HomeMy WebLinkAbout051319_ra0310:50 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: May 13, 2019
SUBJECT: UPDATE re: Washington State Department of Natural Resources 1st 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 1 st
Quarter County Income Report.
FISCAL IMPACT:
DNR Representatives will discuss timber sales and revenue reports.
RECOMMENDATION:
No Action Required
REVIEWED BY:
ip Morle , unf�inistfator Date
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MAY 0 3 2019,
Op NATO VL
The Honorable Kate Dean, Chair
Jefferson County Board of Commissioners
P.O. Box 1220
Port Townsend, WA 98368
Dear Commissioner Dean:
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 $844,000 in the first quarter of calendar year 2019. Net value under contract for
calendar year 2019 is estimated at $1,277,000 from activities expected to occur under current
contracts.
Thanks to all of you who provided input and suggestions to us 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 to mitigate 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 cinder timber
sales contracts as required by law. All or a portion of the initial deposit may be distributed as the final
payment for 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.
PRINTED ON RECYCLED PAPER. DNR IS AN EQUAL OPPORTUNI?'Y EMPLOYER. 10
HILAR'f S. ERANZ DEPARTMENT OF NATURAL RESOURCES 360-902-1000
COMMISSIONER OF PUBLIC LANDS 1111 WASHINGTON STREET SE FAX 360-902-1715
CPL@DNR.WA.GOV MAIL STOP 47001 TRS 711
OLYMPIA, WA, 98504-7001 WWW.DNR.WA.GOV
HILARY S. FRANZ - 6 + "'=
_
COMMISSIONER OF PUBLIC LANDS � - 0
t
April 30, 2019
C 0 M N1
The Honorable Kate Dean, Chair
Jefferson County Board of Commissioners
P.O. Box 1220
Port Townsend, WA 98368
Dear Commissioner Dean:
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 $844,000 in the first quarter of calendar year 2019. Net value under contract for
calendar year 2019 is estimated at $1,277,000 from activities expected to occur under current
contracts.
Thanks to all of you who provided input and suggestions to us 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 to mitigate 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 cinder timber
sales contracts as required by law. All or a portion of the initial deposit may be distributed as the final
payment for 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.
PRINTED ON RECYCLED PAPER. DNR IS AN EQUAL OPPORTUNI?'Y EMPLOYER. 10
HILAR'f S. ERANZ DEPARTMENT OF NATURAL RESOURCES 360-902-1000
COMMISSIONER OF PUBLIC LANDS 1111 WASHINGTON STREET SE FAX 360-902-1715
CPL@DNR.WA.GOV MAIL STOP 47001 TRS 711
OLYMPIA, WA, 98504-7001 WWW.DNR.WA.GOV
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 360-374-2800 or at mona.griswold@dnr.wa.gov.
Sincerely,
I
Commissioner of Public Lands
Enclosures
COUNTY WCOME REPORT
EXPLANATION OF TABLES
April 2019
Two categories of lands are managed by the Washington State Department of Natural Resources (DNR)
specifically to benefit counties:
1. State Forest 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. State -issued bonds were used to acquire certain parcels from private
owners. Typically, these forest lands had been severely logged 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 2009 through the first quarter of
calendar year 2019. 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 2019.
• Table 2A shows projected revenue for each timber sale on State Forest Lands in your county anticipated
to occur for 2019 and beyond (enclosed if applicable).
• Table 3 shows the volume and net value under contract as of March 31, 2019 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.
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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 March 2019.
These plans change with changes in the economy and the business needs of each purchaser.
Department of Natural Resources' region 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.
4/26/2019
Table 2. Total Projected Revenues to Counties from State Forest
Transfers and Purchase Lands'
(Dollars in Thousands)
Apr thru
,June 2019
July thru December 2019
County
High
Medium
High
Medium
Clallam
$969.1
$1,565.1
$1,002.1
$2,618.0
Clark
1,601.5
1,793.5
78.4
157.4
Cowlitz
4.9
4.9
40.3
40.3
Grays Harbor
374.5
847.6
1,130.4
1,457.0
Jefferson
53.1
146.7
52.2
286.2
King
1,444.2
1,444.2
154.9
154.9
Kitsap
33.5
33.5
1,374.3
1,374.3
Klickitat
11.0
11.0
10.1
10.1
Lewis
5,038.3
4,573.8
5,505.0
5,481.6
Mason
2,425.6
2,425.6
972.2
972.2
Pacific
60.7
60.7
2,952.3
3,005.5
Pierce
0.0
373.9
145.4
145.4
Skagit
1,388.9
2,390.8
860.1
2,273.5
Skamania
405.3
1,171.3
616.8
633.5
Snohomish
1,325.4
1,382.3
70.7
276.5
Stevens
23.7
23.7
71.4
71.4
Thurston
2,423.2
2,670.5
323.3
3,289.9
Wahkiakum
1,317.2
1,317.2
0.3
0.3
Whatcom
45.2
45.2
2,367.6
2,827.1
Totals
$18,945.3
$22,281.4
$17,727.7
$25,075.1'
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 March 2019.
These plans change with changes in the economy and the business needs of each purchaser.
Department of Natural Resources' region 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.
4/26/2019
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Table 3. Volume and Net Value of Timber under Contract on State Forest Transfer
and Purchase Lands for Harvest after Calendar Year 2019'
County
Volume (mbf)
Net Value
Clallam
8,873
$1,535,668
Clark
6,923
2,237,128
Cowlitz
668
168,224
Grays Harbor
3,391
361,885
Jefferson
7,603
2,360,445
King
10,566
3,517,262
Kitsap
0
Klickitat
0
Lewis
22,,126
7,505,128
Mason
0
Pacific
2,579
808,408
Pierce
0
Skagit
16,103
5,062,198
Skamania
0
Snohomish
12,190
3,359,577
Thurston
22,966
5,622,799
Wahkiakum
0
W hatcom
1,186
335,629
Totals
115,173
$32,874,350
Counties currently receive 75% of revenue from State Forest Transfer land
and 25.5% of revenue from State Forest Purchase land.
Note: The sales represented here are currently under contract as of March 2019.
This timber could be harvested at any time depending on market conditions and business
needs as determined by each purchaser. Sales 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.
4/26/2019