The ripple effect

2009-12-26T23:45:00Z The ripple effectBy Steve Lathrop, Albany Democrat-Herald Albany Democrat Herald
December 26, 2009 11:45 pm  • 

MILLERSBURG — For the last 30 years trucks from Allied Waste have been making at least four trips a week to Millersburg, picking up garbage from the paper mill.

Not any more. When International Paper’s business operations shut down for good this month, the reality of the mill’s demise sunk in for Allied Waste and many other businesses in the mid-valley.

“It was our largest industrial customer,” said Kevin Hines, Allied Waste operations manager. “One employee spent 30 percent of his time picking up  there.”

Hines acknowledged that the real tragedy of the shutdown is how it affects the 230 employees now out of work. Nonetheless, the mill’s closure reaches every corner of Linn County and beyond.

Indeed, the fallout from the IP decision to leave puts added financial pressure on an area already suffering from one of the state’s highest unemployment rates, at 13.7 percent.

“The loss of the highest taxpayer in the county along with a $20 million payroll is crushing,” said John Pascone, president of the Albany Millersburg Economic Development Corporation. 

But the impact is far more expansive.

“For every job lost at IP there are three or four other jobs affected,” Pascone said.

The closure is expected to impact restaurants, retail, utilities, nonprofit service agencies and much more.

Pascone is directly involved with trying to minimize the impact, seeking new business to help relieve the situation.

“You can get a lead on a business that will pick up 15 or 20 jobs but most of those wouldn’t be family-wage type jobs. It takes a lot of small businesses to make up for what we lost,” he said.

The devastation is perhaps most visible in the loss of $2,671,789 in tax revenue. County Commissioner Roger Nyquist estimates a 3 to 5 percent impact on the local economy.

“It’s hard to focus on what it will mean to the county,” Nyquist said. “First and foremost, we’re concerned for the families.”

He said the closure jeopardizes employment at small businesses that depend on commerce from mill employees and businesses supplying the mill. Businesses such as Horner Enterprises in Sweet Home.

Horner Enterprises isn’t nearly as big as Allied Waste. It employs fewer than 20, but the effect of the mill’s closing may be more profound for the small company, which will likely face layoffs next month.

Jay Horner’s company specializes in recycling waste materials. For 10 years, his contract with International Paper called for his company to pick up byproduct.

“We were there seven days a week,” Horner said.

Finding something to replace the loss is proving difficult. Right now he expects at least two of his current crew will lose their jobs.

“It’s more than us,” he said. “We recycled the material we picked up to dairies and farmers at a low cost. They’ll need to use more expensive materials now.”

At Allied Waste, Hines said the company has been able to make adjustments without job loss. Employees will be cross-trained and absorbed into other departments.

Still, the financial impact is substantial. Besides its pick-up at the mill, Allied Waste hauled six to eight loads of recycled cardboard to the Millersburg plant each month. The service remains, but now it is a more expensive, longer haul, stretching to IP’s Springfield plant.

“We’ll make the same number of deliveries. It just costs more to get them to Springfield,” Hines said.

In Millersburg, City Administrator Barbara Castillo can see that the coming months will be difficult.

Millersburg received upwards of $800,000 in franchise fees from utilities servicing the mill. That includes $500,000 alone from a power bill that annually exceeded $10 million, according to Castillo.

Fees helped fund numerous projects from housing to roadwork.

“It’s going to hit us hard but we don’t know for sure what the consequences will ultimately be,” Castillo said. “The mill accounted for 40 percent of our tax revenue.”

Castillo said the city has already had to put improvement plans for some road projects on hold.

While businesses and city and county governments struggle to compensate, the long arm of the shutdown reaches nonprofits as well. In a time when  donations are diminishing, local agencies are losing one of their best friends.

Greg Roe says the human toll of the mill closure is profound for workers and  others in the county who benefited from their contributions and volunteerism.

“There’s no way to replace what the people at the mill contribute,” said Roe, director of Linn County United Way. “They are great friends and volunteers.”

Roe said the mill annually contributed between $40,000 and $60,000 to the United Way campaign. He said workers also showed strong support for nonprofit agencies by serving as coaches, board members, drivers and in many other capacities.

“What they’ve done in the community is of incredible value and a lot of that is going to be gone. Everyone gets hit,” Roe said.

After IP’s announcement, Pascone, Nyquist, Castillo, Millersburg Mayor Clayton Wood, Albany Chamber President Janet Steele and a group of concerned individuals from business and government began meeting to discuss potential solutions.

“We started brainstorming ideas to see what we can do and what businesses might work at the site,” Pascone said.

He pointed out that the 9-acre mill property has attractive attributes for industrial use. Permits are in place, water and sewer and a co-generation facility are set, and it’s accessible by rail and from the freeway.

“It’s a real asset but we can’t do anything until IP decides what its plans are for the property. Hopefully we’ll get another use for the facility sooner rather than later,” Pascone said.

Until then, Millersburg, Albany and the entire mid-valley will feel the loss. Hines called it a domino effect that reaches everywhere.

“It’s very sad for the entire community,” he said. “It touches us all.”

For Castillo, the emotional side is as devastating as the financial problems created.

“People here will drive by the mill every day and see no smoke coming from the stack and no cars in the parking lot,” she said. “It’s right there and we feel it.”

Copyright 2015 Albany Democrat Herald. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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