The mill board and management presented a downsizing plan to Tribal Council last week.
The plan—reducing the number of employees from about 115 to 85—is a short-term solution, lasting two years.
The idea after two years is to transform the mill into a more efficient operation, designed for the timber resources of the reservation.
The mill operation would lose about $320,000 this year, according to the Warm Springs Forest Products Industries estimate. The year 2016 “would be a break-even or better year,” said Doug Jacobson, WSFPI controller.
After downsizing, the mill would operate on a split shift, said John Katchia Jr., WSFPI chief executive officer. Working on a split shift means that one crew works all aspects of the milling process, he said.
Another aspect of the downsizing plan is to sell the whitewood logs off the reservation. Milling these logs is too costly at the WSFPI mill, Katchia said.
As another cost-saving measure, the mill employees are transferring to the tribal insurance program. The tribes are a self-insuring organization.
The allowable cut of reservation timber would be above the sustainable level for a few years, but then would average out to a sustainable level over 10 years.
An important part of the downsizing plan is coming up with a payment plan for the 2014 timber stumpage payments. The mill is a year behind on these payments, according to the Council discussion last week.
BIA Warm Springs Agency Superintendent John Halliday said federal law requires the agency to take account of this situation.
Federal regulations say the natural resources of the tribe must be sold at no less than fair market value, Halliday said.
The BIA, he said, cannot sign off any future timber sales until the Tribal Council is satisfied that the payments from WSFPI will be made.
Otherwise, the BIA is not carrying out the trust responsibility, Halliday said. A monthly payment plan would be a good idea, said Ken Borchert, from the BIA Regional office.
Council agreed that a team representing all parties should work on this agreement. The team includes Jacobson and Katchia from WSFPI; Mike Collins, tribal finance; and Bobby Brunoe, general manager of Branch of Natural Resources.
Borchert said he would research how the Yakama mill worked through a similar situation, and would be report back with this infromation. Tribal Council set March 3 for the next meeting with the WSFPI board.