By the end of December, 642 acres of ponderosa pine forest near Schultz Creek and the base of Mount Elden were supposed to have been mechanically thinned as part of the Flagstaff Watershed Protection Project, or FWPP.
Area trails were closed and neighbors were notified as the logging contractor ramped up operations at the end of the summer.
But after cutting trees on just 20 acres, the contractor stopped work and never picked back up. The contract ended Dec. 31 with just 3 percent of the acreage completed.
It's an outcome that isn't unfamiliar in northern Arizona — over the past five years, two companies on the 2.4 million acre Four Forest Restoration Initiative have repeatedly failed to meet expectations on that project's largest tree thinning contract.
For its part, the smaller scale FWPP calls for a mix of logging, hand thinning, prescribed fire, helicopter logging and cable logging on about 15,000 acres of forest around Flagstaff’s two watersheds, Lake Mary and the Rio de Flag. The goal is to reduce the risk of severe wildfire and destructive post-fire flooding in those areas. The project is being completed in phases, with multiple contracts awarded for different types of logging on various parts of the forest.
Terry Hatmaker, who had the 642-acre Mount Elden-area contract, said he had planned to build a sawmill and bought the timber sale in order to supply material to the mill. He and his partner didn’t get the money to build that mill, though, and also found the process was going to be lengthier and costlier than they had anticipated, Hatmaker said.
“My partner and I were both from back East and we didn't realize just how long it would take and the expense of it,” he said. “We were naive."
Finding a location for a mill and the permitting requirements were among the major challenges, he said.
“The county, the state and the city seem to want the timber thinned but they don't want the mess," he said.
When Hatmaker did eventually find an already operating sawmill to take the logs from his FWPP contract, it wouldn’t take enough of them, he said.
The Forest Service terminated Hatmaker’s contract as incomplete on Dec. 31 but is required to reoffer the same contract with the same conditions, including a one-year completion timeline. The agency is evaluating the condition of the site and expects to advertise the contract within the next two months, said Jessica Richardson, the Forest Service’s FWPP coordinator. Hatmaker won’t be able to bid on that contract because he defaulted on the last one.
If there aren’t any acceptable bidders, the Forest Service would look at restructuring the contract to one where the logger would be compensated for removing low-value trees, said Mike Elson, Flagstaff district ranger.
The other option being discussed is for the city of Flagstaff to enter into an agreement with the Forest Service where it would hire a contractor and pay for the logging work to be done with a target completion date of the end of this year, said Paul Summerfelt, wildland fire management officer with the city of Flagstaff.
The city would use some of the $10 million in bond money that Flagstaff voters approved in 2012, Summerfelt said.
“The investment that the citizens made with the bond is an exceptionally wise investment and we are committed to getting the work done,” he said. “Our concern is the lack of progress and slowness that has occurred and I think we are certainly now at a point where we can't wait and hope. We've got to take action.”
The city took a similar approach and paid for the thinning work that took place on city and state land on Observatory Mesa starting in 2015. The idea was to see if money could be saved by first offering up the Mount Elden parcel as a timber sale where the contractor pays the Forest Service for the value of the timber, he said.
The Forest Service follows a standard process for evaluating bidders on a timber sale like the 642-acre Mount Elden-area sale. In the case of Hatmaker, who didn’t have previous experience as a Forest Service contractor, the agency required he prove he had or would be able to obtain appropriate logging equipment and performed a financial ability determination based on his personal and business financial information.
But that evaluation process is continuing to fall short, Coconino County Supervisor Art Babbott wrote in an email. The contract default is “an example of the Forest Service awarding contracts to entities that have not been sufficiently vetted to accurately assess their financial viability,” Babbott wrote.
The failure to evaluate basic business planning and capital capacity of potential contractors has had significant negative impacts on forest restoration efforts in the region, Babbott wrote.
The most notable example is the Four Forest Restoration Initiative, where two companies have fallen far short of expectations on the initiative’s biggest 300,0000-acre thinning contract. The first company never had or obtained the financing to complete such a massive task, and the second company, which took over the contract in 2013, has repeatedly stumbled and failed to ramp up logging and wood processing to anywhere close to the hoped-for pace and scale.
Both Babbott and Summerfelt said there is a need for the Forest Service to reevaluate its process for procuring, awarding and operating logging contracts in this region. The agency still views northern Arizona’s ponderosa pines as a high-value product when the small diameter logs that need to be removed actually have no value or negative value, Babbott wrote.
The fact that Hatmaker was the sole bidder on the 642-acre Mount Elden contract and offered the minimum amount, indicates the stand's low value, said Matt Millar, FWPP operations specialist with the city of Flagstaff.
James Perkins, another local logger, said the sale has less usable timber per acre than other projects he is working on near Munds Park. Plus it’s just not good wood, Perkins said. He would recommend the Forest Service redo the contract and make it a stewardship contract where the logger gets compensated for cutting and removing both the larger, more valuable and smaller, less valuable trees from the forest.
“The way to make things happen is to pay for it," Perkins said.