Form revised March 16, 2004

FISCAL NOTE FOR NON-CAPITAL PROJECTS

Department:	Contact Person/Phone:	DOF Analyst/Phone:
Seattle Public Utilities	Amy LaBarge, 733-9773	Cameron Keyes, 684-8048

Legislation Title:

AN ORDINANCE relating to the Cedar River Watershed; authorizing the cutting and removal of certain trees for non-commercial purposes and reasons consistent with the Cedar River Watershed Habitat Conservation Plan (HCP) and Ordinances 121040 and 121212 in Township 22 North, Ranges 7 and 8 East, and Township 23 North Range 7 East, W.M.; declaring the logs resulting from such action to be surplus to the City’s needs; authorizing the sale of such logs pursuant to applicable City contracting or surplus property sale procedures; directing deposit of the proceeds therefrom to the Water Fund for the purposes of HCP implementation; and increasing an appropriation to Seattle Public Utilities in the 2004 Budget.

· Summary of the Legislation:

This ordinance authorizes the salvage of timber that was blown down along roads by the severe windstorm of December 3, 2003, and the salvage of danger trees on the Bonneville Power Administration (BPA) transmission line right-of-way and from the clearing of a gravel pit for normal road improvement work. The logs are surplus logs produced by non-commercial salvage and removal operations, as allowed under the Cedar River Watershed Habitat Conservation Plan (HCP). The ordinance will result in the sale of up to 1,000,000 board feet of merchantable logs. This ordinance authorizes the sale of these logs and directs the deposit of the proceeds therefrom to the Water Fund. Total revenue from the sale of logs is expected to be about $291,000 in 2004. The ordinance increases appropriation authority in 2004 by $118,000 to cover the costs of the sale of logs ($30,000), necessary follow-up monitoring to be able to detect conditions that could cause an increased risk to watershed forests and water quality ($40,000), and the costs of forest certification ($48,000). Any expenditures needed after 2004 will be covered in the 2005-06 and later budget development and implementation processes.

· Background: (Include brief description of the purpose and context of legislation and include record of previous legislation and funding history, if applicable):

The ordinance authorizes sale of surplus logs from windstorm salvage along watershed roads, clearing of danger trees from the BPA transmission line right-of- way, and clearing from expansion of a rock pit in the Cedar River Watershed. Ordinance 121040 authorized the cutting of trees for such non-commercial purposes in the Cedar River Watershed, provided authority for the sale of logs resulting from such non-commercial cutting and dedicated the proceeds from such sales for the purpose of offsetting the costs of the HCP. Ordinance 121040 authorizes Seattle Public Utilities to sell up to 250,000 board feet of logs in any year without additional ordinance authority.

The windstorm of December 3, 2003, affected an overall area totaling roughly 6,000 acres between Cedar Falls and the Landsburg Diversion Dam. Blowdown occurred throughout the forest and along many watershed roads. Many major access roads, but not all blocked roads, have been cleared and those logs cut to merchantable lengths and piled. An evaluation of risks to water supply, in which various experts were consulted, indicated that the blowdown was a normal disturbance event that should have positive benefits on forest habitat. The primary risk is that Douglas fir beetles could cause further mortality of live trees after the beetles colonize the dead trees. Seattle Public Utilities (SPU) concluded that this risk was small and that there was not need to salvage logs in the forest interior or take other actions, as long as follow-up monitoring is conducted.

The windstorm resulted in trees along the BPA right-of-way falling on the transmission lines, and a joint assessment by BPA and SPU resulted in an agreement to remove other selected danger trees that might also fall on the transmission lines. The clearing of trees along watershed roads is needed to maintain access, and the clearing of trees for the road rock pits is a routine activity needed to provide materials for road improvement to meet state regulations and commitments in the HCP. An ordinance is needed because the estimated 1,000,000 board feet of logs to be sold exceeds the 250,000 board-foot annual limit specified in Ordinance 121040.

· Please check one of the following:

____ This legislation does not have any financial implications. (Stop here and delete the remainder of this document prior to saving and printing.)

__X_ This legislation has financial implications. (Please complete all relevant sections that follow.)

Appropriations: This table should reflect appropriations that are a direct result of this legislation. In the event that the project/ programs associated with this ordinance have appropriations that were, or will be, received because of previous or future legislation or budget actions, please provide details in the Notes section below.

Fund Name and Number	Department	Budget Control Level*	2004 Appropriation	2005 Anticipated Appropriation
Water Fund (43000)	SPU	Other Operating (N400B)	$118,000	See notes below
TOTAL			$118,000

*See budget book to obtain the appropriate Budget Control Level for your department.

Notes:

Appropriation authority of $118,000 requested for 2004 is to cover the costs of the sale of logs ($30,000), necessary follow-up monitoring to be able to detect conditions that could cause an increased risk to watershed forests and water quality ($40,000), and the costs of forest certification ($48,000). Any appropriation needed for follow-up monitoring beyond 2004 will be included in SPU’s 2005-06 budget submittal and later budget processes, as needed.

Anticipated Revenue/Reimbursement: Resulting From This Legislation: This table should reflect revenues/reimbursements that are a direct result of this legislation. In the event that the issues/projects associated with this ordinance/resolution have revenues or reimbursements that were, or will be, received because of previous or future legislation or budget actions, please provide details in the Notes section below the table.

Fund Name and Number	Department	Revenue Source	2004 Revenue	2005 Revenue
Water Fund (43000)	SPU	Sale of surplus logs	$291,000	$0
TOTAL			$291,000	$0

Notes: The amount of proceeds from selling the surplus logs will depend on market conditions, which can be volatile, and on the specific bids received. Also, estimates of the volume of merchantable trees yet to be cleared along currently blocked roads are approximate.

Total Regular Positions Created Or Abrogated Through This Legislation, Including FTE Impact: This table should only reflect the actual number of positions created by this legislation In the event that positions have been, or will be, created as a result of previous or future legislation or budget actions, please provide details in the Notes section below the table. None

Position Title and Department*		Fund Name	Fund Number	Part-Time/ Full Time	2004 Positions	2004 FTE	2005 Positions**	2005 FTE**
	TOTAL

* List each position separately

** 2005 positions and FTE are total 2005 position changes resulting from this legislation, not incremental changes. Therefore, under 2005, please be sure to include any continuing positions from 2004

Notes:

· Do positions sunset in the future? (If yes, identify sunset date): N/A.

Spending/Cash Flow: This table should be completed only in those cases where part or all of the funds authorized by this legislation will be spent in a different year than when they were appropriated (e.g., as in the case of certain grants and capital projects). Details surrounding spending that will occur in future years should be provided in the Notes section below the table. N/A.

Fund Name and Number	Department	Budget Control Level*	2004 Expenditures	2005 Anticipated Expenditures
TOTAL

* See budget book to obtain the appropriate Budget Control Level for your department.

Notes:

· What is the financial cost of not implementing the legislation? (Estimate the costs to the City of not implementing the legislation, including estimated costs to maintain or expand an existing facility or the cost avoidance due to replacement of an existing facility, potential conflicts with regulatory requirements, or other potential costs if the legislation is not implemented.)

Failure to recognize revenues from the sale of surplus logs and to be able to conduct forest monitoring to evaluate risks of forest damage and the need to take action to control those risks.

· What are the possible alternatives to the legislation that could achieve the same or similar objectives? (Include any potential alternatives to the proposed legislation, such as reducing fee-supported activities, identifying outside funding sources for fee-supported activities, etc.)

None.

· Is the legislation subject to public hearing requirements: (If yes, what public hearings have been held to date, and/or what plans are in place to hold a public hearing(s) in the future.)

Yes. A public hearing can be combined with the meeting of the Utilities and Technology Committee or otherwise as the Council desires.

· Other Issues (including long-term implications of the legislation):

To the extent that actual revenues exceed the costs described in this note, proceeds will be used to reduce borrowing for implementation of the HCP. Should actual revenues not exceed the costs described herein, Seattle Public Utilities will explore all opportunities to reduce expenditures to balance with revenues.

Please list attachments to the fiscal note below: None.