Table 1: Population Growth, Area Percent Change ( ) Modoc 9,678 9,449 9, Alturas 3,190 2,890 2,

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1 Economic Analysis Effects of Proposed Action Compared to No Action Alternative Information Sources Merchantable timber volumes for the economic appraisal were derived from inventory plot data that was gathered throughout the proposed treatment units. The total project volume was then appraised at market rates for the appropriate species. The cost of harvest and hauling operations was estimated using recent contracts of similar content and scope as well as input from local industry professionals. Setting Local or County Economy Modoc County, which encompasses approximately 3,917 square miles, lies in the northeast corner of California bordering Oregon and Nevada. The approximate population within the county is 8,965 as of July 1, 2015 (United States Census Bureau It is an extremely rural county with a low population density of 2.5 people per square mile. The economy is largely dependent on agriculture and management of the land and natural resources. The Modoc NF encompasses approximately 83% of the county (Modoc NF Travel Management FEIS 2009). Approximately 90% of the county consists of public land. The government (i.e., federal, state, county, local) is the largest employer, accounting for not quite half of all wage and salary jobs ( Consequently, management activities and economic stimulus generated from federally managed lands has a large effect on the surrounding communities. A large decline in the timber industry over the past 20 to 30 years has had adverse effects on the county s economy. The county once contained several saw mills that provided jobs and stimulus to the economy. Currently the county has only one small family-owned mill located in Alturas, CA. Table 1 depicts the current and historic populations of California, Modoc County and its main urban center of Alturas. California s population increase is similar to that of the United States as a whole. During this timeframe, Modoc County remained stable with little increase in the population. However, Alturas experienced a loss of 14.6 % of the population. Table 1: Population Growth, Area Percent Change ( ) California 29,760,021 33,871,648 37,253, Modoc 9,678 9,449 9, Alturas 3,190 2,890 2, Source: U.S. Census Bureau, 2010 and California Department of Finance, Demographic Research Unit Table 2 depicts the demographic characteristics of Modoc County in comparison to California as a whole. The percentage of women, those under 20 years of age and middle age (20-64 years of age) are similar.

2 However, Modoc County has a larger percentage (19.7) of persons over 65 years of age compared to California (11.4). This is attributed to those of retirement age wanting to move to more rural areas of the state. Table 2: Demographic Characteristics, Share in Total Population (Percent), 2010 Area Women 20 to 64 years of age Under 20 Years of Age 65 Years of Age or Older California Modoc Source: U.S. Census Bureau, 2010 Environmental Justice USDA agencies are to ensure to the greatest extent practicable, minority and low-income populations do not experience disproportionately high and adverse effects from USDA programs and activities. Table 3 summarizes the percentage of the population made up of ethnic minority groups in Modoc County as well as California and the United States as a whole. Modoc County has a lower minority population than California or the United States, but a higher Alaska Native or American Indian population.

3 Table 3: Minority Populations, 2010 Item Modoc County California United States Total Population 9,686 37,253, ,745,538 Percent of Total White Black or African American Alaska native or American Indian Asian Native Hawaiian And Other Pacific Islander Other Race Two or More Races Hispanic or Latino Total Minorities Source: U.S. Census Bureau, Individuals who identify themselves as Hispanic or Latino might be of any race; the sum of the other percentages under the Percent of Total Population column therefore does not equal 100 percent, and the sum of the percentages for each racial and ethnic category does not equal the percentage of total minorities. 2 The total minority population, for the purposes of this analysis, is the total population for the geographic unit analyzed minus t the non-latino/hispanic white population.

4 Table 4 reflects the per capita income for residents of Modoc County. This information shows little change in income in the area. The poverty rate in 1999 was 21.5 % and in 2010 the poverty rate was 19.8% for the county. In 2014, percent of persons in poverty was 20.2% ( This is the highest in all the northern counties of California and one of the highest statewide. There is evidence of a large income disparity in Modoc County compared to the other 22 counties in this region of California. Table 4: Per Capita Income; Modoc County Year Nominal Per Capita Income Nominal Per Capita Income (adjusted for inflation, 2004 dollars) 1990 $15,641 $21, $20,802 $21, $20,769 $21,698 Source: U.S. Census Bureau, 2010 and California Department of Finance, Demographic Research Unit Proposed Action Direct Effects The total appraised value of delivered, merchantable saw log volume generated from the proposed activities would be approximately $2,907, (Lassen 15 Region 5 Appraisal). This represents the estimated value of saw log material ( 10-inch DBH) proposed for removal including the cost of harvest and hauling to the nearest available sawmill. Table 3-19 displays the value of this material and the costs of proposed road improvements associated with the project. Table Estimated Timber Sale Revenue Estimated Timber Sale Revenue Estimated Value of Delivered Wood Products $2,907, Estimated Road Improvement Costs $253, Total Revenue $2,653, Employment opportunities have direct and indirect effects on the local economy. Direct effects would be associated with the primary producer. The manufacturing of lumber from the Lassen 15 project would increase employment opportunities. The proposed action would result in positive economic benefits for the local communities and counties. The amount of work resulting from this alternative would last for approximately 10 years and would contribute positively to the local industries that depend on service contracts or a steady supply of forest products and jobs for forestry-related work within the zone of influence. There would be an economic

5 return of money to the community from associated harvesting activities, processing and sale of forest products and from service contracts awarded to complete post-harvest treatments. The proposed action would provide timber yield tax, administered by the State Board of Equalization. This tax is not paid by the Forest but is paid by private timber operators and is based on the amount of timber harvested in a given year on both private and public lands. The tax is 2.9 percent of the value of the harvested timber. The taxes are collected by the state and approximately 80 percent is returned to the counties in which the timber was harvested. The proposed action would also provide Forest Reserve money to Modoc County in which the Lassen 15 project is located. The counties would receive 25 percent of the revenues raised from the sale of timber to be used for county roads and public schools. For over 100 years this revenue sharing act has been on the law books and provided revenues for rural counties and schools. Proposed Action Indirect Effects Indirect effects account for employment in service industries that serve the lumber manufacturer. These industries would include logging, trucking, fuel supplies, etc. Indirect effects are also determined by wages. Wages paid to workers by the primary and service industries are circulated through the economy for food, housing, transportation, and other living expenses. The effects of the proposed action would increase or retain forestry-related employment opportunities. The local Alturas Lumber Mill re-opened in 2014 and began purchasing local timber sales and processing wood products. This is a small family owned business that is reliant on local timber sales in order to maintain operations. This project would provide the opportunity for multiple timber sales to be offered over a 3 to 5 year period and allow for a continuous supply of wood products over the next 10 to 15 years. This project would have a significant impact on the ability of this local mill to sustain operations as well as impacting the rest of the community. Currently, several logging companies reside within Modoc County and in nearby adjacent towns of the surrounding counties in both California and Oregon. Due to the rural and isolated nature of this area, the economies of the small towns scattered throughout Modoc and adjacent counties are very much interrelated and dependent on one another. Localized economic factors such as general commerce, availability of equipment and business resources, steady proficient workforce and employment opportunities as well as the health and sustainability of the surrounding natural resources play a major role in the upward or downward economic trends of the entire rural community. Conversely, these economic trends have a rippling effect throughout Modoc County as well as surrounding rural counties. Proposed Action Cumulative Effects When added to the reasonable foreseeable activities on National Forest System lands and surrounding private lands, there could be enough work for multiple logging operators to harvest enough raw material to help meet the needs of the sawmills and cogeneration plants. The proposed action would provide revenues from timber sales to be used to fund service contracts and would complement other vegetation

6 and fuels management funded projects across the forest through time. The local economy would receive benefits from associated employment such as food, lodging, and transportation businesses. The sum of direct and indirect effects is the total economic impact in terms of jobs. The effects of the proposed action would increase or retain forestry-related employment opportunities. Counties would use the timber yield taxes to fund county programs and Forest Reserve money for county roads and public schools. The proposed alternative would have a positive effect on maintaining local infrastructure that is imperative to implementing future management opportunities. The proposed action would provide opportunities for long-term employment and rural community stability because the positive economic effects of the Lassen 15 project would be added to potential future projects to sustain economic activity into the future. No Action Alternative Direct Effects The direct effects of the No Action Alternative would be that there is no positive economic benefits for the local communities or counties. There would be no timber yield tax produced and made available. No Forest Reserve money would be provided to Modoc County. No Action Alternative Indirect Effects Indirect effects account for employment in service industries that serve the lumber manufacturer. These industries would include logging, trucking, fuel supplies, etc. Indirect effects are also determined by wages. Wages paid to workers by the primary and service industries are circulated through the economy for food, housing, transportation, and other living expenses. Under a no action alternative this projected revenue would not be generated. Activities other than the timber harvest may not be funded or practical. These activities may include prescribed burning, removal of non-merchantable material (< 10-inch DBH), stream restoration and aspen release treatments. These restoration activities are intended to improve overall forest and ecosystem function but would not take place under the no action alternative. The majority of NEPA analysis and preparation as well as field reconnaissance have been completed; therefore, the costs associated with these activities have been invested into the project and would not be recovered at any level without implementation. This project has the potential to provide jobs for people within Modoc County as well as the surrounding areas through the offering of multiple timber sales. In addition, an increase in local revenues would be generated through the purchase of local fuel, grocery products, equipment and mechanical needs as well as general business patronage by the contracted workers and their families.

7 No Action Alternative Cumulative Effects The no action alternative would have a negative effect on maintaining local infrastructure that is imperative to implementing future management opportunities. The no action alternative would not provide opportunities for long-term employment and rural community stability because there would be no positive economic effects of the Lassen 15 project to be added to potential future projects to sustain economic activity into the future. Cumulatively, the costs to the U.S. Treasury would continue as time passes with a no implementation decision. Under the no action alternative, forest health would continue to decline, causing an increase in associated tree mortality rates (see Graphs 3-1 and 3-2). These elevated mortality rates represent a loss in potential revenue as well as increased fuel loading and threat of high intensity wildfire. High intensity, large scale wildfires pose a large economic loss on many different fronts. Suppression costs and potential loss of property are large, unpredictable variables that impact communities and Forest Service budgets on an annual basis. These events also pose a large expense in landscape recovery activities, loss of productive forest land for future decades, impaired stream function and overall decreases in ecosystem function.