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JEFFERSONCOUNTY
BOARD OF COUNTYCOMMISSIONERS
AGENDA REQUEST
TO: Board of Commissioners
FROM: Philip Morley, County Administrator
DATE: July 5,2011
RE: 2011 DNR Timber Revenue Overview and Update on Silent Alder Sale
STATEMENT OF ISSUE: Staff presents to the Board of County Commissioners our current
2011 Washington State Department of Natural Resources (DNR) timber revenue projection, and
an update on DNR's Silent Alder sale.
ANALYSIS: DNR timber sales (and private timber sales, too) are performing better because
prior wood and lumber inventories have been exhausted, boosting domestic demand for new
timber harvest, coupled with a robust export market to overseas.
Projected 2011 General Fund revenue from county trust lands managed for timber harvest by
DNR is presently estimated to come in at as much as $375,000 above the $230,000 DNR revenue
in this year's adopted General Fund budget. The Road Fund and Conservation Futures Fund will
also receive higher revenue from those sales, as will other special purpose districts that also
receive DNR revenue.
Staffis working on a proposal for dedicating a portion of the General Fund's one-time revenue
windfall to pay for debt service and capital projects that otherwise would be a General Fund
obligation.
Last year the Board of County Commissioners successfully asked DNR to withdraw, modifY and
reissue its Silent Alder timber sale, in order to preserve a valuable recreation forest between
Beausite Lake and Gibbs Lake. DNR timber tracts on two parcels that totaled 291 acres were
spared from harvest. The Board signed a letter to DNR requesting DNR initiate a Trust Land
Transfer for all 291 acres. As a part of this transfer, the 291 acres would be given to the County,
and one or more tracts elsewhere in Jefferson County would be placed into DNR county trust
status, and manaBed for harvest revenue to the county. This timber and land value of that tract
would equal that of the 291 acres.
Despite the reduced the amount of timber, with an improving timber price market, when the
smaller Silent Alder timber sale was successfully bid and contracted, it was for $34,000 more
than DNR's price estimate for the original larger sale.
By agreement when the Silent Alder sale was revised and relet, DNR has asked to be
compensated for $30,000 of their costs for withdrawing, re-drawing, and re-advertising the Silent
Alder sale. We will be using some of this year's higher DNR revenues to pay for this. My office
will be submitting a second quarter budget extension request to pay this invoice from Non-
Departmental budget within the General Fund.
FISCAL IMPACT:
The April 201 0 DNR timber revenue projection prior to the reduction of 291 acres for the Silent
Alder Tract compared to the May 2011 estimate for revenue for the Silent Alder Tract are shown
in the table below:
Silent Alder TImber sale estImated revenues:
Date of . Esti mated County Gen County County County
Estimate Revenue-all Fund Roads Consv. Revenue
by DNR Cut Volume Agencies reven.ue revenue Futures Total
Alder 4600 mbf ..1 375 ,
r-l 511 50 000 7 ,
,
Ap 0
May-II
Revenue Difference
9, , 33,898 9 , 6 3, 76 231,439,
l,091,717! 153,872 107,752 4,339 26S;9631
141,717 i ..__19,97~ ',..1},987. _,_,56~ ,. _~~~~4.j
ent
Silent Alder 3362 mbf
These estimates are based on DNR updates provided to the 80CC on April S, 2010 and
May 3, 2011.
RECOMMENDATION:
No action is required at this time, this is an informational update on the 2011 DNR Revenues and
the Silent Alder Sale.
REVIEWED BY:
rL" ~'f~?f~Y>!tf
CountyAdministrator Date.