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Show Il .r h IhteriDainD Park City, Utah 250 Vol. VI, No. 36 Thursday, May 28, 1981 2 Sections, 20 Pages Development problems The Noranda Mining Company laid off 155 workers last Friday, noting that the reduction was brought about by production revenues being outpaced by current costs. John Cesar, the area project manager, man-ager, said the company had been trying to develop the mine and produce from it at the same time.. But unexpected problems with excessive water and bad ground conditions slowed production, and made this two-fold approach economically unfeasible, he said. Cesar said the 65 percent reduction in the work force will allow the company to devote itself to development efforts to prepare the mine for resumed production. "No way are we shutting down," he said. The company was aiming to produce 1,000 tons of lead and zinc a day out of the mine in full development, Cesar said. Since the mine opened in 1979, the best mark it had set was 500 tons over one particular month period. But recently it had fallen to 300 tons a day. "The level of production couldn't sustain the operation," Cesar said. "We had to go to a development mode instead of a development-and-mining mode." Inadequate metal prices also played a role. "The prices were lower than we had forecast, but even if they had matched our predictions, our production produc-tion was still too low," Cesar said. The company received a little flak for not predicting their water and soil problems. One laid-off worker told a "Salt Lake Tribune" reporter, "They should have gone into development before they hired a full production crew." "I'm not going to argue with him," responded Cesar, "but basically it's Monday-morning quarterbacking." Noranda, he said, made the best judgment possible based on the limited information available to it. "There were areas of the.jnine that weren't even accessible to us," he added. "We had to resink the shaft." Admittedly, he said, the ground conditions turned out to be much worse than what had been predicted, based on studies of similar terrain. "Since February, we've been evaluating evaluat-ing which was the best way to go." "The company is putting out about $4.6 million bond Multipurpose ice arena: the cold facts In the next three issues. The Newspaper News-paper will be offering a closer look at the four projects that will appear on the ballot at the June IS general obligation bond election. This week, we examined the proposed $4.6 million multipurpose arena. Of the $8.4 million worth of projects proposed to be funded by a general obligation bond, the multipurpose arena is the largest and most expensive. As a result, it has caused the most skepticism among residents, who wonder how it will benefit them individually, and the community as a whole. Project Overview According to City Councilwoman Tina Lewis, the arena is proposed to be located east of the Snow Country condominiums on a piece of property the city hopes to purchase from Royal Street Land Company. That site was recommended because it is in close proximity to a piece of city-owned land east of the old Mount Air Market that would be used for parking. Arena patrons could park their cars then walk through a tunnel under the new state highway to the facility. As proposed, the arena would be about 32,000 square feet, or roughly the School Board okays short term notes No, they haven't sold the bonds. It might be more accurate to say that they've leased them. Faced with the fluctuations of a fickle bond market, the members of the Park City Board of Education chose on May 20 to postpone the sale of the school building bonds in favor of selling $5.81 million in bond anticipation notes. The notes, purchased at a rate of 9.5 percent, allow the district to borrow the needed cash on a short-term basis in the hope that the interest rates on long-term bonds will go down before March 1, 1983. Although the notes will not mature until that date, the board may exercise a "call option" to transfer the funds into long-term bonds at any point after $15 million now in development without getting a nickel in revenue back," said Cesar. It will work on deepening the main Ontario Mine shaft near Guardsman Guards-man Pass, building a new loading station and turning the 2,400-foot level into a main haulage route. Cesar also said that within two months, Noranda hopes to have tunnels pushing into Park City Consolidated Mine property, east of the Ontario Mine, with an eye towards diamond drilling. Cesar said the company decided which workers to lay off by reviewing "our long-term and short-term needs" and deciding what manpower was needed to insure the success of the project. One of those laid off was City Councilman Richard Martinez, who told The Newspaper he was out of work for the first time in 20 years. Martinez may not suffer money-wise he owns the Carbide Lamp restaurant but now it seems time sits heavy on his hands. "I don't know what the unemployed do," he mused. "I guess you go down to the restaurant and drink coffee along with the other unemployed." Before working for Noranda, he said, he'd worked for Park City Ventures for 20 years. The last 10 or 12 years were spent above the ground, managing the company shops. Martinez is philosophical about the lay-off. "It's the mining game," he said. "When the prices are good, the mines are going full-blaze. When you can't get nothing for the metal, or the metal's gone then you're gone! I've seen whole towns disappear because of that." Some hope does remain for the laid-off workers. Cesar said additional miners may be hired for work on the Park City Con mines. "If we contract the work out to Park City Con, we would anticipate certain individuals being hired," he said. "If we hire, we'll certainly be looking at our reduced labor." Cesar also said that other Noranda mines have contacted the workers about jobs. "We've had representatives here from the Black Bird Mine in Salmon, Idaho and the Lake Shore Mine in Casa Grande, Arizona. "We're not saying we got rid of a bunch of no-good people ! " size of the Holiday Village Mall north of Wolfes. The $4.6 million bond would pay for the construction of the arena and the parking area, plus all necessary equipment, including ice skates, a Zamboni ice cleaning machine, a stage, 1,000 chairs and tables, office furniture and a special floor to cover the ice. "We asked that every little thing down to the last pair of ice skates be budgeted into the cost," said Lewis. "We wanted to make sure that everything is included so that we wouldn't later be socked with an expense we hadn't planned for." Lewis estii..ated that if the arena bond passed, construction would take at least a year and a half. What would it be used for? The arena is proposed as a multipurpose multi-purpose facility. A full-sized ice rink would allow for hockey games and figure skating competition, as well as recreational skating. Bleacher seats surrounding the rink would provide viewing for up to 1,000 people. A special floor covering could be placed over the ice to accommodate convention meetings meet-ings and exhibits, and an acoustical design would allow concert performances. perfor-mances. Up to 1,500 more people could be seated in folding chairs on the arena floor. March 1, 1982. However, a decision to exercise the call option would cost the district as much as 3a of one percent in additional interest charges. According to District Treasurer Joann Vaughn, the money will be available June 26. The board plans to spend some of the money for property acquisition and construction of the new middle school, and to reinvest a sizeable amount until it is needed. The board voted to accept a bid from the Harris Trust and Savings Bank of Chicago. The decision was made after discussions with another investment firm, Boettscher and Company of Denver, and with David Wilson, the district's financial consultant. -t Pti" lMi 1 JvNiV -uM fit -t W'M le il f: i-'k if ",' I Ji--2'-M rfM 1 : 'it if H ; i i . 1-5 1 1 r ! f,i ) i "i! . i , ',11 V lis hi WmnW W U r -:- p ' fL 1 - " 1 -- - - ' Some mine workers may have been forced to hang it up for the last time after indefinite layoffs announced Friday. Spiro Tunnel Is city water project a costly pipe dream? New York City has its subway tunnels to nowhere. Now Park City may have a dead end tunnel of its own. The Spiro Tunnel pipeline, a $600,000 project designed to double the city's supply of culinary water, has run into some major legal obstacles which could leave the city high and dry. One model for the Park City facility was the Dobson Arena in Vail, Colorado. According to Recreation Director Pat Dodson, their arena has hosted national volleyball tournaments, soccer camps and tournaments, festivals, festi-vals, trade shows, graduation ceremonies, ceremon-ies, gambling nights, ice hockey camps, figure skating classes and competition, and 30 concerts. From June 1 through April, the arena is booked nearly every day for various functions, Dodson said. The typically slow month of May is reserved for maintenance. Dodson said that residents use the arena significantly more often than visitors. Residents must pay for the programs offered, but they may purchase a season pass for ice skating, or pay a lower daily rate than visitors. "There isn't anyone from the mayor to the city council to the citizens who is disappointed in the building," Dodson said. "In fact, they generally say, 'Boy, this is the best thing the town has ever done'." According to Lewis, an arena director would schedule events for the facility, with the hopes that the revenue generated would offset the yearly maintenance, plus allow the city to subsidize some programs. "The goal would be to produce enough revenue for the facility to pay for itself and to get it down to where the residents could skate free," Lewis said. What other costs are involved? Once an arena is constructed, a number of other costs must be considered into a yearly maintenance budget to keep it operating efficiently, including lighting, ice refrigeration, heat, cleaning and personnel. According to Vail Finance Director Bill Pyka, the Dobson Arena was constructed and improved over a four-year period for about $3 million. He estimated that it costs about $200,000 a year to operate the facility. Although the city expects to generate enough revenue from the arena this year to offset the maintenance costs, in past years the general fund has had to subsidize the budget with $60,000. Part of the reason for the shortfall can be attributed to less than agressive scheduling, Pyka said. But he added that the city has tended toward force mine layoffs Construction on the three-mile pipe began last fall and was reported to be 98 percent complete by the middle of May. However, objections voiced by mining companies and downstream water users threaten to block the flow of water for months or even years. The Spiro Tunnel, originally exca- providing programs for residents that make little money in lieu of scheduling money-making events, such as conventions conven-tions and concerts. Pyka noted that the Vail arena was financed through a general obligation bond that was backed by sales tax revenues rather than property taxes, as is proposed in Park City. He noted, however, that Vail has the benefit of collecting a four percent local sales tax, while Park City can collect but three quarters of one percent. He noted that residents approved the bond knowing that if sales tax revenues fell short that property taxes would have to rise to retire the bond. "In general, I'd say that arenas are not a money-maker," Pyka said. "But for us, it was something that we needed to augment the tourist and resident services in Vail. It was a finishing touch one of the things that make a town more successful." According to Councilwoman Lewis, her conversations with directors of Salt Lake's Bountiful and Cottonwood arenas indicate that their yearly maintenance costs are much lower, and that they, in fact, make money. Benefits to the community "As a board, we emphatically support the bond issue for the arena," said Convention and Visitors Bureau Director Debby Symonds. Symonds pointed out that the city currently can accommodate 8,000 visitors, but in the slow summer months, many condominium and hotel rooms are unoccupied. With an arena that could host large conventions, the off season could become ah on season, she predicted. "We need a public facility that all the property managers can use to book conventions, plus a facility that can hold such things as summer camps and other recreation programs," Symonds said. "Many people have argued that if a facility like this is built, it will encourage more development," she continued. "But this would really be a maintenance program that would help till the off season. Right now the city has convention space for 1,500 people, so up to 6,500 rooms are not filled in the Arena to 3 vated by mining interests and used later to house the Silver King Mine Train, runs several miles into the Wasatch Mountains from a point west of the Park City Municipal Golf Course. The flow of water collected by the tunnel has been estimated to be between six and 12 cubic feet per second. Ownership of the Spiro Tunnel water became the focus of a legal battle in the late 1960s between the United Park City Mines Company and Salt Lake City. Salt Lake attorneys argued that the mine tunnel penetrated the Big Cottonwood Basin, thus siphoning water that belonged to the city. The Utah Supreme Court upheld that argument, awarding Salt Lake City 60 percent of the water collected beyond the 6,600-foot mark inside the tunnel. When it became apparent in the mid-1970s that Park City would need another source of culinary water, an agreement was made to purchase the Salt Lake City water in the Spiro Tunnel. According to Ray Montgomery of the Salt Lake City attorney's office, Park City also agreed to file a change application with the state asking for permission to divert the water. However, while construction on the 12-inch pipeline began last year, the application was not filed until about two weeks ago. "They really didn't do their homework home-work when they went ahead with this thing," said Rex Larsen of the State Division of Water Rights. "It could develop into quite a can of worms." "Park City cannot divert any water under that change application until it is approved, and that could be some time down the road, if it is approved," Larsen said. He estimated it would take another four months to approve the application if no protests are filed. A protest to the state could add another two or three months, he said. "If it goes to court, your guess is as good as mine." One agency which plans to protest the change application is the Weber Basin Conservancy District. "Weber Basin will protest it, that's a certainty," said attorney Edwin Skeen. "And also we may file a suit to question Weather Enjoy it while you can, 'cause it won't last. Park City should experience a brief respite from the dreary wet weather which has besieged the area since the beginning of May. Expect to see some clearing on Thursday, with clear to partly-cloudy conditions on Friday and Saturday. Satur-day. Temperatures should climb into the mid-70s by Saturday Satur-day afternoon. That's the good news. The bad news is that showers are expected to swing back over Northern Utah Sunday and Monday, Mon-day, with ughs dropping back into the 55-to-60 degree range. the ownership of the water in the Spiro Tunnel." Skeen explained that the district's objection to the change application revolves around the 60-40 settlement between Salt Lake City and United Park City Mines. "We think the mining company and Salt Lake City were just dividing up our water," he said. "The Weber Basin Conservancy District contends that the water belongs to the Weber River, and Salt Lake City has no interest in it." Skeen contends that the lawsuit between the mining company and Salt Lake City neglected the interests of other claimants to the water, including Weber Basin. When asked how long he thought it could take to resolve the issue, Skeen answered with a familiar phrase. "Your guess is as good as mine," he said. As if one legal battle were not enough, Park City also has been contacted by at least two companies concerned about the impact of the pipeline on future mining operations. "We have concerns about the compatibility between mining and culinary water systems," said a spokesman for Silver King Mines Inc. "We're in a rather sensitive negotiation on the matter." He indicated that the mining companies compan-ies were not aware of the city's plans for a pipeline until about the time that construction began. Silver King was granted a permanent easement for use of the Spiro Tunnel in 1927. He maintained that reopening the mines served by the Spiro Tunnel was a "very real possibility." The Silver King spokesman said the major concerns revolved around potential poten-tial damage to the pipeline and pollution of the water. However, he conceded that the two projects could conceivably coexist. "It's possible," he said. "It's a high-risk situation, I guess, but it's possible." The Newspaper made repeated efforts Wednesday to obtain a response from a spokesman for the Park City Municipal Corporation, but without success. |