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<DIV dir=ltr align=left><FONT face=Arial><SPAN class=580321122-11022009>ODF
Private Forests News members:</SPAN></FONT></DIV>
<DIV dir=ltr align=left><FONT face=Arial><SPAN
class=580321122-11022009></SPAN></FONT> </DIV>
<DIV dir=ltr align=left><FONT face=Arial><SPAN
class=580321122-11022009>Associate State Forester Clark Seely sent this update
message to ODF staff Wednesday about the evolving budget reduction situation for
both the present 2007-2009 budget and the pending 2009-2011
budget.</SPAN></FONT></DIV>
<DIV dir=ltr align=left><FONT face=Arial><SPAN
class=580321122-11022009></SPAN></FONT> </DIV>
<DIV dir=ltr align=left><SPAN class=580321122-11022009><FONT face=Arial>Please
note that the scope of budget concerns have expanded into the future of the
Forest Development Fund, potential ODF layoffs and federal support
from the national stimulus package being considered in
Congress.</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=580321122-11022009><FONT
face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=580321122-11022009><FONT
face=Arial>Questions about the Private Forests News service?
Contact:</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=580321122-11022009><FONT
face=Arial></FONT></SPAN> </DIV>
<DIV dir=ltr align=left><SPAN class=580321122-11022009><FONT face=Arial>Kevin
Weeks</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=580321122-11022009><FONT face=Arial>Public
Information Officer / Private Forests Division </FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=580321122-11022009><FONT face=Arial>Oregon
Department of Forestry</FONT></SPAN></DIV>
<DIV dir=ltr align=left><SPAN class=580321122-11022009><FONT face=Arial>(503)
945-7427</FONT></SPAN></DIV><BR>
<DIV class=OutlookMessageHeader lang=en-us dir=ltr align=left>
<HR tabIndex=-1>
<FONT face=Tahoma size=2><B>From:</B> SEELY Clark W <BR><B>Sent:</B> Wednesday,
February 11, 2009 2:01 PM<BR><B>To:</B> ALL FORESTRY<BR><B>Subject:</B> FYI -
Department Budget Planning Update<BR></FONT><BR></DIV>
<DIV></DIV>
<DIV>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Hi everyone<SPAN
class=453574521-11022009>...w</SPAN>e’re writing <SPAN
class=453574521-11022009>today </SPAN>to give you another update on the budget
situation, our reduction planning, and next steps.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Uncertainty – and continuing
deterioration in the economic outlook – are realities we continue to face. If
anything is certain, it’s that the information in this message will change in
the coming weeks and months. Tough decisions and actions lie ahead as the
Legislature determines how to meet the state’s highest priority needs during
this recession.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">We’ll continue to keep you posted
as we adapt to the latest developments and prepare for the future.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal">2007-09 outlook remains difficult; revenue
update coming soon<o:p></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><o:p> </o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">The Governor and the 2009
Legislature are working to address shortfalls for the current biennium, which
ends on June 30 of this year. An update released in late January estimated that
the state’s General Fund could be 3.7 percent to 6.3 percent short of the amount
necessary to continue current services state government-wide through June 30 – a
wider gap than previous forecasts had suggested. The state economist will
release his next forecast on February 20, and we’ll update you again at that
time.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">In the meantime, the
Legislature’s joint Ways & Means Committee will hold hearings this week on
the 2007-09 situation and possible reductions. The Committee will hear an
overview of the natural resources program area on Thursday.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Reductions are amplified when
they must be taken entirely in the last several months of a two-year budget
period. Accordingly, a biennial General Fund reduction of 5 percent amounts to a
cut of about 25 percent of the funds actually remaining for the rest of this
biennium. The effect is further amplified by the loss of matching dollars when
General Funds are cut.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">We’ve taken various actions to
save money this biennium, including holding positions open and deferring vehicle
replacement payments in <st1:place w:st="on"><st1:PlaceName
w:st="on">Private</st1:PlaceName> <st1:PlaceType
w:st="on">Forests</st1:PlaceType></st1:place>, and suspending Sudden Oak Death
treatments. But balancing the 2007-2009 budget is expected to require additional
action, possibly including early implementation of reductions in alignment with
the Governor’s Recommended Budget for 2009-2011.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">It’s important to remember that
as we make reductions in our operating programs this biennium or next, we will
also take corresponding reductions in administrative services programs based on
reduced services required.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Additional information about the
2007-09 situation is available on the ODF Web site, at<SPAN
style="mso-spacerun: yes"> </SPAN></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><A
href="http://egov.oregon.gov/ODF/docs/2007_09_Red_Summary.pdf">http://egov.oregon.gov/ODF/docs/2007_09_Red_Summary.pdf</A></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal">State Forests Division faces significant
revenue problems<o:p></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><o:p> </o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Although much of our planning has
focused on expected reductions in General Fund, which occurs in our <st1:place
w:st="on"><st1:PlaceName w:st="on">Private</st1:PlaceName> <st1:PlaceType
w:st="on">Forests</st1:PlaceType></st1:place> and Fire programs, we’re also
seeing serious erosion, due to the economy, in the timber sale revenues that
fund State Forests.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Studies of various scenarios
suggest that our Forest Development Fund, which captures these revenues, could
run out by 2010 or 2011 without cost-saving measures beyond those already in
place, or a recovery in the timber market.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">A forecast issued last week
predicts a 30 percent to 40 percent drop from 2007-2009 to 2009-2011. This is a
more significant decline than earlier forecasts. Given current economic
conditions, the short-term outlook is likely to continue to deteriorate. The
State Forests Division will update revenue forecasts quarterly, monitor
expenditures closely, and continue to implement additional cost-saving measures,
including planning for staff reductions.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"></SPAN> </P>
<P class=MsoBlockText style="MARGIN: 0in 27pt 0pt 0in">Factors we must consider
include managing the risks of timber sales going into default, our ability to
sell timber in the current market, and shifts in the Governor’s Recommended
Budget of Forest Development Fund dollars to other uses within ODF. </P>
<P class=MsoBlockText style="MARGIN: 0in 27pt 0pt 0in"><o:p> </o:p></P>
<P class=MsoBlockText style="MARGIN: 0in 27pt 0pt 0in">Harvest levels on the
state forests are another key factor. While the Board of Forestry seeks
long-term increases on the Tillamook and Clatsop state forests, a reduction is
necessary to bring <SPAN style="COLOR: black">harvests to levels that are
sustainable under current management plans.</SPAN></P>
<P class=MsoBlockText style="MARGIN: 0in 27pt 0pt 0in"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">State Forests Division leaders
and Area Directors are developing guidance for further budget reductions that
will be needed through 2010 and beyond. Budget units will be directed to develop
reduction options through the normal fiscal budgeting process. Direction will
come initially through area staff meetings this week. As with our other budget
challenges, the outlook and our plans will likely continue to change. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><SPAN
style="mso-spacerun: yes"></SPAN> </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><o:p> </o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal">Seniority information to be
distributed<o:p></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">As we’ve discussed in previous
messages, the Governor’s Recommended Budget for 2009-2011 includes a 10 percent
General Fund reduction for ODF, focused in Private Forests. The Legislature has
directed agencies to prepare plans for additional reductions above this
level.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Although we won’t know for
certain what our 2009-2011 budget will look like until the Legislature completes
its work this summer, as you know, we have been preparing for reductions for
some time. We’re keeping positions vacant, trying to find more secure positions
for employees in positions that will likely lose funding, and undertaking other
measures.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Although we will do our utmost to
avoid or limit layoffs, if they are necessary, for union employees they must be
accomplished according to specific provisions of the labor contract. Seniority
is a key factor in this process.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Many of you have asked for
information that will help you ascertain where you stand in terms of seniority.
Supervisors will be sharing this information in the coming weeks in
conversations with employees most likely to be affected by reductions. It’s
important to keep in mind that this is not the beginning of a layoff process,
but information that may help employees in their own planning. Should layoffs
become necessary, our Human Resources Program will provide specific direction,
notice, options and assistance to affected employees.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">More information about ODF
reduction scenarios for 2009-11 is available on the Web at<SPAN
style="mso-spacerun: yes"> </SPAN><A
href="http://www.oregon.gov/ODF/docs/2009_11_Red_Summary.pdf">http://www.oregon.gov/ODF/docs/2009_11_Red_Summary.pdf</A></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal">Federal stimulus dollars will
help<o:p></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"> </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">You’ve no doubt read or heard
news reports about efforts at the federal level to help stimulate the economy.
Congress passed one large stimulus bill last fall, and is currently debating
another. At a time when reductions dominate our outlook, the federal stimulus
action represents some unanticipated additional funding.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Based on the legislation that has
already passed, it continues to appear that about $4 million will be available
for fuel reduction treatments in <st1:place w:st="on"><st1:State
w:st="on">Oregon</st1:State></st1:place>. These funds are in addition to the
normal Community Assistance, Western State Fire Managers, and State Fire
Assistance dollars that we receive.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">There is a very strong
expectation that states rapidly move these new funds into projects. We plan to
accomplish this through a mix of existing but unfunded grant proposals, and new
proposals submitted by districts. Our goal is to submit a complete package for
use of these funds to the U.S. Forest Service by the beginning of March, and the
funds may arrive as soon as April. We anticipate these funds might support as
many as five or six positions in the field to administer fuel treatment projects
around the state.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Future federal action may bring
additional dollars. We don’t know at this point. In any case, we are focusing on
how best to position ourselves to compete for and use any future stimulus
packages.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal">The bigger picture for ODF and its
employees<o:p></o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><B
style="mso-bidi-font-weight: normal"><o:p> </o:p></B></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Like virtually all organizations,
ODF will need to adjust to an environment in which funding is very tight. We
need a clear understanding of what we can and should achieve with the resources
we have, and of the best way to organize our agency to reach those goals. In
addition to the strategic discussions occurring at the executive level, we’re
also working with the Board of Forestry on these questions.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Our economy will always have ups
and downs, and we will always adjust to them. Whatever our level of staffing and
funding, we need a clear picture of how we can best serve the public, and of
where we should head in the future.</P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">We’ll also continue to share
information, and to seek solutions that work best under the circumstances for
employees and for the agency. </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Thanks very much for your
continued hard work in the face of some of the toughest and most uncertain times
we have seen. If you have questions or suggestions, don’t hesitate to contact
your supervisor or any of us. <SPAN style="mso-spacerun: yes"> </SPAN></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p></o:p> </P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in 0in 0pt">Jim Paul<SPAN
style="mso-spacerun: yes"> </SPAN>Paul
<st1:City w:st="on"><st1:place w:st="on">Bell</st1:place></st1:City><SPAN
style="mso-spacerun: yes">
</SPAN></P>
<P class=MsoNormal style="MARGIN: 0in -0.25in 0pt"><SPAN
style="mso-spacerun: yes"> </SPAN>Private Forests
Division Chief<SPAN
style="mso-spacerun: yes">
</SPAN>Fire Protection Division Chief</P>
<P class=MsoNormal style="MARGIN: 0in -0.25in 0pt"><o:p> </o:p></P>
<P class=MsoNormal style="MARGIN: 0in -0.25in 0pt 0in"><st1:City
w:st="on">Nancy</st1:City> Hirsch<SPAN
style="mso-tab-count: 5"> </SPAN><SPAN
style="mso-spacerun: yes"> </SPAN><st1:place
w:st="on">Clark</st1:place> Seely</P>
<P class=MsoNormal style="MARGIN: 0in -0.25in 0pt 0in">State Forests Division
Chief<SPAN
style="mso-tab-count: 3">
</SPAN><SPAN style="mso-spacerun: yes">
</SPAN><st1:place w:st="on"><st1:PlaceName w:st="on">Associate</st1:PlaceName>
<st1:PlaceType w:st="on">State</st1:PlaceType></st1:place> Forester</P>
<P class=MsoNormal style="MARGIN: 0in -0.25in 0pt"><o:p> </o:p></P>
<P class=MsoNormal
style="MARGIN: 0in -0.25in 0pt 0in"><o:p> </o:p></P></DIV></BODY></HTML>