Last sawlogs running through Eureka mill

A potential buyout of the Owens & Hurst lumber mill in Eureka has fallen through and the countdown for the mill's closure next week is under way.

Mill manager and co-owner Jim Hurst said the remaining logs on deck will be run through the mill by the end of next week, and he is planning a ceremony of sorts for the last log to be processed.

In January, Hurst announced plans to shut down the mill because of lost confidence in the ability of the U.S. Forest Service to maintain a steady timber supply on the Kootenai National Forest, which surrounds Eureka.

Last month, Hurst said there was some potential for a hardwoods manufacturing company based in Kentucky to purchase the Eureka mill for processing wood products destined for Japanese markets.

But that possibility evaporated in the following weeks.

"I didn't ever hold too much stock in that scenario because the transportation of logs from Kentucky and Indiana to Eureka was just huge," Hurst said.

Rail transportation costs became apparent to the potential buyers and "their markets in Japan did not seem quite as solid as they hoped," Hurst said.

Deadlines for a deal were missed, Hurst said, "and I didn't feel right about keeping my people in limbo."

Hurst has since proceeded with planning for the closure. Sawed lumber will continue to be processed through the mill's planer over the summer, but most of the 90 people who work at Owens & Hurst will be unemployed by the end of next week.

An auction for all the mill's equipment has been scheduled Aug. 16 and 17.

Hurst said mill employees recently met for a "last supper."

"We had prime rib and we had just a tremendous turnout," he said. "We tried to keep it as upbeat as possible. It was just a good time for fellowship before we scatter like teenagers at a beer bust."

The mill's displaced workers are eligible for job retraining and relocation money, and Hurst says some of that money will be going to Flathead Valley Community College.

"I know several employees are looking in that direction," he said.

Other employees have gotten jobs at Stoltze Lumber Co. and Plum Creek Timber Co. in Columbia Falls.

"I'm pretty sure they are going to commute from Eureka," he said. "This little neck of the woods kind of grows on you after you live here a while. There are a lot of people who don't want to leave."

Hurst said it's hard to predict how many, but some workers will end up relocating and some will never return to the volatile wood-products industry.

"For the most part, employees are hoarding their funds, and I think that will probably be felt on Main Street," he said.

Northern Lincoln County is indeed anticipating the eventual, rippling impacts of the mill closure.

"Owens and Hurst was about 10 percent of our total revenue that we'll be losing on an annual basis," said Mike Henry, general manager of the Lincoln Electric Cooperative.

To compensate for that loss, the co-op plans to raise power rates by 5 percent next year, Henry said. That's in addition to a 10 percent rate increase that was planned for 2006, because Bonneville Power Administration rates are expected to increase.

The mill's power consumption is equivalent to 600 homes, Hurst noted, but maintaining a single line to the mill is far less expensive than maintaining 600 lines.

Gary Blaz, Eureka's superintendent of schools, said the school district will have to account for increased power rates along with many other impacts that won't be apparent for months.

"It's about 18 months before you see a drastic effect on the schools because of something like this," said Blaz, who was an educator in Anaconda when the Anaconda Copper Mining Co. pulled out of that community in 1980.

The Eureka School District sold an $8 million bond four years ago for construction of a new high school, and that debt has to be repaid over time by local taxpayers. While the loss of the mill certainly won't help with retiring that debt, Blaz said a recent analysis projected that a boom in recent home construction may offset much of the impact.

The biggest impact, he said, is the loss of a $3.6 million gross payroll in the community.

"There's no way to get around losing that money that circulates around the community," Blaz said. "We need something to replace that because that's part of the pulse of the community."

Blaz said there are 65 students in the district who are directly associated with the mill, but it's difficult to estimate how many may move away. And it's even harder to predict whether other families will leave because of job losses at other businesses that are indirectly impacted by the mill closure.

The state's current school funding formula provides funding to schools largely based on student enrollments. Declining enrollments generally translate to declining funding, unless the formula is effectively revised by the state Legislature this fall.

Blaz said people outside the community aren't aware of the biggest loss that will follow the mill closure.

"What people don't realize is that Owens & Hurst has been a huge contributor to the school district," he said. "They've provided scholarships and contributions to school programs …You just lose a good working company that supports the schools."

Reporter Jim Mann may be reached at 758-4407 or by e-mail at jmann@dailyinterlake.com