PLEASE HOLD Saturday Sept 10 from 10-12 for a facilitated, in person Community Conversation with the Board at the firehouse (NO zoom )
A New Day
At last week’s Water Board Meeting, Debra Birkby tentatively accepted the position of Board Chair. My sense is that one of her objectives is to encourage the Board to be more open to hearing the community’s perspective on things – but she is not sure if the rest of the Board will go along and if the community will be reasonable (fair enough concerns). If they do, I think she’ll stay.
At the meeting, the Community Interest Group made two public comments and Debra listened to and heard what was being said and took action on both. (What a breath of fresh air!)
First, a request was made to include the Cannon Beach Fire Department in a Fire Control and Management assessment as part of the Roads Assessment that is being done by NCLC.
After the meeting Debra reached out Ben Hayes (the Forester who has been contracted by NCLC to do the Road Assessment) and sent us back his response. “… I see no issue or increased cost with broadening that to include the fire chief / fire department …”
Second, a request was made to have work sessions where the community and the Board can constructively talk about the community’s perspective on Watershed topics and concerns.
Debra took advantage of the already scheduled “Work Session” agenda item to lead a 40 minute discussion with the Board and was successful in getting a “Community Conversation” to happen on September 10th. On Tuesday she met with 5 members of the Community Interest Group to talk about an Agenda.
These are promising steps!
Yesterday
There is still a bit of an uphill climb.
During the discussion about a Community Conversation, one of the other Board members said that … “the Financial plan is right now one of the lowest priority of the Board because of the fact that we are flush with money. We have funds to operate the forest more than we have operations to perform”
Five considerations to balance this “flush” perspective:
1. There is no current financial plan for the next 3-4 years, much less for any longer timeframe. Since the finance committee was disbanded, economic conditions have made last year’s financial plan out of date.
In last year’s plan, the below costs were place-holder estimates. Some of these estimates were from as long ago as 2019, when no one knew exactly what work needed to be done nor what it would really cost to do that work and inflation was under 2% rather than 8.5%. These costs are likely to be significantly higher.
12-month old Financial Plan for years 2022-2025
Road Construction Costs: $330,000
All other Watershed Costs: $484,000
2. The remaining $1,060,000 of COVID relief money CAN ONLY BE SPENT on road construction and permitting. (Click here for specifics of COVID FUNDING CONTRACT)
- The COVID money is held by Business Oregon, and will only be disbursed for actual eligible cost expenditures as identified in the contract. Current contract amounts eligible for disbursement are $900,000 for roads and $100,00 for permitting.
- In the previous financial plan, road construction costs for years 1-4 were budgeted at $330,000. No one knows what the actual constructions costs will be until the Roads Assessment is completed, and that is still a year out. Getting bids for actually doing the road work come sometime after that.
- It is still unclear whether any COVID money can be used for Watershed expenses other than road construction (as not all types of expenses are consistent with Federally legislated COIVD funding requirements). And, no matter what, access to that money will require a much clearer definition of the work required, accurate cost estimates, evaluation against federal requirements and a contract change. All of which will take time.
3. Unless something changes or we decide to log, we are looking at a 4-year deficit of at least -$234,000. In the previous financial plan, all non-road related Watershed expenses for years 1-4 were budgeted at $484,000. Unless the COVID relief funds contract can be re-negotiated to give us access to more of the COVID money and/or unless the 99 acres of mature trees are logged in 2023-2024, there will only be $250,000ish in donations to cover the $484,000 in expenses. That leaves a deficit of -$234,000.
4. The clock is ticking – all COVID money that isn’t disbursed by December 1, 2026 goes away. Whatever happens with the renegotiation of the COVID money, all of those funds have an expiration date. They will not be disbursed for any use after December 1, 2026.
5. Our financial decisions in the next 4 years will determine how soon we will need tax levies and/or rate increases to keep us out of debt, and it’s likely to be 2035 or earlier. By law, the COVID money cannot be used as a stewardship fund for the Watershed – it can only be used for certain “infrastructure costs” – and that runs out in 2026. Once 2026 rolls around, any stewardship fund that we might have will be dependent upon logging in 2023-2024 and/or donations. With the current economic conditions, recent financial projections by past members of the Finance Committee show that any stewardship fund from logging revenue and donations will last for no more than 8 years in the best case scenario. By 2035 at the latest, we will likely need tax levies or rate increases to pay the Watershed bills.
“Flush with money” does not appear to be an accurate characterization. (The cash isn’t even in our coffers.) Financial decisions made in these next 3 years will have significant implications for ratepayers in the near term and for the foreseeable future.
Here is an opportunity for a new day and to honestly engage with the community about the financial realities of today and how the alternatives for the next 3-4 years will fundamentally define the path for at least 28 years (which is the next realistic opportunity for any logging revenue). Since operation costs for the Watershed until 2050 will likely have to come out of the pockets of the rate payer, it is prudent to make decisions today that have a time horizon of more than the next 2-3 years.
The Opportunity for a Different Path
Perhaps under Debra’s leadership, the Board will put value in complete, accurate financial reporting to the community and reconvene a finance committee that understands the importance of longer than a 3-year time horizon.
And from a broader perspective, there are lots of bright, energetic people in this community that care deeply about the Watershed, that have relevant and needed expertise, and that are willing to pitch in and contribute. All they want is to be told the truth and to be heard. And I suspect that Debra, if others follow her lead, will find a way to make that happen and tap the resource that is the community.
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