Sustained forests; sustained profits

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The RRR Program: Executive Summary

Rangin' 'Round Ro'noke, the RRR Program, is large and complicated. It is the right size for the large, complicated problems faced by the region for the near future.

The big idea is that an organization should create and operate a profit-oriented superior wildland management system for the Roanoke area. The program would

• Improve the environment of the region
• Increase and improve the economy of the area
• Increase tourism and related activities
• Add to the personality of the region

The project brings cooperating private land owners under contract and uses the resources of cooperators as in a share-cropping mode, gains funds along with them, and creates a working system. This is a land-development project but also a project to encourage all types of tourism and related, diverse outdoor activities.

Based on the principles of ecology and modern corporation dynamics, the organization to be formed is Lasting Forests. It is a "conglomerate", a set of highly related enterprises all working together, damping out fluctuations, diversifying in services and products, being driven by incentives, being flexible and synergistic, and "working the margin" very carefully with computer optimization. This is not a "blue chip" operation but it is after financial gains. The big idea is to create a "corporation" that no one has seen before with 20 units or enterprises.

Full details of the concept are available. Operation funds to create Lasting Forests and develop the RRR Program are from investors for staff to begin work. The organization is estimated to be profitable in 5 years. Financial gains are shared with cooperating land owners and investors after 5 years.

Part of the big idea is that Lasting Forests(under design) now has access to a massive international library; 30 years of experience, research, and related software; a new concept in wildland management, and motivation for the Program to succeed. The RRR Program may not be a bad idea.

The Bottom Line

"What will it cost?" is a typical question asked about a typical project. The RRR Program is not typical. It potentiates an investment already made in resource management. It reduces loss and prevents foregoing income or values. Of course there are costs, but investors typically concentrate on answers to probable or expected net returns from investments.

In all cases in the RRR Program we have included well-known units, things that need no major inventions or a "break-through" and we have included back-up or fail-safe tactics.

Parks and forests in the public domain are usually financial drains. Even if direct costs are ignored, they represent a loss of land for taxation for communities. The cost of owning land is, at minimum, the annual tax burden on the land owner. The RRR Program bottom line for success is that, at least, the annual tax equivalent is paid by the project operation. Minimum additional success criteria may be added such as the cost of supervising and auditing the RRR Program.

Depending on accounting procedures and policies, the system development can be paid for exclusively from funds derived from the major units of Lasting Forests.

Much of the activity of "learning" the place and the role of each enterprise of Lasting Forests requires the presence of the experts in the enterprise, unified work, and policy development. These are questions needing answers for the near future and for detailed budgeting. Because of the novelty, dynamic, and planned interactions in the Program, we propose frequent audits and stated thresholds, but suggest that detailed budgeting will be a wasteful exercise. Instead, we propose dynamic work, bi-monthly financial meetings, and frequent progress reports.

We propose to implement 12 units or enterprises within the first 3 years. We propose to cautiously gain funds from the various properties and activities (intensive use of forests, pastures, facilities, and creative development of ancillary operations). Driven by incentives, the shared 'profits' gained will contribute to Lasting Forests and to the RRR Program.

The preliminary estimates for start-up work are based on emphasizing:

1. Maximum exposure and marketing
2. Minimum capital outlay
3. Maximum use of un-developed resources of the tracts
4. Maximum communication and use of the internet
4. Maximum local involvement to create support and employment opportunities
5. Maximum use of the systems that are developed in the RRR Program on other lands and resources.

We propose a powerful incentive-driven procedure unheard of in wildland management:

• Each enterprise or unit maximizes its income...but over a 150-year planning period (with scoring of performance based on a mean to standard-deviation ratio).
• Each is encouraged to maximize use of System Central to gain planning aids, simulation, and optimization.
• Total costs are added for all enterprises and units; everyone seeks to minimize total costs.
• Landowners share 60% of direct product sales.
• 40% of all annual "profits" (Total income - Costs within each enterprise) goes to System Central
  (60% is retained within each enterprise; the more they make, the more they keep; some "support" enterprises do not make and profits)
• Of the 40%, after System Central expenses (those for the common costs of marketing, communication, transportation, services, etc.)the remainder is distributed as follows:
  • 10% goes to planned wildland studies
  • 20% goes to community and regional enhancement and development (e.g., providing GIS aids)
  • 10% goes to a contingency or emergency investment fund
  • 30% goes to Lasting Forests development of ecological and wildland-based systems
  • 30% is distributed equally to employees (based on hours worked per year)

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This Web site is maintained by R. H. Giles, Jr.
Last revision January 17, 2000.