Statesman Journal from Salem, Oregon • Page 4

almanac2 financial 4-6 Statesman-Journal, Wednesday, June 23, 1982 Ljj Economist cites housing decline in Salem area i TO talesman-Journal photo by Jill Cannefax Maiden voyage foam. Long tow lines permitted the girls to prove their ships seaworthy without the risk of getting even a toe wet. The daughters of Mr. and Mrs. Dennis Ander- son were in Salem to visit their grandparents, Mr.

and Mrs. William Krauss. The Andersons lived in Salem before moving to Alaska. -Kiersten Anderson, 7, and her sister Kathryn, 5, promenade along a pool at the "Salem Civic Center Tuesday with boats "they constructed Monday from Styro- Recovery from the housing construction slump will be slowed because local construction workers have left the area, he said. The two counties, which are designated as the Salem area in Weber's statistics, in recent years have required 3,000 units a year of new housing for new arrivals, he said.

Local construction will not reach that level until 1983 or 1984, he said. "I feel certain that within a few years we will have some of the strongest housing years we have ever had to make up for the current slump," Weber said. Meanwhile, the state Housing Division said the number of housing permits issued in Oregon fell drastically in May. Division spokesman Mike Murphy said 462 permits were issued last month, compared to 708 in April. In May 1981, a total of 1,103 residential permits were issued.

Two years ago, the figure for that month was 3,295, he said. Only 99 multifamily housing permits were issued last month. Murphy said. Recent population figures show that Marion and Polk counties increased at more than twice the statewide rate between July 1980 and July 1981. But the rate of growth in the two counties was slower than in the 1970s.

By MARTIN ROSENBERG Of the Statesman-Journal Single-family home construction in Marion and Polk counties from April through June declined about 69 percent from two years ago, according to a Portland economist. Over the same time, construction of multifamily units dropped 35 percent, said Fred Weber consultant for the National Association of Home Builders in Salem. He said homebuilders will complete 132 homes in Marion and Polk counties from April through June, the lowest level since at least 1965. During the same months, 426 single-family homes were completed in 1980 and 287 were built last year. The number of multifamily units built in April through June stood at 48, down from 74 for the same period in 1980.

Weber, who compiles the figures from electric utility home connection records, predicted that 1,104 single- and multifamily units will be built in the two-county area in 1982, down 76.3 percent since 1978. "While I'm sure that other areas of Oregon have had far greater declines, that is still a disastrous situation for Salem," Weber said in a press release. The economist said the construction decline is tied to high interest rates, which should fall in the second half of this year. Breaks dump sewage into and leave no lasting effect. Charter boat operators in Depoe Bay expressed concern about odor from the spill, but Broad said that would be the only noticeable problem.

Farther south, another ruptured pipeline caused the release of 100 gallons of raw sewage a minute into the ocean from a pumping station in Agate Beach Tuesday afternoon. Solid waste was running into a small creek and across the beach to the ocean. However, Broad said, he had been told by Vance Avery, Newport treat-ment plant supervisor, that the spill was contained and the broken pipeline could be repaired by Tuesday evening. By sara robins For the Statesman-Journal NEWPORT Broken pipelines at sewage pumping stations in two of Lincoln County Tuesday caused several hundred thousand gallons of untreated waste to be dumped into the Pacific Ocean at Depoe Bay and Agate Beach. small pumping station near the boat docks in Depoe Bay was flooded Monday afternoon with nine feet of watecirom a ruptured line, said Jim Barker, sewage treatment plant supervisor.

The electrical equipment used to pump the raw sewage over a hill two miles to the treatment plant shorted out, resulting in the release of about 250,000 gallons of waste by Tuesday afternoon. School board drops administrative raises Bustransfer travels unsure road It: ByDANPOSTREL Of the Statesman-Journal The Salem Area Transit District is supposed to take sole responsibility for providing local bus service July 1. But first it needs some buses. -The city of Salem, which now runs the transit system, has 58 of them along with drivers, mechanics, tools and, everything else that goes with the bus business. Since the transit district began operating a year ago, it has paid the city to tend to the everyday chores involved with keeping buses on the streets.

Now, with the scheduled passing of the transit baton less than two weeks away, the two jurisdictions areatodds over how the city's transit equipment and workers should be to the district. Straddling the issue are John Carney and Jim Rabe, city council members who also serve on the transit SoardT JM disagreement was sharp JiOpgh Monday to prompt Carney to Along with these assets go about 95 drivers and other workers, who have accrued nearly $284,000 worth of vacation, holiday, sick leave and compensatory time. Furthermore, if voter rejection June 29 of a transit district tax levy forces a July 1 shutdown of bus service, these workers would be owed unemployment benefits that could top $657,000. The unemployment costs would be lower if the workers were jobless for just a few weeks if, for example, voters followed a June 29 transit levy rejection with approval at an August election. The city expects the transit district to inherit these liabilities along with the system's assets.

The city also expects the district to pick up the tab for any judgments transit workers might win in labor grievances. Among other things, that means whatever money a former employee may win in a Sl-million racial-discrimination suit. City officials say the employee has filed a labor contract grievance, a state unemployment compensation claim and a complaint with the state Bureau of Labor and has lost in all three arenas. The case is now in federal court. The city has made some good management decisions in building the bus system and obtaining state and federal funds, city officials say, and the transit district should take the bad with the good.

ocean Avery could not be reached for comment. Broad said Avery told him solid chlorine was put into the creek where it ran out onto the beach and warning signs were posted to keep people away from the affected area. Chlorine disinfects fecal bacteria in the raw sewage, said Broad. He described the use of chlorine as "effective but not as effective as it would be if it went through the sewage treatment plant." Excessive amounts of chlorine affect fish, but short-term use in conjunction with a major tidal flux has a limited effect, he said. "Failures occur," Broad said of the spills.

"We don't like them to occur but they do occur. This one we believe will have no lasting impact." That's the position the city council took and ordered Carney and Rabe to vote for as transit board members. If the transit district refuses those terms, the council decided, the city should retain the transit equipment and offer to continue the current contractual relationship. When Carney resisted the idea, Mayor Kent Aldrich suggested that he be absent when the transit board votes on the matter. "I assure you that I will be," Carney said.

District officials say they can only afford to accept city liabilities they could cover by selling off the city's S766.300 share of the transit equipment. City manager Ralph Hanley said he expected the assets, along with cash reserves he said the district has, to cover the liabilities. But Carney said that at worst, paying all the city's liabilities could put the district under a financial burden hundreds of thousands of dollars greater than the market value of the city's share of the assets. Ed Zajonc, transit district president, told the council the district has no cash reserves it could use to pay liabilities. And he said the district is particularly insistent about not paying money workers might win in grievances against city management practices.

Turn to TRANSIT, Page 3B. 7 jtf HARVEY BONES JOYCE SPRAGUE mills recover. Otherwise, all the government will inherit is rusting scrap iron from once-productive mills, they said. Mill operators contracted to buy timber at high prices because the government In the late 1970s said the country was facing a housing boom, Sprague said. Bones said the mills now have two choices: Cut the timber and go bankrupt paying for it.

Default on the contracts, let the government resell the timber at lower prices and pay the difference. rYi Barker said the line apparently ruptured about 3:30 p.m. Monday. Employees noticed the drop in flow at the plant and by 4 p.m., the building was flooded, he said. The solid waste is being treated with chlorine, which kills a certain percentage of bacteria, and should pose no serious threat to the local environment, said Barker.

Depoe Bay Coast Guard personnel posted signs around the area, warning of the spill. Jim Broad, regional supervisor of the state Department of Environmental Quality in Portland, said the spill was "not that significant in terms of environmental impact." He said the flushing motion of strong tidal action in the tiny bay should dilute and remove the waste qujckly refuse to support the council's position when he functions as a transit board member. Rather than toe the council line, he said, he would stay away when the transit board decides how to handle the issue. The argument is a matter of assets and liabilities. The city, long eager to disengage itself from the bus business, is more than willing to unburden itself of its transit equipment, right down to the tire chains and coin changers.

City officials say the value of these assets is about $2.7 million, of which the city's portion is about $766,300, The remaining assets were purchased with state and federal funds, and although they apparently can be transferred to the district, they're actually state and federal property. Also available for transfer is about $200,000 in cash money left over from district payments to the city for bus service over the past year, city officials say. opening the library doors on Mondays, should the levy pass next Tuesday. If the levy fails, though, the hole in the library budget will exceed $200,000. A library assistant would be laid off.

Two vacant positions would be eliminated and other portions of the budget also would shrink. And the library would remain closed Mondays. The Monday opening question does not affect the library's longstanding practice of closing on Sundays during the summer. That's common among libraries. George Happ, city library director and a member of the regional service's board, said the council's $20,000 offer gives the levy proposal a shot in the arm.

"We've got something tangible that city residents can hang on to as a reason for getting it passed," he said. The city's vote generally carries the regional library levies, although the May proposal lost everywhere, Happ said. Next Tuesday's proposal carries an estimated tax rate of 6.6 cents per $1,000 of assessed property value, a slight increase from the current 6 cents. If the levy passes, the owner of a house assessed at $50,000 would pay $3.30 next year for the regional library service. Levy would provide W-day library service proposed by Superintendent Bill Kendrick in his budget message.

Kendrick originally proposed cutting the community school budget by $151,050. But the budget committee and board made a number of changes before Tuesday night's action, which matched Kendrick's original proposal. The board also approved a significant change in the model of community schools for Salem. Currently, community schools are in 16 of the district's 37 elementary schools. Those community schools are designed to aid surrounding neighborhoods.

But many have opposed the current model because the community schools tend to get more services than other elementary schools. Community schools offer programs for all citizens, including elementary and secondary students. The model approved Tuesday night was developed by a task force, which worked five nights a week for two consecutive weeks. It proposes two significant changes, according to school officials: It deals with $151,000 in cuts. It creates eight regional community schools with 20 half-time aides in other elementary schools.

That means 28 of 37 elementary schools have a community school employee directly involved. The remaining schools will be served by the regional coordinators. The board meeting Tuesday represented the final appearance of Grace Thorp, who is leaving the board after eight years of service. As a final gesture, Thorp supplied each board member with a first aid kit for the "summer of 1982, which could be the longest, hottest one ever for the Salem School Board." ber has been sold in California and half in the East, but the market in the East has dried up, Bones said. Mountain Fir cannot compete with Canadian mills for a share of the California market because the Canadian government will subsidize the cost of federal timber to bolster employment, he said.

But domestic lumber manufacturers expect to become more competitive with the Canadians. The U.S. Forest Service has decided to index the price of raw timber stumpage to the market prices of milled lumber products, Bones said. Canada uses a similar method. Mountain Fir now exports less than 1 percent of Its lumber.

But the company in November completed a $4.5 million mill in Maupin that can cut for export, Bones said. The decision to build the mill, made 24 years ago, was forced by the changing mix of lumber species available for mills in the region, he said. By JOHN FUREY Of the Statesman-Journal It won't show up on the ballot next week. But the Salem School Board cut administrators' pay raises for 1982-83 and pledged Tuesday night to reduce a proposed tax levy by about $200,000 with the money saved. The board moved Tuesday to eliminate a proposed 6 percent pay raise for administrators, who earlier this year had their pay raises reduced from 9 percent.

Some administrators, however, would receive raises based on length of experience. The board cited financial difficulties in the local community in voting for the cuts. It also said the money saved, estimated to be about $200,000, would be cut from the current $47-million tax levy proposal. Voters next Tuesday will be asked to authorize $39.9 million of that, but it is too late to change the current ballot. However, the board has the right to reduce a levy approved by voters.

Before the $200,000 cut, the proposed levy represented about a 15 percent increase in school taxes. It would help fund a budget, an 8.3 percent increase from the current $66 million. The board last week asked unions representing teachers and support personnel to renegotiate 12-percent pay raises for their employee groups. But both unions turned down the request. The 110 administrators covered in next year's budget are not represented by a union.

In other action, the board restored about $39,000 previously cut from the community school program. The proposed funds for community schools would be $363,794, the amount Either choice would be devastating, Bones said. In the late 1970s, timber companies were contracting to buy Douglas fir for as much as $400 per thousand board feet four times the current value of the timber, Bones said. Thirty years ago, the price was $16 per thousand board feet. Bones said that Mountain Fir, with conservative management, has 300 million board feet under contract with the federal government, its sole supplier.

He declined to give the value of the contracts. Mountain Fir has 348 employees at five Oregon mills, down 45 from peak employment in 1978. The 30-year-old, privately held Salem company had gross sales of more than $60 million in each of the past two years, Bones said. Among companies employing fewer than SCO persons, It is the nation's largest producer of softwood lumber, Bones said. About half of the company's lum Lumberman details predicament Congress must save mills by spring By DAN POSTREL Of the Statesman-Journal Salem's chance to have its public rjbrary open seven days a week for thefirst time since 1979 hinges on voter-approval next Tuesday of a Chemeketa Cooperative Regional -Ubrary Service tax levy.

ThT regional service, serving Mar-ionPolk and Yamhill counties and part of Linn County, ties together 17 libraries and extends their services residents. payments for out-of-town library cards and other programs, the regional library service supplies percent of the city library's yearly budget, which tops $1 million. Tinkering with the city's budget for the fiscal year beginning July 1, the Salem budget committee in May raised overdue fines enough to finance-Monday library operation. But defeat of a three-year regional library service levy proposal later In May squelched that plan. that defeat, the regional service board pared its request by 17 percent and switched to a I single-year levy.

reduction of regional service payments to Salem leaves a gap in the city library's budget of about $20,000, the approximate price of Monday operations. But this week, on a suggestion from member Roger Gertenrich, the city council agreed to patch that gap, Forester's view; 7C. By MARTIN ROSENBERG 01 the Statesman-Journal Congress has until next spring to decide the future of federal timber contracts that threaten independent mills in the Pacific Northwest, according to Harvey Bones, president of Mountain Fir Lumber Co. Inc. Many mills, holding contracts to buy federal timber at ruinously high prices, have extensions that will last until about next April, Bones said.

Congress is considering proposals that would terminate those contracts, signed In times of high inflation. "There is not one operation, large or small, that has timber under contract that is not in trouble," he said. Bones and Joyce Sprague, secretary-treasurer of the company, were guests at a Statesman-Journal Newsmakers' Luncheon Tuesday. They said the government caused their plight and should now help the.