PALMER -- A moratorium on Matanuska-Susitna Borough timber sales is having a direct effect on wood-chipping business NPI LLC, the primary user of the borough's Port MacKenzie.
"We know that the moratorium is having a huge impact on our operation," NPI marketing manager Ron Arvin explained to the borough Assembly on Tuesday. "We also know that, subsequent to your implementing this moratorium, there's been a de facto, boroughwide moratorium on."
The Assembly halted timber sales on borough land two years ago, after residents in the Montana Creek area complained about wood-chipping activities there. Residents said truck drivers sped on local roads, the company did not adequately maintain the roads it used and lights and noise from the chipping operation disrupted residents around the clock.
Without access to borough timber, NPI's business has slowed, Arvin said, and the borough is losing money, too. Fewer ships hauling wood chips means less money in wharfage and docking fees at Port MacKenzie, he said.
"Your 2005-2006 budget had an estimate of $1.6 million," Arvin said. "It got reduced to $450,000. I can see why that happened. There's not a lot going on out there. We're here to do our part. I think if we can do that, we will see revenues in excess of a million dollars."
Assembly members aren't ready to lift the timber moratorium. New timber- harvesting rules have been crafted to address noise, traffic and lighting issues. The Assembly has postponed discussion on the rules several times since October to gather more information about borough timber resources.
Tuesday, the Assembly met for an afternoon work session on timber.
"I asked for this because I needed to know what the value of the timber industry was and how it related to the income of the port beyond what's on the balance sheet. I don't feel like I've really gotten there yet," Assemblywoman Cindy Bettine said.
Assemblyman Tom Kluberton, from the Sunshine community near Talkeetna, said the effect of logging on residential and tourism markets weighs heaviest in his mind. He wants to know whether the company's investment in the local economy outweighs potential lost revenue from tourism and lost residential-lot sales.
Last month, the Assembly approved an exception to the moratorium, a 230-acre timber sale at the corner of Point MacKenzie and Alsop roads, where the borough plans to build a medium- security prison. The sale fell flat late last week with no bidders.
Mat-Su community development director Ron Swanson said Wednesday a number of factors derailed the sale: rotting and old timber, a narrow, two-month logging window and a requirement that contractors pay premium wages to workers.
Swanson said he appealed to the state Department of Labor to waive a requirement that loggers pay Davis-Bacon wages. The premium wages are required whenever work is done related to public facilities, he said.
Swanson said he also hopes to give would-be loggers more time to cut trees. The sale cited an April 30 deadline for logging, but dirt work for prison construction might not begin until as late as August, he said.
If contractors still don't like the sale, Swanson said, the borough might open the land to public cutting to avoid wasting trees.
"We don't want to see them plowed under into a berm," Swanson said.
Tuesday evening, the Assembly postponed discussion on timber rules until Feb. 20. If adopted, the rules will not specifically lift the timber-sale moratorium.
Arvin, at a break in the Tuesday meeting, said he hoped the Assembly would adopt the new rules and lift the moratorium. He said he is unsure how the rules will affect NPI's operation but said the company prefers the new rules to a moratorium.
The borough and NPI are partners at Port MacKenzie, Arvin said. NPI invested $3 million in the borough's $13 million deep-water dock so it could ship chips to South Korea and Japan. It also retains the exclusive right to load natural resources onto other ships, using its conveyor system and charging a fee for use.
The company plans to expand its shipping operations to include those other commodities, Arvin said, but it can't without the capital from wood chip sales.
"We have an expectation that the borough would make some of its timber available," Arvin said.
"If not for that wood-chipping operation, NPI would not have invested in the dock. We would not be here today. Those other industries (NPI plans to expand into) rely on that being there. It was the wood-chip business which allowed the rest to make economic sense."
Daily News reporter Rindi White can be reached at rwhite@adn.com or 352-6709.
