Thomas Marking stated that he is preparing his McKinleyville Community Services District board for a potential 30% increase to water customers if the pulp mill does not come to a resolution with the Humboldt Bay Municipal Water District for a long term contract.
Samoa Acquisition Corporation (SAC) head, Robert Simpson, presented a check to the water board and said he had come to a temporary lease agreement with the district that was to be finalized today. SAC is prepared to pay $21,230 per month until April 30. On May 1st, a new long term agreement is supposed to be in place, or another short term agreement might take place. If the water district does not make concessions, SAC is prepared to put a plug at the end of the outfall line until they are prepared to start the mill. Mr. Simpson's feels it is unfair to charge full price before the pulp mill is generating any revenue. He also made it clear that he does not have a definite timeline when the mill could be restarted, because of economic situations beyond his control. One example he gave was the situation with Southcoast Lumber. Their mill relies on the pulp mill buying residual chips to the tune of 4 million dollars a year, and are currently running only 1 week a month, with their chippers completely shut down. (Marking pointed out that each job lost at the pulp mill affects 6 workers down the line in the economy, or 1,200 workers.)
Director Bruce Rupp was adamant that he wants to see the pulp mill be successful, and that was the consensus with the rest of the water board.
Bob Simpson said that it will take a credit line of 50 million dollars to start the mill.
The U.S. Environmental Protection Agency will have to be dealt with, concerning the limits of Biochemical oxygen demand (BOD's) discharge into the ocean. The first hurdle will be a California Regional Water Quality Control Board North Coast Region Meeting in Santa Rosa on March 12th.
Assuming the facts that water costs run the pulp mill 1% to 2% of the cost to run the mill, and the water bill runs about $150,000 per month, the costs to run the plant is around 180 million to 360 million a year. That means the pulp mill would have to average 600 ton a day and pulp would have to be selling for $825 a ton to make a profit at the low number.
No banks are financing this project. There are 3 main stakeholders. Don Nolan from Fortuna has been identified as one.
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