365 

 Analysis of Additional Impacts 



Introduction 



In addition to the straight calculation of economic losses in the first section of 

 this report are other losses less quantifiable but equally as important. An 

 economic event of the magnitude of an APC closure would be devastating to 

 emy economy. It takes only moderate decline in economic conditions to cause 

 significant damage to an economy. 



Sitka's potenticil loss of one-fourth of its economic base is far more severe 

 than the Seattle Boeing recession of the 1970's when signs appeared saying, 

 "Will the last one out turn off the lights?". In Seattle's case the loss was just 

 5%, compared to Sitka's potential loss of 24% to 29%. Juneau's recession 

 which knocked real estate values down by one-third and triggered personal 

 and business financial grief was the result of a loss of less than 10% of the 

 economy. In Anchorage-where the real estate market collapsed, the banking 

 system destabilized, thousands of homes empty, businesses closed, meills 

 vacated and a two-year stream of business and personal bankruptcies 

 continues-the economic loss was less than 15% of total employment. Clearly, 

 the proportional loss for Sitka would far exceed these other cases. 



Local Government Impacts 



An APC closure would significantly reduce bonding ability and credibility of 

 the City and Borough of Sitka. Since APC directly provides 20% of the 

 electrical utility income and 30% of the water income, any bonding dealing 

 with these services would be seriously affected. 



Local government layoffs are likely to be in proportion to the municipal 

 government's decreased ability to generate revenue. Of the 389 jobs in local 

 government, an estimated 130 v^ be lost with proportional losses being 

 greatest in hospital staffing. 



School staffing will be reduced by one-fourth and the district will be stuck 

 with maintenance and utility costs for the complete school physical plant, 

 which will be underutilized because of the loss of over 400 students. Cost per 

 student will rise, yet State education fimding for Sitka will be dramatically 

 reduced. The only alternative is larger classes, fewer teachers and a likely 

 decline in the quality of education. 



The municipal hospital v^rill experience at least a 50% loss in patients and 

 revenue. In Fairbanks, for example, where the economy declined about 10%, 

 the occupancy of the hospital declined by nearly half. In times of recession, 

 medical needs are postponed or simply ignored because of the cost to the 

 individual. This is true because unemployed workers and their families have 

 no medical coverage in most cases. In addition, the population requiring 



