In a Dec. 7, 2012 public meeting of the board of ComFor Management Services Limited (CMSL), board members and staff reported on the current financial position and ongoing operations of the Burns Lake Community Forest (BLCF).
As has been reported before in the Lakes District News, CMSL has been undergoing structural changes that involved the sale of Sheraton Holdings to Tahtsa Timber Ltd., as well as staff and management changes. This was the first regularly scheduled public meeting since May, 2012. It was attended by the board of CMSL, staff, the Lakes District News, and two members of the public.
Quinten Beach, CMSL President, has reported previously that the board has been meeting regularly to discuss restructuring and other financial matters that are considered to be in camera or confidential. Ron Zayac, part of the interim management team, said that the minutes of those meetings will remain confidential, although the board will consider whether a summary of in camera resolutions, and possibly forestry and logging reports, will be made public at a later date.
The Sheraton mill continues at the same employment levels under the ownership of Tahtsa Timber. The mill is reported to be approaching new WorkSafe BC dust compliance standards. Klaus Posselt was at the meeting at the invitation of the CMSL board in the event that a member of the public might have wanted more details on the sale of Sheraton Holdings to Tahtsa Timber.
Some staff positions continue to be met on an interim basis until streamlining is complete. Melissa Steidle with DWB Forestry Consulting and Ron Zayac, Tech North Solutions Inc. continue to act as the interim management team for CMSL.
Burns Lake chartered general accountant, Bernice Grossman, presented statements of financial position for both the Burns Lake Community Forest and CMSL as of Oct. 31, 2012. The year end for both CMSL and BLCF had been changed last year to Oct. 31.
The financial snapshots released at the meeting do not represent year-end numbers. A number of transactions still need to be recorded. In particular, CMSL management fee transfers have not been, as of Oct. 31, 2012, included in the report.
“During the restructuring process we have halted some of the inter-company transfers that have historically provided CMSL with revenue so we can simplify the accounting procedures and budgeting process,” said Zayac in an email. “At the conclusion of the CMSL year end, the company will not show a loss.”
Year end accounting and tax entries will be completed under the advice of Edmison Mehr Chartered Accountants of Smithers, B.C. Edmison Mehr will also complete the 2012 audited financial statements for CMSL and BLCF, which will be made public early in 2013.
The CMSL board has continued to make donations to the community. In total, $77,963 in financial donations were made between Nov. 1, 2011 and Oct. 31, 2012. The BLCF also donated more than $8400 in ‘time’ donations to various local groups. These donations reflect time or work in kind donated by CMSL board or staff members for things like the use of a mini-excavator by Burns Lake Mountain Bike Club to build trails, or bookkeeping provided by CMSL to the Burns Lake Tragedy Fund. No fees were charged to the user groups.
In conversation later in the week, Zayac explained that the board had not been holding regular public meetings because the board was meeting to deal with corporate restructuring, the sale of significant assets and, most recently, negotiations with the province and Hampton Affiliates regarding timber supply in support of the Babine Forest Products mill rebuild.
Zayac also described the challenges that will be faced in the coming years regarding the community forest’s ability to fund local projects and user groups. Significant drop-downs in the annual allowable cut are expected as the chief forester makes downward adjustments to the previous harvest uplifts that had been put into place to deal with mountain pine beetle killed wood.
“Donations depend on profitability,” he said. “It would be premature to say anything regarding funding levels next year.”
Regarding ongoing restructuring, Zayac described a process that is meant to simplify the management structure of both BCLF and CMSL that will make the operations of both more readily transparent. He said that the board of CMSL had been dealing with a complicated business structure that involved multiple legal corporations and subsidiaries.
This structure was put in place through decisions made by the previous board, he explained.
“Business in the forest has changed significantly and we have to change our business structure in order to deal with those new realities,” Zayac said.
In other news, the community forest will begin to use a genetically modified seed stalk that could result in an increase to the annual allowable cut. The modified Pine seeds are class A. They are more expensive than previous seeds, but they will produce a better growth rate.
Zayac explained that when the chief forester does his review, this growth rate is taken into consideration and could mean that more timber would enter the harvestable timber supply.