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The ANA Messenger: The Economic Development Issue

Winter 2012

Published: March 8, 2013
Audience:
Social and Economic Development Strategies (SEDS), All
Types:
Newsletter

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Alamo Forest Products Enterprise

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This is a three year project headquartered on the Alamo Navajo Reservation, non-contiguous to the main Navajo Reservation. Project activities take place on federal, state, and private lands off reservation where the project provides contracted forest restoration activities of thinning, marking, and monitoring of forest and woodlands; while at the same time harvesting wood for value-added products of firewood, flooring and other adaptations of the small diameter wood harvested. During the first year of the project, staff met with Alamo Navajo School Board, Inc (ANSB) board members along with legal and business consultants to explore the transition to a for-profit enterprise which included incorporation of the enterprise as a Navajo Nation LLC or an LLC under the State of New Mexico. There are considerations that need to be taken into account under either incorporation, particularly employment laws.

Two people using chainsaws to clear small trees

Project Beginnings

In 2003, ANSB entered into an Assistance Agreement with the Bureau of Land Management (BLM) Socorro Field Office to conduct hazardous fuels reduction activities and perform improvements on public and adjacent lands administered by the BLM. The project was placed under the oversight of the Alamo Community Services Division to implement a work force development and training project. BLM provided equipment, materials, and training in safety, forestry vocabulary, forest management techniques, and contracting. One crew of 10 was trained in December 2004 and another 10 participants were trained in March 2005. Unfortunately, without an administrative or management position to oversee the day-to-day operations and provide the “business side” of contracting, the trainees did not have the business knowledge or skills to bid on a contract with BLM or any other federal agency, resulting in no contracting activity. Throughout the development of crews to do restoration work, a partnership was developed to advise and provide guidance in growing the Natural Resources Department.
 
With support from a Collaborative Forest Restoration Program grant in 2008, ANSB was able to establish a Natural Resources Department. This department has worked to successfully develop forest treatment crews to conduct contract restoration services on public and private lands. Currently there is a 12 member crew; 10 males and 2 females. All of the crew fall within the 18-34 year-old targeted age group. This crew has been supported and encouraged to attain further training. To date one of the crew has attained their GED; seven crew members have attained their driver’s license; several crew members have become Heavy Equipment Operator certified; all crew members have received first responder training, five crew members have completed first aid and first responder training, monitoring training, and many have made academic gains in the core areas of reading and math. In the fall of 2010, the crew began processing and shipping firewood to enhance the utilization of product harvested by the thinning crews. The demand for firewood has exceeded expectations and it has become obvious this is an opportunity to establish a firewood and stewardship business which could be operated outside the structure of ANSB, a non-profit entity. The business will have the benefits of being a minority owned small business, located in a HUB Zone and therefore be able to bid on projects that have small business, minority owned, and 8A priorities; an impediment under the non-profit status of ANSB.

In the proposal development stage, it was discovered that all partnering agencies had similar needs and goals for a highly trained, locally accessible workforce to perform forestry stewardship activities. Development of a business that encompasses the success of the thinning crews and the firewood sales is the focus of this project.

Project Development

When ANSB initiated the concept of a Natural Resources Department, it was an idea which promulgated the submission of a Collaborative Forest Restoration Project (CFRP) proposal to the U.S. Forest Service. ANSB recruited partners in 2003 when it first began its efforts to obtain a CFRP grant. As a result of this first partnership, ANSB was able to secure a CFRP project in 2008. Today, that partnership has grown from a CFRP partnership to an advisory partnership that has also worked to secure an Integrated Resources Management Planning (IRMP) grant from the Bureau of Indian Affairs which provides funding to do resource management planning for Alamo Band lands on the Alamo Reservation. The partnership is now an advisory group for the Natural Resources Department with each partner providing consultation and services.

The partnership is the logical vehicle for synthesizing ideas. Additionally, during the course of project planning and implementation, the project staff report to the Alamo Community at Chapter (local government) meetings, ANSB board meetings, and via radio station forums on the ANSB local public radio station.

Poverty and unemployment have been insurmountable obstacles to Alamo Community members who have not been in the mainstream and have no experience interacting with the mainstream. Historically, clients who went off-reservation had difficulty in completing these programs due to barriers created by lack of transportation, affordable housing, childcare and other support resources. These obstacles are not an issue when we are able to train and employ locally to meet the needs of the community.

Key Project Staff

Bill Ferranti, ANSB Natural Resource Specialist, is the Project Director for this project. Gail Campbell, Program Evaluation and Development Coordinator, and Lynda Middleton, Director of Administration, provide administrative support for the project. ANSB’s legal firm, Roth, Van Amberg, Gomez and Abeyta, provide consultant services for the transition to a for-profit enterprise that is under the Alamo Navajo School Board, Inc. Brett Ken Cairn, a business consultant, has provided consulting services to develop and implement a business plan.

Project Goal and Objectives

Creating a viable business within the framework (alongside the) ANSB organization to market small diameter wood products and capitalize on the unmet needs for forestry stewardship services.

Objective 1: Increase the number of crew members by 67% within the first year of the project. Baseline of 12 members currently with an increase of 6 within the first year, a Crew Foreman and Business Manager will also be hired in the second year of the project, and one additional crew member in each of years two and three.

Objective 2: Increase the production of firewood for sale from 345 cords baseline (2010 partial season) to 1500 cords per year by year three of the project; and stewardship activities from 600 acres treated to 800 acres treated by year three of the project.

Objective 3: Develop business structure, including development of bona fide business entity, with accounting, personnel, marketing, and other necessary systems in place within the three years of the project.

The primary outcome identified for this project is the transition of the ANSB forestry program from a subsidized employment program to a viable forest stewardship service and wood products company.

 

Stacks of firewood packaged for transportation A front loader clearing brush

Need for Project

The development of a viable business is paramount to this project. The firewood sales established thus far by the existing Natural Resources Department indicate the need for such services. Letters of commitment indicate potential sales of firewood in the amount of 1500 cords for the 2012-13 season. The thinning crew, although established and recommended for the quality of their work, needs to become more efficient in their application of job skills to ensure their efforts become self-sustaining. Additional training in the utilization of heavy equipment in the forest and in the yard for the existing crew will help assure the continued viability of these crews and add to the diversity of the overall operation to encompass a variety of stewardship activities.

Small diameter wood products are a growing industry based on the need to re-establish natural fire regimes throughout the forests of the southwest and across the country. This growth has increased the demand for products removed as a result of thinning projects. The high costs associated with heating homes and the appeal of not using high amounts of expensive fossil fuels has increased the demand for firewood. There is interest and some indication that the sales of cants (4”x 4”; 4”X 6”; and 6”x 6” blocks of wood in 4’ to 8’ lengths) will be a market to tap into by years two and three. Flooring produced by these cants is aesthetically pleasing. These products are less labor intensive to produce, thereby increasing the income derived from individual logs.

Additional tangible benefits will include the increase in jobs within the Alamo Navajo Community. This community is one of the most isolated and poorest American Indian communities in the state with unemployment at 37.8% and 60% of the population living below the poverty level. The Santa Fe New Mexican (March 12, 2010), reported that January 2010 had the highest adjusted unemployment rate in the past 22 years. Increased employment in the target group will reduce unemployment from 73% to 67% during the first year of implementation and another 1% over years two and three. Traditionally, community members at Alamo worked in forestry occupations as fire fighters on crews during summer fire season and as wood cutters in the fall. This project has provided the opportunity to increase the efficiency and skills of highly trained crews that are critically needed by all partnering agencies to complete forest stewardship projects. Additionally, the training provided has given Alamo crews the competitive edge for this program to become a self-sustaining business with long-term socio-economic impact on the Alamo Community. Benefits to partnering agencies including US Forest Service, along with other public and private landholders in the area, include a reduction in the threat of catastrophic fire and overall improvement of area watershed health through removal of encroaching small diameter fuel loads. The establishment of a viable business for the Alamo community will provide a source of unsubsidized economic development.

The growth of the Natural Resources Department through this grant and the collaboration with partners will assure the program is self-sustaining. By hiring a foreman and a business manager, not only will there be two additional jobs created, it will provide the Natural Resource Specialist with time to manage the program, bid on contracts, collaborate to find markets for products, provide supervision of the overall business development, and maintain continuity. The BIA Integrated Resource Management Program (IRMP) grant has been secured to help guide ANSB in developing a resource management plan for the Alamo Reservation with an emphasis on economic development. Ongoing training through the New Mexico Forest and Watershed Restoration Institute, Forest Service or other organizations such as New Mexico Forest Industry Association will assure local crews are available to successfully bid on contracts with Forest Service, BLM, New Mexico State Forestry and private land owners. The Safety Certification Program currently provided through the New Mexico Forest Industry Association will continue to be utilized to maintain reduced workman’s compensation rates (rates have been reduced from 0.27 to 0.1154 as a result of ongoing, high quality safety training), and to assure crews have proper safety training. Lower workman’s compensation rates will allow our crews to be competitive in their contract bids. The diversity of the partnership supporting this project assures treatment and utilization will be conducted in the most effective manner and the transition to a for-profit business model employs best practices for success.

We provide the following advice in applying for an Economic Development grant from ANA. It is meaningful process in that it requires planning, not only planning for project success, but planning for project success by also analyzing challenges and contingencies potentially impacting aspects of the operations, developing sound partners to assist in the development efforts, and taking the planning time necessary to develop a business plan to be utilized to build on partnerships, financing, and business development. ANSB’s initial ANA grant was submitted with a business plan, but ANA funded the project with the revision for the first year to readdress the business plan and refine it. We are glad we did, as it afforded the project the time to fully develop its marketing efforts, product development, and cost analysis.

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