Managing and running a forest can be complex. Like with any business, there are a number of moving parts and managing them all together typically requires a level of specialized knowledge. What looks easy of the surface many not always be. That’s why it’s important to have an experienced leadership team with a breadth of knowledge to set direction and to oversee staff. Otherwise mistakes and miscommunication can happen, even with seemingly simple things.
A case in point is the recent posting on the Arch Cape Falcon Cove Community Web Site (see below picture).
The information that is posted, as of April 23, says ….
“The Arch Cape Forest Finance Committee has estimated that stewardship of the Forest, including maintenance of necessary roads, drainage, invasive species control, insurance and administration, would cost about $60,000 per year (in current dollars).
The Arch Cape Water District has funding in hand for those costs for about the next 10 years, and would like your input on sources of funding after 2033.”
Whereas in reality … funding IS NOT in hand
Let’s assume that this was an innocent error …
To get this information right requires an understanding of the Finance Committee’s financial plan and the Finance Committee’s logging plan and how the two of them come together.
Per the Finance Committee’s plan, $60,000 is an estimated average (without inflation) across a 44 year period. In actuality, operating costs are projected to be higher in the early years of operating the forest. Those operating costs from 2022 – 2033 are projected to be $833,000-ish, and that projection is based on only a 2% inflation rate for each year. With inflation current running at over 8% those costs are likely to be much higher. (At an average annual rate of 5% inflation those costs will be in excess of $1,000,000.)
According to the Board’s funding & revenue projections, along with the information they discussed in April’s recent budget meeting, there is funding to pay for one-time “start-up’ costs, but there is insufficient funding to pay for the $835,000 in operating costs during the 2022-2033 period. That is why the logging plan calls for 100 acres to be logged between 2023-2024, where the logging revenue goes to build a fund that can pay off some of these operating costs. According to the Finance Committee’s plan, paying for the remainder of those costs are projected to require a tax levy or rate increases.
Bottom line, the money is not “in hand”. And it is important for us, the owners of the forest, to know that. Making choices or decisions on misinformation like this is problematic.
It is understandable how a Board member/volunteer staff responsible for writing an outreach piece might not know all this. And it is understandable how a very part time, volunteer elected Board isn’t able to track all this and prevent mis-information. But an $833,000 miscommunication to the owners of the forest can’t be acceptable.
Either way, we need an experienced leadership team
If this level of confusion happens just when talking about the forest, imagine what is likely to happen when it comes to actually operating the forest. To prevent these types of things from happening, whether innocent error or intentionally misleading, we need an experienced leadership team so that everything runs smoothly in this new forest business of ours.
A.C. Water District Board (Go to Home Page) 
3 responses to “#5 – $833,000 – Innocent Error or Intentionally Misleading?”
If board members do not understand the financial plan, and are mis-representing it to the community, what else don’t they understand and mis-represent. Where will the needed money come from to make up the huge deficit to manage the forest?
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Have maintenance costs of other community forests on the north coast been investigated to determine whether the proposed costs are reasonable or unreasonable? (Nehalem, Astoria, other?)
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There has been no vetting of the Operating Financial Plan that came out of the finance committee and was approved by the Board. During the planning process 12-18 months earlier, Greenwood reviewed some of the planning assumptions.
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