Because the Oregon Department of Forestry did not manage more than 600,000 acres of state forest lands for maximum timber harvesting between 2004 and 2019, the 15 counties in which those forests are located lost about $674 million in revenue, appraiser Richard La Mont testified Wednesday in Linn County Circuit Court.
La Mont, who owns Timberland Appraisal in Corvallis, has more than 30 years’ experience appraising timber lands, both private and public. He testified Tuesday and Wednesday in a $1.4 billion breach of contract lawsuit filed by 14 forest trust counties and 151 taxing districts.
Also on Wednesday, the trial over the lawsuit reached a turning point as the plaintiffs rested their case and attorneys for the state called their first witness.
The plaintiffs allege that since 2001, state forests have not been managed with timber harvesting as a top priority, as had been the case from 1941 until 1998, when a new definition of "greatest permanent value" was approved by the state.
Linn County’s estimated revenue loss is about $37 million, according to La Mont. Although Clatsop County is home to a large percentage of state forest lands, it is not participating in the class action lawsuit. La Mont said he deducted 10% from his tally to recognize that fact.
Earlier this week, Mark Rasmussen of Portland consulting firm Mason, Bruce & Girard, Inc., testified that if that the state had harvested timber with the goal of maximum wood extraction on a sustainable basis — following environmental and wildlife guidelines found in the state's Forest Practices Act — the amount of timber harvested could have increased by some 3.1 billion board feet. A board foot is a board 12 inches wide, 12 inches long and 1 inch thick. A log truck hauls about 4,000 board feet of timber per load.
Counties receive two-thirds of income from timber sales on the state forests. The state receives one-third as a management fee in an arrangement that started in the 1930s, when counties deeded thousands of acres of burned and cut-over land to the state. As part of that arrangement, the state agreed to manage the lands for the "greatest permanent value," which for decades was assumed to call for maximizing timber harvests.
La Mont said his assignment for the trial was to take Rasmussen’s data and put a monetary value on it based on long-term log price averages. Many factors go into the value of a timber sale, he explained, including species and age of tree stands, land slope, road and mill access, and type of logging process that can be used.
On private timberlands, La Mont said, clear-cuts are prevalent on about 90% of Douglas fir stands. He said that calls for removal of most trees, except those required to be left for wildlife habitat by the Forest Practices Act.
La Mont said clear-cuts occur on about 54% of the state forest lands and 46% are partially cut or thinned. He estimated that the state could have added about 7% additional revenue to its timber harvests by increasing its clear-cut prescriptions.
He added that Rasmussen’s numbers were compiled using a 90% clear-cut basis to maximize wood extraction.
Attorneys for the Department of Forestry objected to the use of the data, because the model was based on only one of four management alternatives — which prioritized timber harvesting over all other forest factors — but was not actually the alternative adopted by the Board of Forestry.
Judge Thomas McHill allowed the information to be presented.
In addition to what La Mont called the actual losses to the counties, he was asked to project future economic losses over 50 years. He estimated the counties would lose almost $1.1 billion.
In cross-examination, Elleanor Chin, senior assistant attorney general, noted that La Mont based his loss estimate on Rasmussen's numbers. If Rasmussen's numbers were incorrect, she suggestion wouldn't La Mont's estimate be wrong as well? She also challenged whether such high harvest levels were possible given the constraints on state forest lands such as wildlife and fisheries issues.
La Mont said his job was to put a monetary value on the harvest numbers, not to compile his own timber harvest projections. And, he added, analysis of Rasmussen’s information indicated that those harvest levels were possible.
Chin asked La Mont about factors that go into timber sales and prices, noting such examples as extremely steep slopes in the Tillamook State Forest as well as tree damage on the same forest caused by Swiss needle cast, a foliage disease. She also asked if a tree that could have been harvested in 2004 was not harvested for several years, would it not have greater value when harvested, because it contained more board feet.
Not necessarily, La Mont replied. Due to declining timber harvesting on U.S. Forest Service and Bureau of Land Management forests since the early 1990s, Oregon mills have retooled to handle smaller-diameter trees. He said that if the state allows its trees to grow too large, the opportunity to mill them decreases due to size; therefore, their value is likely to decrease.
Upon re-direct, plaintiff's attorney John McGrory asked if timber prices would likely had gone down had the state increased its annual timber harvest, creating a possible glut in the market.
La Mont said the state lands amount to less than 3% of all forest lands in Oregon. Had the annual harvest increased to 300 million board feet, it would still be only a small portion of a 3 billion board foot annual market place. Any price fluctuation would have been “negligible.”
Late on Wednesday, the state presented its first witness, Elizabeth Dent, the state forest division chief.
Dent talked about her career in both public and private sectors and her educational and career backgrounds in aquatic species, geography and forest hydrology. She has held her current position for five years and previously was a deputy chief.
She discussed how the greatest permanent value rule is applied to all aspects of forest management and said about 98% of the department’s budget comes from timber sales.
According to Dent, the Oregon Department of Forestry's state forest division has more than 190 positions, the majority dealing in some fashion with timber sales and silviculture — forest regeneration. There are eight wildlife biologist positions, although some aren't filled.
Dent said the majority of the state forest lands are trees in the 50- to 70- year age range. Only about 1% are considered old growth, in the 175- to 250-year-old range. She explained that this is because the state did not begin acquiring the forest lands until the 1930s through the 1960s, and most of the lands were burned over or cut over and had to be planted to create new timber stands.
She said the forestlands — the bulk of which are in northwest Oregon — present a broad range of soil types, slopes, erosion potential, stream issues and wildlife and fish habitat requirements. They also host a variety of tree species including Douglas fir, hemlock and alder, each with its own traits, growth issues and harvest values.
Dent will return to the witness stand at 9:30 a.m. Thursday.