289 



Bumper* QiA 4/3 



QUESTION 2. Per dollar of Forest Service funds expended, what return do you receive? 



ANSWER: Using tfie Revenues and Expenses reported In TSPIRS for FY 1 988, the return for the 

 Tongass was $0.87 and $0.59 per dollar spent without Regional Office cost and with Regional Office 

 cost Included, respectively. 



QUESTION 3. How much is Alaska Pulp Company paying per thousand board feet of prime spnjce sawlogs? 



ANSWER: The current contract rate for spruce sawlogs on the APC sale is $2.26 per thousand board 

 feet. The next rate redetermination Is effective January 1, 1991. Based on current appraisal data and 

 assuming no change in market or costs of production, the price of spruce would be approximately 

 $120-140/I^BF. 



QUESTION 4. How much is Ketchikan Pulp Company paying for spruce sawlogs? 



ANSWER: The current contract rate for spruce on the KPC sale is $96.67 per thousand board feet, 

 f^inor adjustments are made quarterly, based on species mix harvested. 



QUESTION 5. How much did each pulp mill pay the last time the markets were good in 1980? 



ANSWER: In 1 980 the rates paid for spruce sawlogs by the two companies were as follows: Alaska 

 Pulp Company, $55.31/(^BF; Ketchikan Pulp Company, $114.96/MBF. 



QUESTION 6. Why do you amortize road costs for such a long period In TSPIRS? 



ANSWER: The TSPIRS accounting system amortizes road costs following generally accepted ac- 

 counting principles. This "cost amortization" is different than the standard business practice of depreci- 

 ating assets such as roads over a 20- to 30-year period for business tax purposes. Standard account- 

 ing methods amortize costs over the period necessary to receive a return on the initial investment. In 

 the case of timber management on the Tongass, this period Is 80 to 1 20 years, or one timber rotation. 



This does not mean that the expected life of the road is 80 to 1 20 years. Rather, it means that we spread these 

 capital costs over the time it takes to grow a crop of trees. Some road construction costs have a longer useful 

 life. Costs for survey and design of the road, acquisition of the road right-of-way or easements, and costs of 

 basic clearing and sub-grade construction are generally one-time expenditures that are not time dependent. 

 Costs for repair and maintenance are added on in the year Incurred. 



FISHING INDUSTRY AND MANAGEI^ENT 



QUESTION 1. When we asked you about Tongass fishing at our hearing, you said salmon runs had never 

 been better. How are they doing now? 



ANSWER: In 1987 and 1988 the commercial salmon han/ests fell well below the 9-year average 

 (1980-88) of 138 million pounds per year. The han/ests in 1987 and 1988 were 86.1 and 86.2 million 

 pounds, respectively. We believe the reduced harvest in 1987 was due to poor marine survival and a 

 shortfall in pink salmon returns caused by poor egg survival and early freezing conditions in November 

 of 1 985. The low salmon returns in 1 988 are thought to be a result of illegal catches of immature salmon 

 on the high seas by foreign fleets. Evidence to support this claim has been gathered by the National 

 l^arine Fisheries Service and the Alaska Congressional delegation. 



QUESTION 2. When fish runs were good, your hearing statement indicated that careful Forest Service timber 

 practices might be responsible. Are you responsible for the downturns as well? 



10 



