524 



has been a lot of discussion about the 50-year contracts that 

 were a critical key to attracting industry. The contracts now 

 have 17 and 20 years respectively to run. The 50-year contracts 

 were necessary to secure financing for the multi-million dollar 

 investments in the two pulp mills in Southeast. AWIT believes 

 these contracts should be honored. 



In the case of Sitka specifically, let me highlight some 

 economic impacts that would come about should the timber base 

 be further eroded and the Sitka pulp mill closed: 



o Alaska Pulp Corporation accounts for 27.4% ($1,674,000 in 

 1986) of all electrical utility revenue to the City and Borough 

 of Sitka. They also pay nearly one-fourth of the municipal water 

 revenue ($100,000 in 1986). Should the mill close, the next day 

 utility rate increases would be a minimum of 23%. 



o About one-fifth of all Sitka property tax revenue is 

 derived directly from APC ($211,495 in 1986). Not included are 

 property tax payments of households of the 23.4% of all area 

 employees attributable to Alaska Pulp Corporation. 



o Alaska Pulp Corporation, its employees, and the pulp 

 mill's support labor force spent an estimated $30 million in 

 Sitka on goods and services during 1986. 



o One seafood processing plant owner (there are two 

 processing plants in Sitka) has stated he would not be able to 

 afford the excess utility and property tax rates and would not be 

 able to remain in business. 



o Not counting the Forest Service payroll, the economic 

 downturn from loss of payroll attributable to forest products 



