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Home My WebLink About112618_ra0210:00 a.m. Regular Agenda Commissioners Chambers JEFFERSON COUNTY BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST TO: Board of County Commissioners Philip Morley, County Administrator FROM: Leslie Locke, Executive Assistant DATE: November 26, 2018 SUBJECT: UPDATE re: Washington State Department of Natural Resources 3rd Quarter County Income Report STATEMENT OF ISSUE: Mona Griswold, DNR Regional Manager, and Drew Rosanbalm, DNR State Lands Assistant, will provide the Commissioners with an update regarding the Washington State Department of Natural Resources 3`d Quarter County Income Report. FISCAL IMPACT: DNR Representatives will discuss timber sales and revenue reports. RECOMMENDATION: No Action Required REVIEWED BY: 6ip Morley, unty dmi strato Date October 31, 2018 The Honorable David Sullivan, Chair Jefferson County Board of Commissioners P.O. Box 1220 Port Townsend, WA 98368 Dear Commissioner Sullivan: ��S}1INGr�� D se0' A+ m a O air +$y HILARY 5 FRAK$ �r The Washington State Department of Natural Resources (DNR) manages approximately 14,705 acres of State Forest Transfer and Purchase Lands that benefit Jefferson County. These lands generated 51,258,000 in the first three quarters of calendar year 2018. Net value under contract for calendar year 2018 is estimated at $4,122,000 from activities expected to occur under current contracts. Thanks to all of you who provided input and suggestions to its regarding the future format for this report. We are in the process of developing the new report style. Please be aware that you will continue to receive this report in its current style until we have completed the new formatted version. We want to notify, you of a recent change that pertains to counties that receive revenue from state forestlands. After consulting with the Office of the Attorney General about revenue disbursements and in an effort ort to ini igate risks and reduce errors in those disbursements, DNR has determined that initial deposits will be held as security until all of the obligations of the purchaser are satisfied under timber sales contracts as required by law. All or a portion of the initial deposit may be distributed as the final payment far the sale of valuable materials after the Department determines that adequate security exists for the remaining performance of any obligations of the purchaser under contract. This change affects the timing of revenue distribution and does not affect the total amount of revenue distributed. If you have any questions regarding this change please contact Leah Fenner, Finance Manager, at 360-902-1259. The income information in this report does not include anticipated revenues from additional planned activities (contracts harvests, leases, easements, etc.) for which contracts have not been finalized. These income estimates are net after the current agency management cost percentage has been applied. Some counties receive portions of their income from leases and fees; however, the majority of income reflected in this report is derived from timber sales. As most revenue stems from timber sales, these projections can fluctuate depending upon when timber harvests occur. Market conditions, weather, contract requirements, and regulatory requirements influence timber purchasers' decisions about when to harvest. }iILARY S. FRANZ DEPARTMENT" OF NATURAL RESOURCES 350-302-1000 C:GE,itfi5S3C7ttE'R oc i.,A.�Jos 2 ; 11 WASHINGTON STREET S1 AX 360-W2 ? 7''5 C0: 0, NF WA.=50V ;mWL ,3 C)P 47001 TR5 71, 1 QL NIP1A, 'air'± 98SO4 V', VV'VV1Pj DNR WA TO}/ I appreciate how necessary revenue is to the success of county functions. DNR consistently strives to ensure that we realize the maximum available income from the State Forest Transfer and Purchase Lands. Should you have any questions regarding this information, please contact Mona Griswold, Olympic Region Manager, at 360-374-2810 or at mona.griswold@dnr.wa.gov. Sincerely, n: , Hilary anz Commissioner of Public Lands Enclosures COUNTY INCOME REPORT EXPLANATION OF TABLES October 2018 Two categories of lands are managed by the Washington State Department of Natural Resources (DNR) specifically to benefit counties: 1. State Foust Transfer Lands. Lands acquired by counties through tax foreclosures were transferred to DNR to manage. Management fee rates are established by the Board of Natural Resources. Currently, counties receive 75 percent of the revenue from these lands. 2. State Forest Purchase Lands. State4ssued bonds were used to acquire certain parcels from private owners. Typically, these forest lands had been severely Iogged and were in need of active management. Allocation of revenue from these lands was determined when purchase was authorized, as follows: 26.5 percent to the county in which the property is located; 50 percent to DNR for management expenses; and the remaining 23.5 percent to the State General Fund. Nineteen counties include these types of State Forest Lands within their county boundaries. Income from management activities on State Forest Lands is designated for allocation to several taxing districts in each county. Only a small amount is available to the county for discretionary use. Revenue from State Forest Lands originates primarily from timber sales. These amounts vary widely as market conditions fluctuate. Smaller portions of revenue are derived from activities such as communication site leases, rights-of-way easements for utilities and roads, special forest products, special uses, and interest. Income will also vary with the number of revenue -generating activities within a given year. Variables responsible for high revenues in one year can lead to reduced income the following year. • Table 1 shows the annual revenue for each county from calendar year 2008 through the third quarter of calendar year 2018. This table illustrates the variability in total revenues from year to year. • Table 2 shows projected revenue for all 19 counties from all activities on State Forest Lands for calendar year 2018. • Table 2A shows projected revenue for each timber sale on State Forest Lands in your county anticipated to occur for 2018 and beyond (enclosed if applicable). • Table 3 shows the volume and net value corder contract as of September 30, 2018 that is not currently scheduled for harvest until after December 2019 (enclosed if applicable). Projections were developed by DNR region staff by contacting each timber purchaser that has rights to an upcoming sale. Purchasers were asked how much and when they planned to harvest the timber from each sale. These projected timber revenues should be considered rough estimates only, actual activity will depend on individual sale characteristics (species, volume, location, etc.), combined with outside market factors as determined by each purchaser. The schedule of future timber sales from State Forest Lands in your county is available upon request from Department of Natural Resources' region staff. Table 1, Revenue to Counties from State Forest Transfer and Purchase Lands (Calendar Years) Updated: 10/9/2018 county Clallam 2009 2010 2011 2012 2013 2014 2615 2016 2017 2018 Jan-Sw Clarbc 4,173,346 8,229,596 5,502,033 4,738,338 5,643,329 8,487,731 3,378506 7,938,764 8,543,420 2,179,951 1,977,893 8,793,446 4,601,597 8,528,782 7,191,261 6,388,518 5,846,289 4,791,957 5,192,493 957,066 Covrfitz Crays Harbor 2,914,752 1,007,779 3,709,692 1,534,6 91 1,557,816 1,598,498 1,067,106 4,025,043 1,356,909 1,358,770 1,385,527 2,178,958 1,991,750 2,168,671 1,075,212 875,687 1,245,311 2,838,170 1,881,541 955,989 Jefferson King 6MA03 1A53232 981,510 3,002,453 740AB1 661,50/ 1:085.477 2,906.981 1;84428 I; x,544 1,257,577 mtsw 244,491 2,737595 2,47407 1,112,153 741,392 2,818,289 952,755 2,397,790 905,021 1,229,871 495.0/4 55,9158 877,589 743,958 293,314 851,397 824,969 1,130,540 538,637 Kli *i0/ 1,037.450 327,073 209,403 559,355 289,623 215,737 352,380 26,797 25,551 10,947 Letws 6,738,048 6,147,429 11,076,482 3,439,911 4280,541 8,677,045 4,053,711 5,416,025 5,411,157 5,043,990 Mason 1,500,640 3,002,888 2,616,802 2,024,430 1,337,166 3,067,093 8,005,336 3,6.21,960 2,810,189 6,599,421 Paeffic 3,428,025 2,080,204 2,547.153 441,369 3,446,724 1267,286 1227,528 2.653,344 1,387.737 2,297,619 Piero 742,913 1,523,800 214,159 178,426 121,858 222,815 32,691 335,489 437,463 973,972 Skagit 5.704,325 8,746,747 11,679,594 9,093,422 5,976,604 7,452,783 7,425,5351 8,592.232 14,533,379 12,169,093 Shta+nanea 253,914 1215,005 747,982 926,5532 1„367,876 2,415.8552 1234,445 2,131,536 1,588,271 745,144 8nohorvish 10,138,226 13,132,194 13,981,341 5,682.380 11,786,058 9,251,851 7258233 5,852,325 7,878,567 5,221,335 Stevens 79,484 47,542 59,973 64,654 09,322 70,725 63,533 94,918 90,768 79,303 Thuniton 2,625,128 7,964,904 4,200.388 1,660,728 5,017,407 2,999,025 4,388,240 8,747,144 2,947,101 2,290,546 Wahkkdasn 1,516,340 1,820,52 1,400,872 1.9556,441 1,742,003 1,631,697 802,706 2,426,441 1,443,199 551,790 Whalcom 3,5 .283 2,405,630 3,543 071 4 488,281 3,763.694 2,178129 4 022 2,061 161 1,481,660 2,985,816 7 ....... PI M- 9 f49r974,34? X73.379,929 �?1; ,898 SSp,21ST57 i58.&i3.794 160488.14 i fi3; f 1 ? ; 047 4 Note: il6vmW is received deify by the Deparbnertt of Natural Resources for aexMdss at State FmW lands MW deposited daily at We Oibim of State Treasurer. Effective Febnisry 1M these Inoses are remelted to each county via wire transfer a m wmxn of sow Wtees per math. Due to the specific doe mattes are wed by the Deparbnent aid the c uloff dates used by Ohe Stale Treasurer for afire transfers, ft revenue for the current period may be differert Otart ackW rernittances to date_ 10/31/2018 Table 2. Total Projected Revenues to Counties from State Forest Transfers and Purchase Lands (Dollars In Thousands) Thurston 401.5 1,266.8 1,230.0 5,229.1 Wahkiakum 0.0 0.0 1.6 1.6 Whatcom 238.8 238.8 538.5 3,246.9 TL.a e, u, n �x <. a..�., �,. ,... f. x.�6dtms ��1�w.. u High - 90 percent reliability that timber harvest will occur and stated revenue will be transmitted. Medium - 50 percent reliability that timber harvest will occur and stated revenue will be transmitted. Note: Projected revenues are based on timber purchaser's logging plans as of September 2018. These plans change with changes in the economy and the business needs of each purchaser. Department of Natural Resources' reglon staff should be contacted concerning possible fluctuations In timber harvest for sales currently under contract and the schedule of future sales on State Forest Lands in your county. 10/31/2018 Oct thru December 2018 Jan thru December 2019 County High Medium High Medium Ctailarn $532.1 $936.5 $3,232.8 $5,035.7 Clark 563.5 563.5 213.9 213.9 Cowlitz 18.5 18.5 10.9 28.9 Grays Harbor 322.1 322.1 318.1 1,298.8 Jefferson 2,864.4 2,864.4 74.0 74.0 King 10.4 10.4 1,610.1 1,610.1 Kftsap 18.7 18.7 1,394.1 1,394.1 Klickitat 16.1 16.1 13.4 13.4 Lewis 1,149.6 1,150.6 81988.9 9,144.4 Mason 21.0 21.0 2,877.8 3,905.8 Pacific 1,180.5 1,180.5 659.5 659.5 Pierce 652.8 652.8 308.1 533.3 Skagit 5,636.9 7,130.9 1,322.4 5,735.7 Skamania 1,976.0 2,1852 23.6 587.9 Snohomish 827.5 1,488.0 906.2 3,997.4 Stevens 0.8 0.8 87.0 87.0 Thurston 401.5 1,266.8 1,230.0 5,229.1 Wahkiakum 0.0 0.0 1.6 1.6 Whatcom 238.8 238.8 538.5 3,246.9 TL.a e, u, n �x <. a..�., �,. ,... f. x.�6dtms ��1�w.. u High - 90 percent reliability that timber harvest will occur and stated revenue will be transmitted. Medium - 50 percent reliability that timber harvest will occur and stated revenue will be transmitted. Note: Projected revenues are based on timber purchaser's logging plans as of September 2018. These plans change with changes in the economy and the business needs of each purchaser. Department of Natural Resources' reglon staff should be contacted concerning possible fluctuations In timber harvest for sales currently under contract and the schedule of future sales on State Forest Lands in your county. 10/31/2018 TOW 21L Prajectsd Timber Nerved ROMPA s to Je!/emae COW* ham fats FonN TmnoW era! Puma Lands by LoW DMCfIptlea ('t mawwo W Dwbmj ° Sae App. Etcpkwion L"M Desaipdott Oet fro Dem 2118 Jet f u Daxmbw 2019 YMo L%dw corwact ww Nmabor We Nana Dab Sedi- To -whip ftW High Madkan Nigh Msdkrm Doe -19 93097 CenW 16Thkadrrg 1W3120 28, 29, 33 20H IE 27A 27.4 54.9 54.8 35.1 16,21,34 20 1w 2,11, 35 28N 2w 16 29N 1W 5,7.911.14,ts »,2e 29N 2W 14 29N 3w 93M cwmbob 1003120 8,15,17, 22 27N /W 1,302.0 1,302A OA 0.0 OA 36 29H 1W 95343 Lofty 1003121 11 26N 2W 00 00 00 0.0 1,472.5 25.27 27N 2W 98007 Cape L*A Sort 1 Mills 1 284 2W 112$ 112.8 0.0 OA OA 18 201 1W 13 30N 2W 98808 Cape face Sort 2 aim/19 1 n" 2W 202A 202.6 OA OA 0,0 16 29N iw 13 30H 2W 90m Cape Lake Sort 3 Ot0di119 1 2m 2W 172.9 172.8 0.0 OA 0.0 16 29N iw 13 306 2W 98012 Cape Lake Sot 6 01031/19 1 28N 2W 889.6 889.6 OA OA OA 16 29N 1W 13 30N 2W Page 1 d 2 1ty3irms TOM 2A. Ro*ded Tkdw Havant Rem b JWhraat County kom $We Forest Tmmdw end Purchwoo Lulls by L sg Dpaiption mwv@ewse vfDwwe) " App. �cpi mtk- Legal D-=ipdan Oct dum December 2910 Jon SWU Deoealber 2019 Vaitm Under C after Hemlber Sats Hams Deb cocoon Tonmk4 new H19M moco mt High kledbmn Doo -19 96813 Cape Lake Sod 7 01131119 1 20H 2W 592 592 0.0 0.0 0.0 16 29H iW 13 3011 2W 98614 Cape Lake Sat 0 01/31/19 1 25N 2W 72.1 72.1 0.0 0.0 0.0 i8 2911 1W 13 38N 2W 968i5 Caps Lake Sat 9 OWW19 1 2811 2W 11.0 tib 0.0 OA OA 16 2911 1W 13 30N 2W 96616 Cape Lake Sort 10 01131119 1 28N 2W 229 22.9 OA OA 0.0 16 2911 1W 13 3011 2W 96817 Cape Lake Sort 11 OV31119 1 25N 2W 4.1 4.1 OA 0.0 O.O 16 29N tW 13 3W 2W 96618 Cape Lake Sat 12 01131119 1 28N 2W 7.8 7.8 Ob 0b 0.0 T8 29N 1W 13 3011 2W 90664 PamylVduwood lCW3Wl 4,22 27N 2W OA OA Ob OD 1,145.7 33, 34.36 28N 2W SAP � IaeM-90 Pwepw tlen M�nbw wnveatrAl aoerr ewd MrY/IeMwMw wda MLS/. Yrdbn-!/ /Nowt fi� liidler ke/Yen wM eegr waAeUANYwIee w1R be telwalfHee. YaMw we wtinaloiFw (wwr kick M weaewprebtbFNy. NOW leYwlaw we baud w ameer pie I NO pYas w of 9pWROM 20M These pWw dhwga wilt chmagoo M ow eewwiwy end bav4wee I ON e,ah peretww. brpweww l oF tfwwal Raweewwgtarnl rill oh@W he malmole4 ommndea NO skw9w 6f *ow Im m ptan &,W for oeplw of qM anemopeforopwm teeeaseeat- aMe+wdlk theUDFdquipttenefo- Seem Page 2 d 2 1fY$1241e Table 3. Volume and Net Value of Timber under Contract on State Forest Transfer and Purchase Lands for Harvest after Calendar Year 2019 u County Volume (mbf) Net Value Clallam r 7;37 $1,400,943 Clark 0 Cowlitz`` 0 Grays Harbor 3,140 328,915 Jefferson 9,619 2,653,266 King 0 KAW 0 Klickitat 0 Lewis 6,433 '' 1,440,375 Mason 0 Pacific 0 Pierce 0 Skagit 2,1i?3 417,501 Skamania 0 Snohomish 1;065 `' 162,348 Thurston "1576, 681,652 Wahkiakum 0 Whatcom 1,832 260,429 Totals 37,502 $7,345,630 u Counties currently receive 7 of revenue from State Forest Transfer land and 26.5% of revenue from State Forest Purchase land. Note: The sales represented here are currently under contract as of September 2018. This timber could be harvested at any time depending on market conditions and business needs as determined by each purchaser. Safes to be sold In the future could provide additional revenue to your county. Department of Natural Resources` region staff should be contacted concerning future sale activity and dates. 10/31/2018