Reforestation of Timberlands Board Meeting Minutes
Altavista, Virginia
Sept. 11, 2008
Reforestation of Timberland (RT) Board Attendees: Jim Kuykendall, Ann Duff, Grant Cosner, Mark Martin, Ken Morgan, Earl Pickett, Greg Scheerer, Cliff Somerville. Charles Rose did not attend.
Virginia Department of Forestry (VDOF) Attendees: Todd Groh, Dean Cumbia, John Carroll, Ron Jenkins, Becky Woodson, Chuck Hutsell, and Jim Jarvis
Guests
John Lanier – Smurfit-Stone
The RT Board meeting was called to order @ 10:05 by Chairman Jim Kuykendall
Jim Kuykendall opened the meeting by asking each Board member to introduce themselves and giving a brief bio.
Approval of Minutes from March 2008 Meeting
Ken Morgan made motion to approve minutes as written; Mr. Pickett seconded the motion and unanimous approval. Chairman Kuykendall reminded the Board about the Anti-Trust statement.
State Budget
All state agencies were asked to develop agency budget strategies for 5, 10 and 15% reductions. The state budget situation is pretty grim but Mr. Jenkins was not able to give any specifics because the Department was still in the process of developing the scenarios. He suggested it will not business as usual in terms of the agency but that the Department will pull through.
Ron Jenkins mentioned that the State Agencies were required to submit their strategies for cuts to Planning and Budget by September 26. He reminded the Board that VDOF has had back to back years of cuts in FY 07 and 08. The Department had already developed a strategy for 1.5% and with the next reforecast of revenues along with strategies, our agency will be able to function near normal with a 5% cut. Some of the budget cutting funds would be offset by the current 24 vacancies within the Department.
Ann Duff asked what would happen to the Reforestation of Timberlands (RT) funds, and reminded the members that RT was cut over 70,000 dollars last year. Mr. Jenkins said that everything including General Funds, RT funds and personnel layoffs could be considered.
John Carroll assured the Board members that once a decision was reached by the Governor’s office, that we would relay the information to them.
Mr. Morgan asked if the Department feels that Governor Kaine has been educated adequately in importance of forestry, forest health, management, etc. John Carroll indicated that the Governor’s knowledge of forestry has improved since Secretary Bloxom was appointed. He said that the Deputy and Secretary understand RT funding.
VDOF Regional Realignments
John Carroll, Deputy State Forester, explained the new Regional boundaries for VDOF resulting in the state being combined into three Regions from the previous six Regions: Eastern Region, Central Region and the Western Region. Mr. Carroll detailed the history of the Regional realignment, by stating that old Regions 3 (Charlottesville) & 4 (Farmville) were the pilot regions to be combined.
He also mentioned that the Department’s initial move in this direction was not budget related; the VDOF was just trying to improve efficiencies. All Regional offices are old and are in need of replacing. There would be minimal county realignments do to the Regional merges with Pittsylvania, Spotsylvania, and Stafford Counties moving to the Central Region, and Powhatan and Goochland Counties moving to the Eastern Region.
Jim Kuykendall expressed some concern about the isolation of Northern Shenandoah in the Central Region, and Mr. Carroll said that the Department would work to insure that all areas would be recognized. He also said that the Department had considered four Regions, but this arrangement would produce the same results. There will be a minimal number of employees affected by the mergers. The official start date for the new Regional alignment is October 1.
Ann Duff asked about the Western Region and who would be the Regional Forester. John Carroll stated that Ed Stoots will be the Western Regional Forester working out of the Salem office, Ed Zimmer will be the Central Regional Forester working out of the Charlottesville office and Dave Slack will be the Eastern Regional Forester working out of the Tappahannock office that will be relocated at the New Kent Forestry Center in the future. Ms. Duff was pleased with this decision and believes that the New Kent location will be good for the Departments visibility and that the field personnel shouldn’t experience many administrative differences.
Nursery Update
The VDOF nursery sales finished strong overall; hardwood seedlings doing a little better than loblolly. The Department is in better shape than it has been for the last 5-6 years and hopes to use some of their budget to replace some old equipment. Improved loblolly pine will be rated by families in the future, rather than tracking “generations.”
Tree Improvement
RT funding supports part of the Tree Improvement Program; white pine cone crop being harvested; working on longleaf and shortleaf orchards. Families of trees will be given performance ratings and will be priced accordingly.
John Carroll let the Board know that VDOF appreciates the support RT Board has given the Tree Improvement Program.
Past Chair - Appreciation
John Carroll presented Ann Duff with a certificate for her work as Chairwoman on the RT Board from September 2004 – March 2008. Jim Kuykendall also presented Ann with a framed picture of an eagle he had taken at the Ni River Reservoir in Spotsylvania County.
Review Items
Todd followed up and briefed the Board on the final approval of the Department of Taxation Form 1034 that will be used for the September – December tax quarter per Cathy Early at the Tax Department.
Dean gave additional information to the Board about the option of raising the RT acreage maximum from the current 100 acres. The Code allows up to 500 acres. Procedurally, in the history of the program, the maximum was reduced to 50 acres, returned back to 500 acres later and again reduced to the current 100 acres maximum. Over the last two fiscal years, 7-8% of all projects were 100 acres or larger. If the maximum acreage was raised to 150 acres, the funding would have captured most projects. Changes cannot be made during the fiscal year, only at the beginning, so Ken Morgan recommended tabling the discussion until the March Board meeting, prior to the beginning of the next fiscal year.
FY 07-08 Final Program Accomplishments
Todd reviewed the 2008 fiscal year budget and accomplishments spreadsheets and explained some of the budgeting challenges of the Program. The RT Program had a very productive year; however, there was some unspent funding that will be carried over to the current fiscal year. In FY 2008 a total of $2,322,991 was allocated to the Regions and $411,000 was returned. Todd and Dean are continuing to work with the Regional leadership to do a better job utilizing all of their allocations. Region 2, Tappahannock, and Region 5, Salem, had obligated and spent 95% of their allocations. There were a total of 1,506 projects completed in the 2008 FY on 57,322 acres.
Payment of Tax
Ken Morgan brought up his continued perception that the Forest Products Tax is not fully understood by loggers who are transporting logs across the state line and or out of state primary wood processors. Ken encourages the Department to remind the loggers about hauling across state line and who pays the tax. For counties bordering the state line, the VDOF should ask them if they are you selling to another mill across state line, and if so, explain the forest products tax to them. He perceives that some people are considering it a “voluntary” tax. Earl Pickett wondered if tax is being lost in western part of state also.
Several ideas of educational opportunities were brought up. One suggestion was to add a check off question to VDOF Harvest Inspection forms that are being completed for every tract regarding the logger’s understanding of the forest product tax. Dean said that he would check with Matt Poirot, Assistant Director for Water Quality, about the idea. Ann Duff also volunteered to do a presentation to SFI Committee and also during a SAF meeting. Ann agreed that the Board and the Department need to do more to communicate the forest products tax message.
The Department has worked with the Tax Department by providing them Charlie Becker’s sawmill list and we can give them the loggers list as well. The Department has also offered to give the Tax Department a list of questions if they are auditing a primary wood processor. A suggestion was to provide information to loggers during the SHARP Logger class also.
Even with this concern about who is actually paying the tax, the Tax Department has collected $50,000 more this year than last year. So we are assuming that the Forest Products Tax information cards that the Department produced and gave out last year have made a difference. Another relatively new primary wood processor to work with in the future is the “in-woods” whole tree chipper operators. There is a perception that they are not paying tax. The Department will begin concentrating on educating chipper operator in the future.
Dean Cumbia mentioned that the RT funds currently pay the Tax Dept. almost $24,000 per year for tax collection administrative costs; perhaps the Department could try again to fund a forest products tax collection “enforcement agent” with Tax Department using RT funds. Ken Morgan suggested that we need to gather and estimate of taxes not being collected and discuss whether this is something the Board wants to recommend at the March Board meeting. Todd said that the Tax Department has shown a willingness to work with us in pursuing a primary processor who is not paying the tax.
FY 08-09 Budget and Regional Allocations
Todd explained the budget spreadsheet and stated that the projected tax revenue for FY 2009 will be $1,498,686, plus the General Fund match of $1,145,140, plus the $785,747 FY 2008 carryover, so the FY 2009 budget will total $3,429, 753. After operating and tree improvement expenses are deducted, there will be a total of $2,490,271 available for landowner cost share incentives. As of September 9, the Department has obligated $1,131,750 since the beginning of the fiscal year beginning July 1.
Todd handed out a brief that showed the RT Program Incentive History and RT Incentive Funding to Landowners History. Greg Scheerer asked how the RT rates were developed. Todd explained that rates are determined by the Department with the input of the Board and they come before the Board for recommendation to the State Forester at the March meeting each year. The RT rates were based upon the percentage of the practice costs until 2004, when they were changed to specific flat rates per practice.
Wood for Energy
The Board discussed the increasing demand of wood for energy. The Dominion Pittsylvania Power Plant is a prime example of the shift toward wood for energy. Jim Kuykendall spoke with Dean Cumbia earlier about pine planted for pulpwood. There has been a trend to plant fewer trees per acre which is better for growing sawtimber; however, this practice will produce less overall pulpwood. This may have a great impact on the demand for wood fuel and pulpwood for making paper in another ten years or so.
Jim Kuykendall also mentioned that the Town of Warrenton is looking into bio-fuel plant for producing electricity. Additional discussion about this topic was tabled until the next meeting. At the present time, Virginia forest land is still producing more wood fiber than we are harvesting, which includes National Forests.
Mr. Cosner commented that it is difficult to buy land as the price of land keeps going up, and many landowners couldn’t afford to grow pulpwood. If the Land Use Program is ever knocked down, practicing forestry would be less attractive or economical to landowners.
Mark Martin suggested that the Reforestation of Timberland Board develop a resolution to pass through to the “powers that be” stating that funding the RT general assembly match should be a priority. The RT Programs is a good instrument for forest sustainability.
Ken Morgan mentioned that the 2nd week in October is declared National Forest Products Week This is a good opportunity to have brief statement about reforestation and the help of the Department.
Planting Contracts – H2B immigrant labor
Planting contractors had a very difficult time getting immigrant labor to plant all of the acres in the 2008 planting season. VDOF also had difficulty getting immigrant workers for the state seedling nurseries last year. One contracting company requested that the VDOF provide a letter that stated that there would be a potential need for immigrant labor services by the State of Virginia. Greg Scheerer also mentioned that Mead Westvaco was asked for the same type of letter.
Decision Items
RT Service Charge
Dean Cumbia informed the Board that the RT service charge had always been a modest amount over the years. The last time it was raised was in 1985 to $2.00 per acre. This cost was initially passed on to the landowner as a cost of doing business. Later, as RT funding has increased, the Department decided to allow the RT budget to pay the service charge. The cost of business has gone up substantially over the last twenty plus years, and Dean suggested that the service charge needed to increase in order to keep up with the true costs. Doubling the service charge would match the consumer price index increase, and provide nearly $100,000 more for the Program.
Since there is funding available, Dean suggested that the service charge increase be covered by the RT funding for the remainder of this year, and then pass the increase ($2.00/acre) on to the landowner at the beginning of the fiscal year. Ken Morgan made the motion to recommend to the State Forester to increase the service charge from $2.00/acre to $4/acre, and let the fund absorb the cost rather than landowner this year, but pass it on to the landowner next year. Mark seconded the motion. The Board agreed. Ron also stated that if the Board concurs, this change could be made effective immediately. Everyone agreed that the timing of this recommendation follow Ron Jenkins’s suggestion.
Shortleaf and Longleaf restoration plans:
Dean talked about the Department’s efforts in restoring diminished species in Virginia and development of comprehensive plans for both longleaf and shortleaf pine restoration. Two committees were organized to develop the plans and they wrapped up assignment this past spring.
Jim Jarvis, Campbell County Forester, and Chair of Short Leaf Pine Committee (Pinus echinata) gave a brief presentation on the committee’s discussions, their comprehensive plan, as well as some of his personal accounts of successful shortleaf pine planting projects
Strategies to Maintain/Re-Establish Shortleaf Pine:
|
|
|
|
|
|
|
|
|
|
Jim thanked the RT Board for promoting increased incentives to plant shortleaf. The Environmental Quality Incentives Program (EQIP) is generous toward shortleaf pine management.
Ken Morgan applauded Jim and VDOF for planting shortleaf. What can we do to have an advantage to produce a specialty product?
Cliff Somerville, Vice Chair, adjourned the meeting at 12:30 pm., and the Board members enjoyed lunch at a local restaurant.
After lunch, the RT Board was given a tour by Mr. Roy Byrd, Fuel Procurement Manager, of the Dominion Virginia Power’s Pittsylvania Power Station in Hurt, VA, one of the largest biomass power stations on the East Coast. This facility is an 80-megawatt facility and was purchased by Dominion in 2004. Pittsylvania’s sole source for producing electricity is from burning wood chips. More than 90 percent of its supply is waste wood that would otherwise be dumped into landfills or inefficiently burned. The station supplies enough electricity to power about 20,000 homes. The tour ended around 3:30.
The next Reforestation of Timberlands Board meeting is scheduled for March 26, 2009 with location to be announced later.
Reviewed and Edited by: Dean Cumbia, Todd Groh, John Carroll
Last modified: Monday, 19-Oct-2009 14:58:56 EDT
[an error occurred while processing this directive]