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<div class=Section1>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'>Private Forests News list subscribers:<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'>State Forester Marvin Brown sent this message to ODF staff
Thursday afternoon, detailing preliminary ODF responses to the budget
reductions implemented following the release of the State Economist’s revenue
forecast this week.<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'>Kevin Weeks<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'>Oregon Department of Forestry<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'>(503) 945-7427<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'><o:p> </o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'> >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>.<o:p></o:p></span></p>
<p class=MsoNormal><span style='font-size:11.0pt;font-family:"Calibri","sans-serif";
color:#1F497D'><o:p> </o:p></span></p>
<table class=MsoNormalTable border=1 cellspacing=0 cellpadding=0 width="100%"
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<tr>
<td valign=top style='border:none;border-bottom:solid #E8EAEC 1.0pt;
background:#F8F8F9;padding:1.5pt 5.25pt 3.75pt 5.25pt'>
<p class=MsoNormal style='margin-top:4.5pt'><b><span style='font-size:8.0pt;
font-family:"Tahoma","sans-serif";color:#616A76'>Body:<o:p></o:p></span></b></p>
</td>
<td valign=top style='border:none;border-bottom:solid #E8EAEC 1.0pt;
background:#F8F8F9;padding:1.5pt 5.25pt 3.75pt 5.25pt'>
<div>
<p class=MsoNormal style='mso-margin-top-alt:4.5pt;margin-right:0in;
margin-bottom:12.0pt;margin-left:0in'><strong><span style='font-family:"Verdana","sans-serif";
color:#4F6128'>Message from Marvin and the Executive Team</span></strong><span
style='font-size:8.0pt;font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>Hi everyone – </span><span style='font-size:8.0pt;font-family:
"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>We all got another reminder this week that our economic troubles
are far from over, and that tax revenues to state government are inadequate
to sustain services at their current levels.</span><span style='font-size:
8.0pt;font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>As you’ve probably seen in the news, the latest state revenue
forecast, released on Tuesday, showed continued weakness in the economy and
unemployment persistently above 10 percent in Oregon, even though the
recession is officially over.</span><span style='font-size:8.0pt;font-family:
"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><strong><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>A new budget gap.</span></strong><span style='font-size:10.0pt;
font-family:"Verdana","sans-serif";color:black'> The forecasts have been
showing for some time that agencies will need to cut their budgets sharply
for the two-year budget period beginning July 1, 2011. But Tuesday’s forecast
raised an additional challenge: Revenue for the current biennium is
substantially below earlier estimates, and state government needs to reduce
General Fund spending by about $577 million to keep the 2009-2011 budget in
balance.</span><span style='font-size:8.0pt;font-family:"Tahoma","sans-serif";
color:black'><o:p></o:p></span></p>
<p><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>That’s about 4.5 percent of the state’s General Fund budget
overall, but about 9 percent of the money available to spend during the rest
of the biennium. No special session of the Legislature is currently planned
to readjust the budget. However, the law does allow the Governor to order
across-the-board cuts to balance the budget, and Governor Kulongoski has
directed agencies to reduce their remaining 2009-2011 budgets by 9 percent.</span><span
style='font-size:8.0pt;font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><strong><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>Limited discretion.</span></strong><span style='font-size:10.0pt;
font-family:"Verdana","sans-serif";color:black'> In the other budget
reduction processes we’ve dealt with recently, we’ve sketched out scenarios
for the Legislature’s consideration, with some leeway to propose where within
the agency we would reduce spending. The current process provides much less
flexibility. The Governor has authority only to reduce appropriations across
agencies by an equal percentage.</span><span style='font-size:8.0pt;
font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>For us, this means General Fund reductions of about $226,800 in
Private Forests, $1.4 million in Fire Protection, and $158,600 in Agency
Administration. The total reductions in Fire will actually be larger, because
General Fund losses there trigger additional losses in landowner assessments.</span><span
style='font-size:8.0pt;font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>There is no General Fund appropriation in the State Forests
Division, which is sustained through timber sale revenue.</span><span
style='font-size:8.0pt;font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><strong><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>Time is short.</span></strong><span style='font-size:10.0pt;
font-family:"Verdana","sans-serif";color:black'> With just about half of the
biennium remaining in which to make the necessary cuts, the Governor has
asked agencies to submit their plans by June 8, so they can be implemented
July 1.</span><span style='font-size:8.0pt;font-family:"Tahoma","sans-serif";
color:black'><o:p></o:p></span></p>
<p><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>The Executive Team has started work on these plans. As we’ve
done in the past, we’ll strive to provide the best possible services with the
resources we have, while minimizing the need to reduce our workforce – our
most valuable asset. Here’s where we are in preparing our plans:</span><span
style='font-size:8.0pt;font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><strong><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>Private Forests.</span></strong><span style='font-size:10.0pt;
font-family:"Verdana","sans-serif";color:black'> It appears we can reach our
target by substituting federal funds for General Fund in some stewardship
forester positions; reducing spending on services and supplies; and holding
some positions vacant, including the Division Chief position, which Jim Paul
held before his recent move to the Department of State Lands.</span><span
style='font-size:8.0pt;font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>The fund shift in the stewardship forester positions changes
those jobs, eliminating Forest Practices administration in favor of the work
specified by the federal funding, such as bark beetle treatment.</span><span
style='font-size:8.0pt;font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>The plan would also reduce Private Forests funds that are used
for projects in the Forest Resources Planning Program.</span><span
style='font-size:8.0pt;font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><strong><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>Fire Protection.</span></strong><span style='font-size:10.0pt;
font-family:"Verdana","sans-serif";color:black'> Reducing initial attack
always raises the possibility that more fires will escape, costing more in
the long run. Conditions are very different in our protection districts
across the state, and there’s no one-size-fits-all solution.</span><span
style='font-size:8.0pt;font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>Each district and Headquarters will be assigned a proportionate
share of the overall reduction target, and will work with stakeholders on the
best ways to achieve the needed reductions. Instructions are going out to
districts today, and plans will be due back in Salem by June 2.</span><span
style='font-size:8.0pt;font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><strong><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>Agency Administration.</span></strong><span style='font-size:
10.0pt;font-family:"Verdana","sans-serif";color:black'> It appears we can
reach our target by eliminating funding for several information technology
projects. These include a replacement for the Track-It problem-tracking
system, and new tools to improve IT security.</span><span style='font-size:
8.0pt;font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><strong><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>The long-term outlook.</span></strong><span style='font-size:
10.0pt;font-family:"Verdana","sans-serif";color:black'> As we’ve discussed in
earlier messages, it’s time for a fresh approach to funding public forestry
services in Oregon – one that eliminates our dependence on an
ever-diminishing slice of the state’s General Fund. </span><span
style='font-size:8.0pt;font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>It may seem like a tough time to look for new funding sources.
But this latest revenue forecast, on top of the substantial reductions we’ve
already experienced, only bolsters the case.</span><span style='font-size:
8.0pt;font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>We’ll need to think creatively and work with a wide range of
stakeholders – with anyone who has an interest in the forests that are so
important to Oregon’s identity and wellbeing. We’ve already begun discussions
with the Board of Forestry, legislators, and interest groups.</span><span
style='font-size:8.0pt;font-family:"Tahoma","sans-serif";color:black'><o:p></o:p></span></p>
<p><span style='font-size:10.0pt;font-family:"Verdana","sans-serif";
color:black'>Once again, we thank you for everything you do for Oregonians
and their forests, in the face of considerable change, uncertainty and
reduced resources. We’ll keep you updated as we face the current budget
challenges, and as we search for a better way to support our agency’s
important work.<br>
<br>
Take care, <br>
<br>
Marvin and the Executive Team</span><span style='font-size:8.0pt;font-family:
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