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Freshwater, Elk logging put on hold
Water Board stops logging in Freshwater and Elk.
By John Driscoll - The Times-Standard
Wednesday, April 06, 2005 - A state water official put a hold on Pacific Lumber Co. logging in Freshwater Creek and Elk River after finding that residents there are likely to be harmed otherwise.
State Water Resources Control Board hearing officer Richard Katz wrote in Wednesday’s order that serious legal questions need to be answered about a March order drafted by its regional arm that cleared 75 percent of the logging Palco had requested for the year.
The Humboldt Watershed Council challenged the regional board’s decision, which led to a hearing Tuesday.
“The evidence clearly indicates that Palco is largely responsible for the circumstances in which it now finds itself,” Katz wrote.
He also said actual harm to residents plagued by flooding resulting from logging operations is likely, since it has occurred in the past. In contrast, he wrote, the company can absorb the delay.
But a Palco official called the decision “disappointing,” and said the company plans to appeal.
Palco reported that it stopped logging in the area, taking more than 100 workers, most contracted with Steve Will’s Trucking, off the job.
Adoption of the new permit system — called watershedwide waste discharge requirements — will likely allow some or all of the trees to be harvested in the future, Katz wrote. The North Coast Regional Water Quality Control Board is currently working on the guidelines, which it claims Palco held up by not releasing information in a timely fashion before its permits expired on Dec. 31.
The regional board staff allowed 50 percent of Palco’s logging to proceed in a February decision, but the board itself later directed staff to release another 25 percent.
Katz wrote that state water law prohibits a regional board from telling its executive officer to issue permits.
“We’re pleased that the state board recognized the importance of the situation,” said Mark Lovelace of the Humboldt Watershed Council.
Palco government relations director Chuck Center said the stay confuses negotiations with the company’s creditors, and makes the company unable to replenish log decks depleted due to delays last year.
“It’s disappointing to say the least, for us,” Center said.
Palco said it would request an immediate appeal before the full state board.
The stay comes as Palco subsidiary Scotia Pacific has taken steps toward restructuring its $750 million in timber bonds.
“Bondholders led by distressed specialist Beal Bank are circling the wagons in anticipation of a workout,” wrote distressed-investment news service DebtWire’s Matt Wirz.
Scotia Pacific will default on the bonds unless it comes up with $12 million to pay $28 million of interest payments due July 20. Principal payment on the three series of bonds would change in the event of a default and acceleration of the notes, Wirz wrote.
Wirz also quotes an unidentified source close to the situation as saying that Maxxam has $100 million in unrestricted cash it could use to fund the July payment, as opposed to risking bankruptcy.
Maxxam representatives directed the Times-Standard’s phone calls to Palco.
A hearing on the merits of the watershed council’s petition will be heard in about 30 days, the state board said.
Read the state board’s order at the Times-Standard online at: http://extras.times-standard.com/news/control_board.pdf
Wednesday, April 06, 2005 - A state water official put a hold on Pacific Lumber Co. logging in Freshwater Creek and Elk River after finding that residents there are likely to be harmed otherwise.
State Water Resources Control Board hearing officer Richard Katz wrote in Wednesday’s order that serious legal questions need to be answered about a March order drafted by its regional arm that cleared 75 percent of the logging Palco had requested for the year.
The Humboldt Watershed Council challenged the regional board’s decision, which led to a hearing Tuesday.
“The evidence clearly indicates that Palco is largely responsible for the circumstances in which it now finds itself,” Katz wrote.
He also said actual harm to residents plagued by flooding resulting from logging operations is likely, since it has occurred in the past. In contrast, he wrote, the company can absorb the delay.
But a Palco official called the decision “disappointing,” and said the company plans to appeal.
Palco reported that it stopped logging in the area, taking more than 100 workers, most contracted with Steve Will’s Trucking, off the job.
Adoption of the new permit system — called watershedwide waste discharge requirements — will likely allow some or all of the trees to be harvested in the future, Katz wrote. The North Coast Regional Water Quality Control Board is currently working on the guidelines, which it claims Palco held up by not releasing information in a timely fashion before its permits expired on Dec. 31.
The regional board staff allowed 50 percent of Palco’s logging to proceed in a February decision, but the board itself later directed staff to release another 25 percent.
Katz wrote that state water law prohibits a regional board from telling its executive officer to issue permits.
“We’re pleased that the state board recognized the importance of the situation,” said Mark Lovelace of the Humboldt Watershed Council.
Palco government relations director Chuck Center said the stay confuses negotiations with the company’s creditors, and makes the company unable to replenish log decks depleted due to delays last year.
“It’s disappointing to say the least, for us,” Center said.
Palco said it would request an immediate appeal before the full state board.
The stay comes as Palco subsidiary Scotia Pacific has taken steps toward restructuring its $750 million in timber bonds.
“Bondholders led by distressed specialist Beal Bank are circling the wagons in anticipation of a workout,” wrote distressed-investment news service DebtWire’s Matt Wirz.
Scotia Pacific will default on the bonds unless it comes up with $12 million to pay $28 million of interest payments due July 20. Principal payment on the three series of bonds would change in the event of a default and acceleration of the notes, Wirz wrote.
Wirz also quotes an unidentified source close to the situation as saying that Maxxam has $100 million in unrestricted cash it could use to fund the July payment, as opposed to risking bankruptcy.
Maxxam representatives directed the Times-Standard’s phone calls to Palco.
A hearing on the merits of the watershed council’s petition will be heard in about 30 days, the state board said.
Read the state board’s order at the Times-Standard online at: http://extras.times-standard.com/news/control_board.pdf
For more information:
http://www.times-standard.com/Stories/0,14...
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Pacific Lumber to appeal temporary ban in two Humboldt County watersheds
Thursday, April 7, 2005
By MIKE GENIELLA
THE PRESS DEMOCRAT
SACRAMENTO - In a major setback for Pacific Lumber Co., a state water official Wednesday temporarily banned additional logging in two Humboldt County watersheds.
Pacific Lumber quickly responded by filing an immediate appeal and requesting that it be heard by all five members of the state Water Resources Control Board within 30 days.
"In the meantime, we are evaluating our options and doing everything we can to overcome this setback," said company President Robert Manne.
It could be up to four months before Pacific Lumber's appeal is heard, said Liz Kanter, a state water board spokeswoman.
The logging ban was ordered by Richard Katz, a former state legislator and current state water board member. Katz presided over a contentious five-hour hearing Tuesday on the high-profile case.
On Wednesday, Katz put a hold on logging that Pacific Lumber had planned over the next 90 days in the Elk River and Freshwater Creek watersheds of southern Humboldt County. The disputed timber cutting could have generated about $12 million for the cash-starved company, averting layoffs at its sawmills in Scotia and Fortuna.
Katz's decision, for now, nullifies a 5-3 vote taken March 17 by the North Coast Regional Water Quality Control Board.
The Santa Rosa-based board had voted to allow an additional 25 percent of timber to be logged.
Katz said he had no choice but to issue the logging ban because the targeted trees would be cut before the full state water board had a chance to decide the merits of the controversy.
"The action will be irreversible and any harm that may result will be unavoidable," Katz said.
His action Wednesday rolls back logging to 50 percent of the volume Pacific Lumber originally sought in the two watersheds.
"The financial effects of the delay are relatively small compared to the scope of (Pacific Lumber's) operations, and the record makes it clear that Pacific Lumber's actions are the underlying cause of any financial problems it faces," Katz's decision said.
Steve Will, owner of a Eureka trucking company that employs about 140 people, sharply disagreed.
Will testified at Tuesday's hearing that his company would have earned about $1.2million from Pacific Lumber by hauling the cut timber to company mills over the next three months.
Will said Wednesday he was stunned by Katz's decision.
"It seems as though Mr. Katz chose to ignore all that. I think he owes the hard-working families of Humboldt County an explanation," he said.
Katz's decision was hailed, however, by neighboring landowners and environmental groups, who have fought the company's most recent logging plans for the two watersheds.
Rural residents have argued that sediment from heavy timber cutting over the past decade has filled stream beds, created local flooding problems and tainted water supplies. More logging will only make the situation worse, according to their complaints.
"We're very pleased with the decision. And we believe it doesn't create the 'doom-and-gloom' scenario that the company suggests," said Paul Mason, a Sierra Club spokesman.
While potentially a political embarrassment for the Santa Rosa agency, Katz's decision was hailed Wednesday by its chairwoman, Bev Wasson.
Wasson, a Healdsburg grape grower and the longest-serving regional water board member, had opposed the March 17 motion to allow more timber cutting.
"I think the state board did the right thing," Wasson said.
But Pacific Lumber's Manne called Katz's decision "arbitrary," noting that it "overruns the considered decision of the regional water board, which has been working on this issue for months."
As a result, Manne said the logging halt creates "even more uncertainty for our company and employees, and our future."
##
Sacramento Bee
State water board orders Pacific Lumber to temporarily halt logging
The Associated Press
Thursday, April 7, 2005
SCOTIA, Calif. (AP) - State water officials ordered Pacific Lumber Co. to temporarily halt logging in Humboldt County on Wednesday after environmentalists filed a petition questioning the validity of the company's timber harvest plans.
The State Water Resources Control Board issued the stay requested by the Humboldt Watershed Council and the Environmental Protection Information Center to suspend logging in parts of the Freshwater Creek and Elk River watersheds near Eureka on California's far northern coast.
In February, the North Coast Regional Water Quality Control Board agreed to allow Pacific Lumber to cut up to 50 percent of the annual 1,100-acre harvest limit in the environmentally fragile watersheds, where residents complain that logging operations have caused flooding and property damage.
After Pacific Lumber officials protested, the regional water board voted 5-3 last month to allow the Scotia-based firm to log 25 percent - or about 400 acres - more than the board's executive director, Catherine Kuhlman, gave the company permission to harvest.
The state water board's decision Wednesday will prevent Pacific Lumber from logging the additional 25 percent until the board can hold a hearing on the environmental groups' petition. No hearing date has been set.
Pacific Lumber officials said the stay would create more financial uncertainty for the struggling timber firm, which has threatened to file bankruptcy if it can't down enough trees. The company said it would immediately appeal Wednesday's decision.