The Sandow 5 lignite-fired power generating station is in the final stages of construction and soon will be moving into a multi-month testing phase during which electricity will be made.
Once testing is finished - a step scheduled to occur in mid-year - Luminant will deem the power plant operational with a workforce for Sandow 4 and 5 of about 185 employees, spokeswoman Ashley Monts said.
“We’ve already hired more than 50 new employees, which virtually completes staffing for Sandow 5,” Ms. Monts said.
Currently there are two openings - an environmental technician position and an engineer position. Luminant has hired about 20 former Alcoa employees to work at Sandow, Three Oaks Mine and power plants at Oak Grove and Kosse.
Average pay for Sandow 4 employees is in the upper $60,000 range, she said.
Luminant paid $7.4 million in 2008 property taxes to Milam County and Rockdale, Thorndale and Lexington school districts. The Milam County Appraisal District will not release 2009 taxable values for Alcoa and Luminant’s Sandow 5 power plant until late April or early May, Chief Appraiser Patricia J. Moraw said.
An influx of workers - including a majority that bivouacked in RV parks - boosted Rockdale’s sales tax rebates from about a half million to three-quarter million dollars last year.
For the first three reporting months in 2009, Rockdale already has received $205,683. Milam County, likewise, saw sales tax rebates of $340,445 in the first three months of this year.
Bechtel Power Corp., hired by Luminant to build the $890 million two-boiler electricity plant, paid its employees $65.5 million in 2007, $83.5 million in 2008, and for the remainder of the construction is expected to pay workers $6.3 million.
Luminant projected that the power plant project would pour more than $1.1 billion in economic benefits to Milam County based on a calculation of the number of times a dollar is expected to be spent through the regional economy.
Meanwhile, Milam County, particularly Rockdale, has not seen the full brunt of the economic impact of Alcoa’s shutdown of its aluminum smelter and carbon plant because many of the more than 1,000 employees who lost their jobs last year qualified for unemployment benefits and supplemental unemployment benefits.
When the unemployment benefits expire, the full impact will become visible, Mayor John Shoemake said.
Further, city officials do not know at this point how many former Alcoa employees moved away to other jobs, he said. Alcoa was Milam County’s largest employer since the mid-1950s, and until production curtailments began last summer, had a workforce of 1,100. Today, only the atomizer plant, which manufactures aluminum power used in such products as space shuttle fuel, paint and cosmetics, is operational at the Alcoa plant near Rockdale. Between 60 and 80 employees will be Alcoa employees at Rockdale when layoffs are completed.
Shoemake, mayor of this Central Texas municipality of more than 5,600 residents, said city officials are reviewing past sales tax rebate reports to before Sandow 5 construction began to “give us a better handle on what we can anticipate in the future. We know sales tax has been raised significantly from their presence here for about three years.”
Rockdale Chamber of Commerce President Denice Doss said, “Right now Rockdale is doing fairly well because we still have the construction workers in town. The businesses are starting to feel a bit of a downturn, but as far as I know everyone is hanging on. The city is working on developing a municipal district, which will help us with economic development if it passes in the election in May.”
The startup of Sandow 5 “won’t help that much with the economy because it only employs around 60 or so employees and they are here already,” Mrs. Doss said. “So right now we are just in holding pattern and working on what to do to bring new business in to town.”
But, Shoemake said the new power plant, which is outside of Rockdale, is anticipated as a “positive” economically. Though the city will not receive ad valorem tax revenue from the plant, it will reap financial rewards from money spent by Luminant employees who make Rockdale their home or patronize Rockdale businesses.
Meanwhile, city leaders are aggressively involved in recovery efforts, ranging from a proposed half-cent sales tax levy for economic development to bring in businesses, to the more standard strategy of sprucing up the town to make it more attractive to potential companies, Shoemake said.
“We are doing everything we can to try to bring some kind of hope back to the community,” Shoemake said.
Milam County Judge Frank Summers said there is no doubt Sandow 5 will help offset the economic downturn from the Alcoa shutdown.
“However, I can’t really do anything but guess at this point because I do not know how much value we are going to lose due to the shutdown of the smelter,” Summers said.
The county judge said he has been told the new power plant is worth $600 million. About $100 million will be tax exempt because of pollution controls, leaving close to $500 million on the tax rolls, Summers said.
Meanwhile, the county’s 2009-10 budget planning will include projections on declining sales tax revenue that will affect finances in the last six months of the year.
Whether the books will balance between the new plant and the Alcoa shutdown will not be visible until numbers are released by the Milam County Appraisal District on “how much they devalue the smelter and carbon plant … both will still be there, just will not be in production,” Summers said.
