Trail may have another resource to tap into after council advanced a proposal for ATCO Wood Products to begin logging city-owned forest in the Violin Lake Watershed by June 2014.
Discussions with ATCO were initiated earlier this year to determine if the producer of softwood veneer would have opportunity to expand into the 45-hectare area, which would add $640,000 to the city’s revenue.
“The last time we did business with them in 2002 it was very well executed and they lived up to all their commitments,” explained David Perehudoff, Trail’s chief administrative officer (CAO) during the governance committee meeting Monday.
That section of Violin Lake land derived the city almost $750,000 and has since been replanted and a current review indicates the reforested area may be able to be logged again in future years, added Perehudoff.
“We don’t see any issues or concerns and ATCO is looking at the city to commit and formalize an agreement so they can establish their plans in term of resources to get in there and start logging the property.”
The city has developed a partnership with the wood products company related to ATCO’s ownership of various haul roads that gain access to city property with the company assuming responsibility of all issues related to logging the area, and paying Trail on the basis of the volume of timber cut from city land.
“Due to the fact we have no way to get the logs off of the city’s property over land, the costs would be prohibitive,” explained the CAO. “The only other way to log without the use of haul roads would be via the air and this is not economically feasible.”
With the city investigating measures to decommission the Cambridge Dam, a barrier to water drawn from Violin Lake and stored in a reservoir known as the mill pond, Trail may have a future in the sale of choice wood and pulp logs.
“Additional logging opportunities in the lower areas of the valley around the mill pond and Violin Lake will be looked at again next year,” explained Perehudoff. “There isn’t the revenue to start roads but with respect to the dam and if the pond is drained that will impact and possible gain access to some pretty prime timber.”
A team of engineers, is working on the plan to decommission the Cambridge Dam with a report expected mid-January.
ATCO’s current proposal takes into consideration the changes in the logging market and the increased cost associated with logging based on the timber cruise.
The company is willing to pay the city a fixed price of $32 per cubic metre for saw logs and $5 per metric tonne for pulp logs.
That price is $6 less per cubic metre than Trail received in the previous deal, because according to an ATCO presentation given to the city, wood prices have declined by 13 per cent since 2002 and costs to log and haul the timber to market have increased.