General Manager's Report
Review of the 1998 -99
Operating Year
| This past year marked the sixth year of operation for the Revelstoke Community Forest Corporation. Throughout most of the year we faced a declining market for forest products which reduced our log prices substantially and caused us to modify our harvesting plans a number of times. Fortunately, our good inventory of ready to log timber proved very beneficial, allowing us to switch to higher valued stands with lower logging costs and in the end we were rewarded with a profit of $347,106 before paying a dividend to the City of Revelstoke. | | In actual numbers, our average sales prices from the RCFC sortyard declined from $115.26/cubic meter in 1997-98 to $98.87/cubic meter in 1998-99, a drop of $16.39/cubic meter. In order to counteract the price reductions the cost of logs also had to be reduced and we managed to lower it from $102.70/cubic meter to $93.22/cubic meter, a reduction of $9.48/cubic meter, enough to maintain profitability. This past year's positive results have increased accumulated retained earnings for the Corporation to $2,623,235 after dividends to the City of Revelstoke totaling $457,766. As noted in our Chairman's comments, RCFC is now in a position to substantially repay the City's $1,000,000 initial investment in the company so they can invest the money in other community ventures.
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| FOREST MANAGEMENT PLANNING |
| The Minister's Advisory Committee's (MAC) ongoing effort to arrive at an acceptable land use plan for the Revelstoke area continued to occupy the planning spotlight. Much time and effort was spent trying to resolve discrepancies in timber supply modeling approaches and then in searching for the best ways to maximize environmental protection while minimizing the impact on timber harvesting. Tree Farm License (TFL) 56 was the focus of much of the study and discussion and we learned a great deal about our community forest land base and its importance as caribou habitat, winter ungulate range and biodiversity corridors. After four years of work, a plan has been developed which attempts to balance the many competing interests in the area. TFL 56 will see a substantial amount of forest retained in an old growth state in important habitat areas at lower elevations, while less environmentally important upslope areas will receive more concentrated harvesting and development. As such, we will be restricted in the areas where we can log and we will experience an increase in logging costs as we attempt to access the more expensive upslope timber with specialized logging systems such as helicopters and longline yarders. We hope that the Minister of Forests appreciated the time and efforts that the community has expended in arriving at this plan and that he gives it his approval so that we can begin to implement it. Last winter we commenced preparation of Management Plan #3 for TFL 56. This plan tells in detail how RCFC plans to manage and integrate timber harvesting with the variety of resources and land uses that occur on the TFL land base. Part of the process involves analyzing the timber supply and recommending an appropriate harvest level to the Chief Forester. Preparation of the plan is a thirty month process with opportunities for public input at a number of points. These opportunities will be advertised in the local newspapers, but we invite citizens to come in and discuss the plan at any time if they have questions or concerns.
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| TIMBER HARVESTING AND DEVELOPMENT |
Throughout the past year we have continued to develop and expand our inventory "ready to log" areas. To be able to respond effectively to changes in market, we require areas with different species and quality of wood. To respond to changes in costs and prices we need areas with a range of harvesting systems (eg. cat, cable, longline, helicopter) available over a range of seasons. At this time we have approx two years of timber that can be approved in short order. We will be increasing that amount to two and a half to three years to provide maximum flexibility. During the past year our mix of logging systems was as follows: | 
Photo: Schiller Contracting's 071 Madill Yarder and John Deere loader working on CP 272 Group Selection cut near Brewster Ck.
| | LOGGING SYSTEMS | | TYPE | 1998-99 | 1993-1999 | | Ground Skidding | 33.3% | 24.2% | | Cable Logging | 34.3% | 55.4% | | Helicopter | 13.8% | 7.4% | | Right of Way | 18.6% | 13.2% |
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Last year was RCFC's first year in its present five-year cut control period and the company harvested 85,786 cubic meters of timber from TFL 56. In addition, 20 kms of road and two bridges were constructed. Logging and hauling operations are conducted with local contractors to the greatest extent possible, and road construction projects are tendered out to Revelstoke based contractors only. Over $4,200,000 of goods and services were purchased from Revelstoke business's during 1998-99.
| | LOGGING CONTRACTORS | COMPANY NAME | VOLUME LOGGED (m³) | | Encampment Creek Logging | 25,298 | | Schiller Contracting | 24,695 | | S. McKenzie Contracting / V.I. Helicopters | 11,262 | | Joe Kozek Sawmills | 10,685 | | Spur Logging | 4,899 | | Marinex Equipment | 3,054 | | Dave Cass | 3,012 | | Coueffin Construction | 2,510 | | Longline Industries | 371 | TOTAL: | 85,786 m³ |
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| SAWLOGS / PULPLOG BREAKDOWN |
(Cubic Meters) - 1998-99 
| (Cubic Meters) - 1993-99 
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31,370 cubic meter of logs were sold through the RCFC log sort yard at an average price of $98.71/cubic meter. Pulpwood was sold to Celgar Pulp (17,942 cubic meters) and Cache Creek Woodchips (11,847 cubic meters). Our log scale and sort yard on Highway 23 North continues to be an excellent facility. Evans Forest Products and other local operators have begun to make use of it also, which helps to defray some of our expenses. Logs from the sort yard have been well accepted in the market place and we maintain an extensive list of bidders from throughout the southern interior who bid on the over twenty sorts of logs that we produce. A detailed listing of the volumes and prices received in the last two years is included in this report. Our thanks to scaling contractor Angelo Brunetti and Elgin Construction's loader operators Dave Fowlie and Geoff Mackey for doing an excellent job of operating the yard.
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| SPECIES DISTRIBUTION OF SAWLOGS (%) |
1998-99 
| 1993-99 
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Establishing a new forest once logging is completed and tending the new trees to maximize growth and wood quality, is a crucial part of RCFC's business. | SILVICULTURE ACTIVITIES 1998-99 | | TREATMENT | HECTARES | | Site prep - piling and burning | 13.1 | | Planting | 230.1 | | Brushing - manual | 657.8 | | Brushing - chemical | 13.8 | | Silviculture Surveys | 2,135.2 | | Spacing | 6.7 | | Pruning | 24.9 |
| | Mike Rooney of NewWoods Forestry Consulting has been involved in managing silviculture programs in the Columbia Valley for many years and RCFC has depended on Mike's experience and knowledge in silviculture project management since the company started. During the past six years we have eliminated the backlog of Not Sufficiently Restocked (NSR) areas on the TFL, tightened the reforestation delay to less than two years and implemented a rogram of spacing and pruning to improve growth and wood quality. As much as possible, local silviculture contractors and workers are used for completing this work and local hiring clauses are used in all silviculture contracts. Other silviculture initiatives include planting a component of rust resistant white pine, experimenting with various methods of enhancing early growth to lessen competition from other vegetation and training local loggers to do spacing and pruning during break-up. $893,000 was spent in 1998-99 on silviculture projects.
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1998-99 was the first year of our Multi-Year Agreement with FRBC. A total of $465,500 was spent on the following projects on TFL 56: | PROJECT | COST($) | | 1) Enhanced Silviculture | | - Pruning | 52,745 | | - Spacing | 8,828 | | 2) Backlog Silviculture | | - Surveys | 27,195 | | - Brushing | 79,569 | | 3) Watershed Rehabilitation | | - Keystone Road Rehab. | 220,451 | | - Downie Cr. Fish Habitat | 76,733 | TOTAL: | $465,521 |
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Photo: Marty Powers setting chokers on Encampment Creek Logging's Wyssen Skyline operation in the Goldstream River Valley.
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| The TFL 56 land base is home to many species of birds, animals and plants, some of which are rare and have very specific habitat needs. In addition, the steep slopes and multitude of creeks and streams on the TFL require special care and consideration to minimize landslides and prevent erosion and water siltation. These concerns are carefully considered in planning and carrying out forest management activities like logging, road building and silviculture treatments. RCFC is continuing to develop and implement innovative harvesting approaches designed to protect and enhance wildlife values. To date we have designed partial cutting solutions on over 350 hectares of sensitive deer, moose and caribou habitat where less than 30% of the mature cover is removed. This past winter 100% of our logging operations were conducted using partial cutting methods. RCFC is continuing to focus harvesting activities on previously inoperable forest types with low environmental concerns in order to take pressure off low elevation valley bottoms which are important wildlife habitat. In addition, we have increased the use of alternative logging systems like longline yarders and helicopters to reduce road access to important grizzly bear habitat. Utilizing FRBC funding, we have completed watershed rehabilitation projects in the Downie and Keystone Creek areas to identify and correct potential problems caused by old roads and trails, as well as to enhance fish habitat. Herbicide use in brushing and weeding has been minimized in favor of hiring local residents to conduct manual brushing and weeding of plantations. All of these activities are expensive and add to costs, but are necessary to ensure that non-timber resources found on the TFL are protected.
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Other projects and activities undertaken by the Corporation in 1998-99 include:
 | Sponsoring and participating in the Forest Communities Conference held in March 1999.
| | Overseeing the location, design and construction of the Mt. Mackenzie ski hill road.
| | Supporting or sponsoring many local clubs and community activities.
| | Supporting, in conjunction with four other forest companies, the Forest Education Liaison teacher for the Revelstoke, Salmon Arm and Vernon Forest Districts.
| | Supplying start up funding for the B.C. Interior Forest Museum Society.
| | Sponsoring and participating in the Revelstoke Forest Worker's Group.
| | Sponsoring and participating in the Columbia Mountain Institute. |
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Once again I would like to take the opportunity to thank the many contractors, consultants and suppliers for the excellent work and service that they have provided to RCFC during the past year. I would also like to thank the many customers who purchase logs from our sort yard for their business and their input in helping us to improve our operation. I must also thank our Board of Directors and our industry partners for their guidance, wisdom, and patience and most certainly my staff, who do an excellent job for our shareholders, the citizens of Revelstoke. Respectfully Submitted,
Robert Clarke, R.P.F.
General Manager
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