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Update for the July BNR meeting

Kyle BlumJuly 7, 2015

Board of Natural Resources Arrearage Subcommittee Report

Draft Subject to Change - July 2015

2 Draft Subject to Change - July 2015

Arrearage Subcommittee Report

Causes of the Arrearage

Purpose Review

Subcommittee Analysis Requests and Questions

Next Steps

3 Draft Subject to Change - July 2015

CAUSES OF THE ARREARAGEBoard of Natural Resources Update

4 Draft Subject to Change - July 2015

Riparian

Marbled Murrelet Long-term Conservation Strategy

Land Transactions

Arrearage SubcommitteeCauses of the Arrearage

5 Draft Subject to Change - July 2015

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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te T

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FDA RMCA Sustainable Harvest Budget Projection

Arrearage SubcommitteeCauses of the Arrearage

6 Draft Subject to Change - July 2015

SUBCOMMITTEE REVIEWBoard of Natural Resources Update

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Steps From RCW 79.10.330

Description Status

Step 1 Determine if there is an arrearage.

Completed

Arrearage of 438 MMBF

Step 2 Conduct an economic and environmental analysis of options providing for the greatest return to the trusts.

In Progress

Step 3 Board determines a course of action.

Post Subcommittee Recommendations

Draft Subject to Change - July 2015

Arrearage Subcommittee

8

SUBCOMMITTEE ANALYSIS REQUESTS AND QUESTIONS

Board of Natural Resources Update

Draft Subject to Change - July 2015

9 Draft Subject to Change - July 2015

Arrearage SubcommitteeAnalysis Requests and Questions Provide additional research on the history of arrearage

and what the board has done at the end of previous planning decades.

Determine the planning horizon the industry uses for log supplies, both short and long-term.

Provide additional research on the best times to sell an arrearage if such sale is determined to be in the best interest of the trusts.

Provide additional analysis on the economic factors of an arrearage.

Provide additional analysis on the impacts to the department and future harvests if the arrearage was sold.

10 Draft Subject to Change - July 2015

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

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Washington State Harvest Volume (MBF) with Export

State Private Federal and other public Export levels **

Data from Department of Revenue

Arrearage SubcommitteeAnalysis Requests and Questions: Additional Analysis for Economic Factors

11 Draft Subject to Change - July 2015

Data from Department of Revenue

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2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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Sustainable Harvest Value (millions)

Actual with out TLT Projected Actual with TLT

Arrearage SubcommitteeAnalysis Requests and Questions: Additional Analysis for Economic Factors

12 Draft Subject to Change - July 2015

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FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14

Har

vest

vol

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MB

F)

Fiscal Year

W.WA Sold 2007 SHC Planned W.WA

Arrearage SubcommitteeAnalysis Requests and QuestionsTimber Volume Sold

FY14 harvested ~450 MMBF from approximately 17,000 acres

Estimated Total Cost: $24.5 million- Direct Costs: ~$12 million presales and

compliance- Indirect Costs: ~$10 million to site prep,

plant, vegetation management, support staff, etc.

- Agency Admin: ~$2.5 million for rent, legal, IT support

13 Draft Subject to Change - July 2015

Arrearage SubcommitteeNext Steps

Policy Recommendations

Final Report to the Board of Natural Resources