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Originally published Thursday, January 2, 2014 at 8:15 PM

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TransAlta’s downsizing pinches Lewis County revenue

In 2011, the Lewis County portion of TransAlta’s property was valued at about $540.1 million. Within a year, it had tumbled to $360.8 million, according to the state.


The Chronicle

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If TransAlta’s 2006 mine closure ruptured the local economy in a single burst, the power company’s current shift from coal to natural gas, is more like a fizzle — the slow deflation of Lewis County’s essential revenue source.

For years, TransAlta’s multimillion-dollar facility has been a major part of the tax base for the Centralia School District and Riverside Fire Authority.

But in 2011, the Legislature ordered Transalta to transition from a coal-fueled power plant to a natural-gas fueled power plant.

Since then, TransAlta has downsized its operations — and with it, its assessed value.

In 2011, the Lewis County portion of TransAlta’s property was valued at about $540.1 million. Within a year, it had tumbled to $360.8 million, according to the state.

The loss of $180 million in taxable property means challenges for the school district and, in particular, for Riverside Fire Authority.

Under state law, Riverside cannot raise its levy above 1.5 percent for fire services and 0.5 percent for EMT services.

The fire authority is looking at a $400,000 shortfall, and Chief Jim Walkowski says the sum only can be made up by reducing his 27-member force to 21.

The Centralia School District has more flexibility. It sets a fixed amount to be collected each year.

It then adjusts its tax rates accordingly, ensuring it receives its full payment.

It is guaranteed funding — as long as taxpayers continue to pass the levy.

At the moment, Centralia is fighting to renew its 2013-2014 maintenance and operations levy.

According to the school district, the levy helps to bridge a 15 to 17 percent gap not met by state and federal funding.

Spokesman Ed Petersen said the tax money provides security to schools at a time when other funding sources are not guaranteed.

“There’s lot of uncertainly about how the state will fund us this year. The School Board had to consider that, as well as the impact on ratepayers in Centralia,” Petersen said. “That’s why we’re keeping it at the 2014 (amount).”

From 2011-2013 the levy rate has risen from 2 percent, to 2.18 percent to 2.63 percent.

Without changes from other funding sources — state or timber tax money, for example — taxpayers will see the levy increase to about 3.04 percent this year.

Centralia’s 2013 rate is low compared with south Thurston County schools like Rochester and Tenino, respectively, but comparable to neighboring Lewis County schools like Adna, White Pass, Chehalis and Onalaska.

A simple majority of 50 percent plus one voter is needed to pass the levy.

Riverside’s options are limited.

Though an unpopular place to cut, salaries and benefits make up more than 75 percent of the fire authority’s budget.

“Riverside has explored other cost saving alternatives to cutting personnel,” Walkowski said. “Unfortunately there are very few that will even assist in closing the revenue loss gap that we are experiencing. “

“These alternatives include all types of concessions for the employee group,” the chief said. “But so far we have not been successful in reaching an agreement that will not violate the labor agreement.”

Outside of staffing cuts, changes include a 5 percent voluntary wage reduction for the chief and fire chiefs, no 2014 COLA, transition to a high-deductible health-care program, and a greatly reduced budget.

Though TransAlta is unlikely to make a comeback in the near future, locals hope its past prosperity will be reincarnated as an industrial park.

After the 2006 shutdown of its mine, TransAlta donated 1,000 acres to the Industrial Park at TransAlta, a group dedicated to developing the property.

The group has received about $4 million from state and federal sources for infrastructure and is developing seven 150-300 acre sites intended to house manufacturing companies. Each site offers 2 million square feet of building space.

Lewis County is exploring working with the Department of Transportation to build a new interchange from Interstate 5 to the site, and TransAlta has committed to supplying rail, water and sewer access.

The state’s only remaining coal-fired power plant, Trans­Alta will shut down one of its two coal-burning units at the end of 2020, the other at the end of 2025.

According to the company, a team of about 15 employees is evaluating the viability of transitioning from coal to natural gas in Centralia.

TransAlta employs about 250 people locally.



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