack of outreach to affected homeowners and asked forestry officials to cancel the sale.

“ODF needs to come back and say we didn’t do this right,” he said.

That caught the attention of board member Brenda McComb, who asked State Forester Peter Daugherty whether the agency had any response.

Daugherty said the agency was still considering the sale and would be holding an information meeting with the Clatsop County Commission to discuss it. But he said this was the first he’d heard of any formal request to cancel the sale.

It certainly wasn’t the first such request to the agency. Halladay made the same request to the agency in early July. Thirteen environmental groups also had asked the agency in May to pull the sale, raising concerns about coastal erosion and Marbled Murrelet habitat. Another advocacy group, The Ecola Creek Awareness Project, made the same request during the agency’s public comment period in May.

Board member Jim Kelly told Daugherty at the September meeting that he thought Norriston Heights was an unusual situation given its proximity to homes, and the sale might merit more attention from the agency.

The forestry board is the agency’s policy oversight board. But Daugherty cut off any further conversation by citing a specific section of Oregon Administrative Rules that limit the board’s authority to second guess particular timber sales.

“Just to be real clear,” he concluded, “you’re not directing or giving me any advice in this matter. Thanks.”

By Ted Sickinger
September 25, 2019

The Oregonian

The Oregon Department of Forestry has failed to collect nearly $100 million it is owed for wildfire costs dating back as far as 2015, creating a cash flow crunch that is undermining core operations and forcing its leaders into a financial shell game to pay the bills.

In June, agency leaders restructured a $50 million line of credit with the Oregon Treasury to avoid default. Then they borrowed $18 million from the Department of Administrative Services to cover two months of payroll costs – loans they’re required to “repay” in coming months but will immediately renew to keep cash on hand.

Meanwhile, the agency has been forced to drain internal cash reserves that support other departments, tapping one fund that is supposed to support state forests for $27 million and another for private forest landowners for $15 million.

Those funds must be repaid, too, and officials acknowledge that their temporary subsidization of fire costs is hampering work in other areas. The agency has put a freeze on an all non-essential spending to conserve cash, including computer and motor pool purchases, travel and training.

The cash flow problem only came to light in mid-June, when the agency nearly defaulted on its line of credit from Treasury. It eventually paid off half of its $50 million obligation, but extended the repayment period for the other half until April. That may not be an option going forward, as Treasury might not be willing to continue the practice.

“As the frequency and severity of Oregon’s fire costs grow, along with the complexity and duration of underlying repayment mechanisms, Treasury’s interfund borrowing program may no longer be the right tool to support these ongoing cash flow needs,” Rachel Wray, a spokeswoman for Treasury said Tuesday.

That near default prompted the co-chairs of the Legislature’s Ways and Means Committee to demand a monthly memo from State Forester Peter Daugherty detailing the agency’s financial condition and the steps he is taking to solve the problem.

Sen. Betsy Johnson, D-Scappoose and one of the three co-chairs, said the agency had not been forthcoming with the size or the nature of the problem with the Legislature or the Board of Forestry. She said she’s still trying to piece together “what I consider to be a crisis.”

“There has not, in my view, been a complete disclosure of the problem,” she said. “I am terribly disappointed by the agency’s inability to process its outstanding claims that stretch back four years,” Johnson said. “At some point the data may become irretrievable.”

Daugherty did send an email in mid July to Board of Forestry members describing the nature and extent of the issue.

“I take full responsibility for the department finding itself in such a precarious position, with only two weeks left in the fiscal year,” he said. “It will be important for me to ensure that clear, consistent communication between finance functions in the Fire Protection and Administration divisions are seamless and that adequate controls are in place to identify and escalate this type of issue as early as possible.”

In his August and September memos to the co-chairs, Daugherty said the root of the problem was Oregon’s outdated approach to covering firefighting costs at a time when the severity of wildfires has increased and the related costs have mushroomed.

The agency’s fire division is responsible for fighting fires on private and state land. It also contributes much of the resources needed to fight fires on lands owned by the Bureau of Land Management and U.S. Forest Service. Most of those costs are reimbursable by the state and federal government, but the agency says it simply doesn’t have financial capacity to float those escalating costs until the bills get paid.

Bill Herber, the agency’s deputy director for administration, said another issue is that the agency hasn’t been adequately staffed to process the backlog of expense claims after years of high-cost fire seasons. That involves digging through boxes of old shift tickets and lists of equipment used on fires as far back as 2015, reviewing them against old cost-sharing agreements, auditing the results and submitting the claims.

The agency just closed out its expense claims from fires in 2013 and 2014. It has $93 million in unreimbursed costs from fires between 2015 and 2018, half of which have yet to be invoiced. And though the 2019 fire season has been fairly mild to date, it has another $32 million in costs that will take at least a year to reimburse.

“Some of this just creeped up on us,” Herber said. “It all culminated pretty suddenly. It overwhelmed our ability to really track it… There’s a lot of work that goes into determining how much needs to be paid and by whom.”

The agency is currently working with the legislative fiscal office and the state’s chief financial officer to beef up its collection efforts, improve its documentation and invoicing processes, and track its cash flow on a weekly basis. Herber said the agency had transferred staff internally to address the backlog, and those efforts have led to quicker turnaround of more recent expenses and successful collection of some older debts.

Agency leaders plans to request more money to help address the crisis in the 2020 session. Longer-term, they say Oregon needs to restructure its approach to cover the cost to fight large wildfires.

“We are committed to appropriately responding to the new challenges fire seasons are presenting and working closely with the governor’s office, the governor’s council on wildfire response and legislators to identify a long-term solution,” Daugherty said in a Sept. 3 memo to the co-chairs.

Johnson said she was skeptical of the agency’s requests for general fund money when it had $93 million in reimbursements outstanding.

“It’s a management problem, or a prioritization problem,” she said.

Tom Imeson, the chair of the Board of Forestry, said problem needs a legislative fix and the board will be taking it up at an October meeting focused on strategic planning.

“This topic will be an important discussion item at that meeting.”

Kristina McNitt, president of the Oregon Forest & Industries Council, described fire protection as the number one priority for Oregon’s private forest landowners and said the department’s protection program is the envy of the nation.

But she said “the current fiscal crisis is alarming, not least of which the agency’s precipitous loan to itself of $15 million from the Oregon Forestland Protection Fund, predominantly funded by fees and taxes paid by private forestland owners. The state legislature, the Oregon Board of Forestry, and Oregon’s private forest landowners deserve answers and transparency from the agency.”

Twenty-five years ago, the Northwest Forest Plan was put in place to protect more than 24 million acres of forest in Northern California, Oregon and Washington. On the anniversary of the law, the debate over what to do with America’s ancient forests has come under new scrutiny. Jeff Glor reports.

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