County timber sales suffer

ARLINGTON — On a foggy hillside above the Stillaguamish River, loggers used heavy equipment to pull giant tree trunks hundreds of yards up a steep slope.

The chilly, muddy surroundings were far removed from the heated offices where government bean-counters tally property taxes. Yet the loggers were playing their own part in paying for county services.

Schools, hospitals and libraries all benefit from timber sales on state land. And like just about everything else in this faltering economy, those sales have sunk to near-record lows. The housing industry — which normally consumes the largest share of local timber — has almost completely lost its appetite.

“There’s a very large difference between what we would bid for that timber today and what we bid for it two years ago,” said Bob Waltz, the owner of the Seattle-Snohomish Mill Co. in Snohomish. “The wood they’re putting up for sale, people are putting up prices that reflect today’s lumber market. And it’s pretty grim.”

At local mills, a truckload of Douglas fir logs now might command about half what it did when demand was strongest a little over a year ago.

That’s pinched local governments, because of the way the state trusts divvy up the money. Snohomish County, one of the eventual recipients of the state timber money, expects to get about $425,000 less than what it projected this year. While not as severe as the hit from property tax declines, it’s still a significant blow to the $200 million general fund.

The state Department of Natural Resources manages about 2.1 million acres of state forests that generated more than $70 million in timber revenue last year. Snohomish County, with more than 64,000 acres of state trust land, is among the most productive areas in Washington, along with Skagit, Whatcom, Clallam and Lewis counties.

Though the land earns money now, it was once a liability. A frenzy of logging a century ago left large tracts barren and at risk for wildfire.

“Many were logged and abandoned because people didn’t want to pay taxes on land that wasn’t producing anything,” said Jane Chavey, a DNR spokeswoman in Olympia. “They’re some of the best timberlands in the state. They’re the ones the private enterprise had gobbled up first.”

Chavey described what happened next:

Companies neglected to pay taxes and hundreds of thousands of acres reverted to counties throughout the state.

In the 1920s, county officials asked state lawmakers for help, telling them they could not manage the lands. The Legislature decided to mange the land through permanent trusts that stipulated how much money from timber harvests should go toward local services. Counties started to turn the land over in the 1930s.

The state replanted trees and took on other responsibilities, such as fighting fires. Logging resumed in the 1960s and 1970s. DNR managers say they have tried not to sell more trees than the land can grow.

The state takes 25 percent of the timber money for management fees, then sends the rest back to pay for schools, hospitals and roads. Most of the money comes from harvested timber, with a small amounts from leases and applications for rights of way.

The money fluctuates yearly, depending on timber demand and whether parcels are ready.

Snohomish County got $13.7 million from DNR timber sales in 2004, $11.3 million in 2007 and $6.3 million in 2008, the county finance department reported. This year’s revised estimate is $4.9 million.

Last week, a crew from S &R Logging of Oso harvested timber from state-managed property on Stimson Hill, about 12 miles northeast of Arlington.

“This is a typical cable-yarding operation,” said Mark Arneson, a DNR compliance forester who supervises work at state sites.

The operation’s hub was the Skagit tower, a steel pole that extended about 60 feet in the air. Thick steel cables ran from the tower down the hillside. Workers in the brush below attached logs to a carriage that resembled a mini gondola cable lift.

An eight-cylinder diesel engine pulled the carriage back up the cables, along with its freight, logs weighing upwards of 2 tons. The engine’s exhaust mingled with the smells of wood smoke from a warming fire inside a 50-gallon drum, fresh wood shavings and damp forest.

Workers used loading machinery to lift logs onto a Kenworth truck for the trip to a local mill. Like all logs taken from state land, they were marked with a 2-inch red dot.

The crews were harvesting 76 acres of Douglas fir, alder and western red cedar that the state auctioned off in December 2007.

An inventory and appraisal helped DNR set the minimum bid at just under $1 million. Hampton Affiliates of Portland, Ore., one of four bidders, paid $1.5 million — more than 50 percent above the minimum — for the right to harvest the trees.

Such a premium is rare in today’s market. Some recent auctions attracted no bids at all.

In March, DNR received no offers on eight of the 14 timber sales it listed.

The declines mirror the economic pain for loggers and mill workers.

Seattle-Snohomish Mill has gone to one shift instead of three and is down to 100 workers from 160. Hampton Affiliates last month laid off 90 of its 220 employees at its Darrington sawmill.

At Granite Falls-based Miller Shingle Co., about 100 of 120 workers remain on the job, though many have only recently returned after being laid off for several months.

“We’re right at the root at the housing business,” said Ron Baker, Miller Shingle’s timber manager. “The housing market is dead and that’s what eats up most of our lumber.”

Baker expected an eventual rebound. Waltz, of the Seattle-Snohomish Mill, said the timber industry is notorious for being cyclical.

“It really gets tossed around by a lot of other forces,” he said. “This one was the financial collapse. Most of us who have been in it a long time, when we’re doing well, we kind of hold our breath because we know bad times are coming. Because it always happens.”

Noah Haglund: 425-339-3465, nhaglund@heraldnet.com.

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