Humboldt Bay Harbor, Recreation, and Conservation District

July 23, 2009

Honorable Patricia Wiggins
California State Senate
State capitol, Room 4081
Sacramento, CA 95814

RE: Request for Assistance in Pursuing Financing from CalPERS for Freshwater Tissue Company Venture

Dear Senator Wiggins,

The Board of Commissioners of the Humboldt Bay Harbor, Recreation and Conservation District (District) requests your assistance in opening discussions with the California Public Employees’ Retirement System (CaIPERS) regarding potential for investment in the Freshwater Tissue Company (FTC). Our District was formed in 1970 by an act of the State legislature to oversee commerce, navigation, recreation and the protection of fisheries and the environment in the Humboldt Bay area and five elected Commissioners represent all of Humboldt County. It is not only our role in promoting commerce around Humboldt Bay that spurs us to pursue the potential for capitalization of this venture, the business plan also insures that the aquatic environment will be protected and that regional forest health will be improved.

The closure in October 2008 of the Evergreen Pulp Mill has devastated our economy and has had particularly great impacts on our District because of the loss of ship traffic. The mill was subsequently purchased by the Samoa Acquisition Group and the investors decided to convert it from raw pulp to eco-friendly toilet tissue production. We have been privileged to review the FTC Business Plan and we judge it to be very sound. The essential nature of this commodity and the expanding market for “green” products make the likelihood of the success of this venture high and, therefore, we believe something CalPERS should consider funding.

Freshwater Tissue Company will not only create 425 living wage jobs, it will create an estimated 2,550 indirect jobs because of the amount of capital it will put in circulation in Humboldt County. Much of the forest land of our area is in young growth conifers and hardwoods and the chips used for FTC will come from unwanted tanoak, other hardwoods trees or small conifers that need to be thinned to reduce competition and improve forest health. This cycle of supply for FTC will thus help revitalize the redwood forest that our region is famous for and upon which future generations rely. By investing in this venture, CalPERS would assist us greatly immediately and long into the future as a healthier redwood forest produces additional high quality wood products.

It has come to our attention recently that CalPERS is funding entities competing with those here in California and does not necessarily invest in businesses within the State as a priority. An example is their proposed investment of $3 billion in deep water ports in Virginia that compete with those within our State. As a member of Senate Public Employment and Retirement Committee, we would like to call your attention to the business model of the Retirement Systems of Alabama that invests preferentially in ventures within the State. Recent studies by the University of Alabama indicate that there are very substantial economic benefits through job creation and an increased tax base throughout the State.

We look forward to hearing from you or your staff and to participation in the meeting that we hope you can arrange with appropriate parties at CaIPERS. Thanks so much for your efforts in this regard.

Sincerely,

Dennis Hunter President, Board of Commissioners

CC: Governor Arnold SChwarzenegger
Assemblymember Karen Bass
Assemblymember Wes Chesbro