DALE - When 530,000 board feet of timber, growing on land owned by Hood River County, sold to a Hood River logging company, officials opened the sealed bids in John Day.
The reason: This timber will be logged from 13,299 acres within Grant County.
Hood River County bought its property in Grant County on July 26, 2002. Hood River County paid $4,938,545, according to a copy of the deed at the Grant County Courthouse. For another $1,727,455, Hood River County acquired an additional 5,000 acres in Umatilla County, also in July 2002, according to the Umatilla County Clerk's Office and Hood River County officials.
This ownership of land across county lines has raised eyebrows in Grant County. For their part, Hood River County leaders defend the practice as a win-win arrangement.
"It's our true intent to make good things happen for your county and ours," said Rodger Schock, chairman of the Hood River County Commission.
In an Oct. 1 interview, Schock said communities in Grant and Umatilla counties welcome the economic activity of logging crews cutting timber on these Hood River County-owned lands.
"We're in the long-term investment process here. We didn't expect to reap a return on investment in the near future. We're investing for the long run to benefit the taxpayers of Hood River County, and in that process it's our intention to benefit the taxpayers of your county," Schock said.
Some local residents aren't so sure another county should own land in Grant County. Several citizens even urged the Grant County Court to seek a legal injunction against Hood River County.
"Counsel said we cannot file an injunction because we haven't been injured," cautioned Grant County Judge Dennis Reynolds during an Oct. 1 meeting held with 19 concerned citizens. Reynolds noted that Hood River County continues paying taxes on the land, so monetary damages would be difficult to prove.
The Grant County Assessor's Office reported that the land, which is located about 12 miles southeast of Dale in the Desolation drainage, was purchased by Hood River County from a private landowner. On the 13,299 acres, Hood River County paid taxes totaling $21,765.59 for the 2002 tax year. This revenue was generated on five tax lots with a total assessed value of $487,265, according to the assessor's office. Prior to Hood River County acquiring this property, Pioneer Resources I LLC - a company managed out of Poulsbo, Wash., by Olympic Resource Management - paid $22,184.70 in tax year 2001 under an assessment of $473,112, according to the assessor's office.
Schock said the Hood River County Commission has committed to paying property taxes. It's unclear under Oregon law whether a county as a property-owner can be taxed, but the commission has agreed to sign the checks, he said.
"We will pay property tax, already have, just as any other private owner would," Schock said.
Hood River County also intends to pay severance tax when timber is hauled to mills, he said.
Schock said he has visited the property and learned the details of the acquisition. The sale predated his recent election to the Hood River County Commission in November 2002. Nevertheless, Schock said he feels comfortable with the legalities of this unusual land ownership.
"We feel very comfortable with the legalities. I know Dennis (Reynolds) has done a lot of research and he feels the opposite," Shock said.
At the Oct. 1 County Court meeting, Reynolds stated his position.
"I do not believe they have the right to buy land in Grant County," he said.
It's a gray area that some Grant County citizens believe should be challenged.
"Somebody's going to have to solve the issue, and it's going to be a judge, I believe," Reynolds agreed.
How the sale happened
Hood River County's acquisition of land in Grant County started in the Columbia River Gorge National Scenic Area. Hood River County owned 1,000 acres in the scenic area, where regulations restricted what kind of management could occur, officials said.
"We wound up selling the land to the Forest Service, and we got a cash settlement," explained Hood River County forest manager Kenneth Galloway Jr.
Under these circumstances, state law stipulated no net loss of forestland, so Hood River County needed to acquire new acreage, Galloway said.
"We had to find additional forestland, and we got an attorney general's opinion many years ago that we could own land in another county," he recalled.
Enter Pioneer Resources I LLC. Pioneer Resources I LLC owns about 100,000 acres of timberland in California and Washington. Pioneer, which is managed by Olympic Resource Management, a subsidiary of Pope Resources, recently sold off its lands in Oregon. Among those lands were the 13,299 acres in Grant County, site of the Kelsay Creek and Park Creek timber sales.
"We sold our timberland to Hood River County," confirmed John Shea, director of business development and acquisitions for Olympic Resource Management.
According to Olympic Resource Management's Web site, "ORM is managing an orderly disposition process of all of Pioneer's timberland and real estate holdings in the West."
"All of Pioneer's land in Eastern Oregon has been disposed of," Shea confirmed in an Oct. 1 interview.
The issue of one county owning land in another was not raised by Olympic Resource Management, Shea said.
"It wasn't our place to question that as a seller. They certainly proved to be a knowledgeable, capable buyer," he said.
Hood River County commission chairman Schock said the Grant County land offered attractively different types of timber. Noting that Hood River County timberlands typically produce Douglas fir and a small amount of grand fir and pine, the commission wanted other tree varieties.
"We're diversifying our stock," he said.
Galloway, the forest manager, said Hood River County owns more than 31,000 acres of land inside Hood River County. The county's timberland is managed for a sustained yield, he said. Timber-sale revenue provides a third of the county's general fund, or about $4 million annually, Galloway noted.
Rumors that the county might swap the land into a more restrictive ownership worried Grant County citizens.
"There was some discussion about trading the land," Schock acknowledged, but he emphasized that the current commission does not embrace a philosophy of buying and trading lands.
Laws and strategy
Despite assurances to the contrary, the possibility of a land swap by Hood River County became a bone of contention for citizens at the Grant County Court's meeting. Citizens expressed concerns that after Hood River County officials finished logging the parcel in Grant County, they might launch a land trade to place the parcel in federal or tribal ownership.
The hourlong meeting became something of a strategy session.
Dave Traylor, who arranged the meeting with the Grant County Court, wondered if the timber sales themselves could be challenged in court. Others agreed that legal action could prompt public awareness and possibly raise concerns about the county-within-a-county ownership situation.
Logger Tad Houpt said, "The least we need to do is make sure it's not a good investment for them."
When Reynolds pointed out that he was reluctant to sue Hood River County without standing, activist Bud Trowbridge responded, "Well, make up something. The environmentalists do it all the time."
Reynolds said he planned to submit a list of questions to his counterparts in Hood River County.
"It's not a simple thing to try and get it stopped," he said.
He added, "We're on ground that nobody's tread on."
The Oregon Revised Statutes do not shed any particular light on the legal question of whether one county can own land in another. The laws state under the heading, "general powers of county as body politic and corporate" (Chapter 203.010), that each county has authority to "purchase and hold for the use of the county, lands lying within its own limits and any personal estate" and "to do all other necessary acts in relation to the property and concerns of the county." However, a later section seems to expand this jurisdiction beyond county lines. Chapter 203.132 reads: "The governing body of a county may include property located outside the county or within a city as part of the property to be improved or to be assessed for a public improvement, subject to the following conditions," and the conditions include if "the governing body of the other county or the city, by resolution, approves the improvement."
Schock said he recognized the legal disputes involved. However, he tried to blunt the criticism that Hood River County might deprive Grant County of tax revenue through a land swap.
"If that land were in private ownership today, the owner of that land could sell to the Forest Service or trade to the Forest Service ... and it's certainly a possibility that a tribe could purchase from a private owner. ... We're trying to be good stewards and treat our friends over there with respect," he said.
"We don't historically dispose of lands," he emphasized of the current commission, although he conceded that "this commission that I sit on can't commit to what future commissions will do."
Schock said he and his colleagues plan to meet with Reynolds and commissioner Boyd Britton at an upcoming Association of Oregon Counties meeting so they can discuss the ownership controversy.
Grant County citizens may press the issue prior to that meeting. Several suggested placing advertisements in the Hood River newspaper to solicit public support for their position.
Britton said the lobbying effort might pay off.
"At this point in time, we're not an injured party," he said. "Hopefully, somebody in Hood River County will wake up and say, 'Our county commissioners paid $6 million for property that isn't worth that.'"
Schock said this campaign would be misguided.
"We're going to be taking logs to the mills. There will be jobs in the woods. There will be jobs at the mill," he said.
Reynolds argued that a larger issue looms. He said the message of the Oregon Constitution is: "Government has no business owning land."