Forestry failure: Almost broke, Oregon forestry department seeks emergency IV


Seven months into the state’s two-year budget cycle, Oregon Forestry Department officials say they have exceeded most of the budget approved by lawmakers for the entire biennium and call on legislators an emergency cash injection.

A significant injection – from $ 52 million to $ 132 million – otherwise, according to agency officials, they will have exhausted their budget by March.

It’s a quick fix for a structural problem, and it comes as lawmakers and the governor seek to expand the agency even further. They are sponsoring bills that would strengthen the agency’s firefighting and forest restoration capacities – beyond immediate budget demands. And such plans come without any coherent strategy to ensure that the agency is on a solid financial footing and has the resources and management means to do its job.

In the short term, agency executives are looking for a minimum of $ 52 million and up to $ 132 million, money they believe is needed to keep the doors open and run regular programs; pay a consultant hired to help them get their finances in order; and to cover the cost of fighting fires during the upcoming 2020 fire season.

The wide range of demand reflects the variability in agency firefighting costs. The bare minimum is a forecast of $ 20 million for 2020, with a high end of $ 92 million. However, the costs of fires have exceeded this figure in the past and have averaged $ 70 million per year since 2013.

“This is new ground for us,” said Joy Krawczyk, spokesperson for the agency. “We haven’t made a request like this in the past, especially in a short session, so we haven’t really heard how it’s going to evolve.”

Senator Betsy Johnson, D-Scappoose and co-chair of Way and Means, said the committee has yet to discuss the agency’s budget requests in any meaningful way.

“We are only reacting to the plethora of demands that are coming in,” she said. “There are some things we’re going to have to do for forestry, otherwise it’s going to go broke… We’re going to have to do it quickly.

The agency’s problems come as no surprise. It has been on the verge of financial collapse for months due to delays in billing and collecting reimbursements for firefighting costs, mostly from the federal government. The agency currently has $ 103 million in bad debts, of which $ 17 million dates back to 2015. Of the $ 103 million, the agency still has to bill more than half.

To address the resulting cash flow problem, agency executives have sought help on a variety of fronts. They borrowed money from the treasury, asked the Administrative Services Department to cover its payroll, and tapped internal reserves which mostly belong to the agency’s public forestry program. The agency repaid its payroll loans in January and said it planned to repay its $ 25 million line of credit to the Treasury in April. During this time, he cleared heavily on state forests to keep the money at the door.

The whole issue is called the fire loan, and was a big deal for the US Forest Service until Congress gave it access to disaster funding to cover its significant fire costs. The Oregon Forest Department insists it needs a similar and permanent solution. At a time when fire seasons are still significant, agency executives say it no longer has the financial capacity to float those costs and pay its suppliers while awaiting reimbursement from federal authorities. Meanwhile, the embezzlement of money from other programs undermines work in these areas.

State Forester Peter Daugherty told lawmakers in a recent letter that the agency is making a number of process improvements and staffing changes to speed up its billing and has implemented cost containment at scale. from the agency to save money. “However,” he wrote, “the much bigger problem is how to finance forest firefighting which cannot be solved by operational adjustments or process improvements.”

In the absence of a more permanent solution, Daugherty turned to the Ways and Means Committee, which is already asking for monthly reports detailing the agency’s current financial situation. Daugherty is also on a plan to improve the performance of the Forest Council, which was caught off guard by the scale of the agency’s financial crisis last year.

The agency’s emergency budget request comes as Governor Kate Brown and other lawmakers seek additional money to bolster the agency’s firefighting capacity. Brown wants to add 68 more positions at a cost of about $ 20 million per year. Another forestry modernization bill sponsored by Senate Minority Leader Herman Baertschiger R-Grants Pass proposed to add 50 new firing stations and modernize the department’s aviation fleet at unspecified cost.

Brown also wants to dramatically increase the number of acres of forest treated each year through thinning and prescribed burns to increase the resilience of forests to wildfires. A wildland fire council it formed last year recommends that the state treat 300,000 acres per year for the next 20 years. It’s a huge boost that comes with an annual price tag of $ 200 million, although the state would seek equivalent dollars for forest treatment on federal lands. This year, the governor is hoping for some $ 25 million as a first bite to tackle the much larger problem.

“I expect at least one-on-one correspondence from our federal partners for any money Oregon invests,” Brown told members of the Senate Committee on Wildland Fire Reduction and Recovery at a hearing this week. last. She met these federal partners on Sunday in Washington DC

However, it is not clear where Oregon plans to raise all this money, or how much it will happen in the short legislative session. Critics have expressed concern over the writing of new checks and the expansion of an agency whose finances have been slashed in recent years, although the agency’s firefighting program is well regarded.

The Department of Administrative Services entered into a contract for $ 700,000 with a CPA firm, Macias, Gini and O’Connell, to evaluate the Department of Forestry’s fire financing operations and recommend improvements. This process will not be completed in time for the current legislative session. Brown’s legislation also includes a funding study to determine how the state might fund its proposed treatment program and how other states fund their annual fire costs.

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