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Oregon School Boards Threaten Lawsuit Over Elliott State Forest Revenue

<p>Coast Range fog settles on the Elliott State Forest near Coos Bay.</p>

Jes Burns, OPB/EarthFix


Coast Range fog settles on the Elliott State Forest near Coos Bay.

The Oregon School Boards Association is threatening to sue the State Land Board over plans for the Elliott State Forest. That message came through clearly in a : Democrats Gov. Kate Brown and State Treasurer Tobias Read and Republican Secretary of State Dennis Richardson.

The Elliott State Forest is required by law to generate money for public schools, but it’s been losing money for years.

The debate over what to do with the Elliott State Forest comes as legislators try to close a $1.6 billion funding gap for the next two-year budget. Revenue from timber sales on the Elliott State Forest goes to the Common School Fund, which can relieve pressure on the state's General Fund to pay for schools. 

The State Land Board tried to sell the forest at an appraised value of $220 million dollars. But last year's sale process drew just one bidder — a partnership led by Lone Rock Timber and the Cow Creek Band of the Umpqua Indians. With just one bidder and environmental groups protesting the sale, Brown reconsidered and offered an alternative plan involving a $100 million state-backed bond.

That plan is on rocky footing with school leaders, like Jim Green with the OSBA, who want to make sure that schools' bottom lines are protected.

"If they've got another plan, that's fine for us, too. It's just that asset has to be replaced within the Common School Fund," said Green.  

The OSBA letter, drafted by attorneys John DiLorenzo and Gregory Chaimov of Davis Wright Tremaine LLP,  emphasizes the legal requirements of the Elliott, by repeatedly quoting from the Oregon Attorney General's guidance.

"The State Land Board's duty is to maximize the financial return from lands for the benefit of the Common School Fund," the letter quotes from attorney general guidance.

Ultimately, the letter informs the State Land Board that schools may sue if plans fall short of the fiscal responsibility to fund education.

"If the Board does not fulfill its fiduciary duties, beneficiaries of the Common School Fund, the state's school districts, plan to commence litigation to enforce those duties," said the attorneys' letter.

Green with OSBA said his organization has lined up school districts that would be willing to act as plaintiffs in a lawsuit, though he declined to name them. But Green said school leaders would prefer that members of the land board either follow through with the planned sale or find another way to meet the same financial outcome.

“If they would go forward with the sale, or they can show $220 million coming in, we don’t need to bring a lawsuit,” Green said.

Richardson said he's looking forward to discussing the Elliott State Forest's future at the next land board meeting May 9. He takes the OSBA letter as a warning.

“It is a reminder that this should not be decided based on politics, but on the requirements as trustees, for the benefit of public education,” Richardson told OPB.

The governor’s office said a new plan may be shared later this week, but didn't offer any details. Monday evening, the governor's press secretary Bryan Hockaday said Gov. Brown has "made clear the critical importance of fulfilling the State’s fiduciary obligations to the Common School Fund." Hockaday continued, "Governor Brown will present a plan at the upcoming Land Board meeting that honors the Common School Fund, protects the Elliott’s diverse habitats, and ensures the sustainable harvest of timber."

Editor's note: Story updated to include a statement from Bryan Hockaday, press secretary for Oregon Gov. Kate Brown.

Copyright 2017 Oregon Public Broadcasting

Rob Manning is a news editor at Oregon Public Broadcasting, with oversight of reporters covering education, healthcare and business. Rob became an editor in 2019, following about 15 years covering schools and universities in Oregon and southwest Washington as OPB’s education reporter.