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Schools lobby may sue if Elliott State Forest isn't sold

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Oregon School Boards Association threatens legal action if forest property isn't generating money for education as required

SALEM — Lawyers for the Oregon School Boards Association say school districts plan to sue the Oregon Land Board if it doesn't proceed with a full-value sale of a swath of coastal forest to either a private buyer, or the state.

Some 82,500 acres of the Elliott State Forest in Coos and Douglas counties are up for sale, a contentious proposal that has rallied the state's environmental groups.

The land is constitutionally required to generate revenue for the Common School Fund, which is essentially an endowment for public K-12 education.

The land is supposed to generate revenue for the fund, but the forest has become more of a financial liability of late because of declining timber harvests. The Land Board — comprised of the governor, state treasurer and secretary of state — is basically a trustee for the beneficiaries of the fund, the state's public schools.

In 2015, the board began a process to sell the land, only to receive one bid from a partnership between a timber company, Lone Rock Resources and the Cow Creek Band of Umpqua Tribe of Indians, a sale that the governor now opposes.

In an April 28 letter to the board, the association argued that the board must sell the forest to the partnership between Lone Rock and the Cow Creek Band of Umpqua Tribe of Indians, or have the state buy it outright by contributing its appraised value of $220.8 million to the Common School Fund. That's a tall order as the Legislature is wrestling with a $1.6 billion shortfall in the state budget.

No other proposal, including a bill before the Legislature to transfer certain state trust lands to other entities, meets the state's obligations to public schools, the attorneys claimed, citing a 1983 Oregon Attorney General opinion. That opinion, they argue, authorizes the board to "promote noneconomic values, but those values are secondary to the 'paramount objective' of financial return to the Common School Fund."

"We appreciate that some individuals may place a higher regard on noneconomic values of the forest, such as scenery or recreation, than on the value of the forest as an economic asset to benefit the state's public schools," the letter states. "The board, however, may not consider the desires of anyone other than the state's schools."

A bill sponsored by state Sen. Arnie Roblan, a Coos Bay Democrat, would identify common school fund trust lands that have "limited performance potential" and transfer them to state, federal or tribal entities, according to a Legislative Policy and Research Office analysis.

Gov. Kate Brown has proposed using $100 million in state bonding capacity to buy a portion of sensitive areas of the forest and negotiate a new habitat conservation plan with federal agencies on the rest of the land, while also providing a chance for tribes to exercise ownership. She wants to decouple some or all of the land from its obligations to the Common School Fund.

Tobias Read, the state treasurer, said recently that he sees a "path forward" for public ownership — despite indications earlier this year that he would support the sale. Secretary of State Dennis Richardson, the lone Republican on the board, supports the sale of the land to Lone Rock and the Cow Creek Band of Umpqua Tribe of Indians.

The land board is scheduled to meet May 9.