Former International Paper employee Valerie Young remembers hearing the news that the paper manufacturer in Courtland planned to cease operations.

The date was Sept. 11, 2013.

“When it first came out on the floor, we thought they were joking, but when I saw the look on our manager’s face I knew it wasn’t a joke,” said the 64-year-old retiree.

She's one of nearly 1,100 workers who lost high-paying jobs when Lawrence County’s largest employer ended operations five years ago this month.

The ramifications of the closure affected not just the displaced workers and their families, but was a brutal blow to the school system and the county and municipal governments who relied on IP for much of their revenue. Five years later, the financial effects of the plant's shutdown — which have thus far cost the school system and the county more than $1 million each — remain dire. 

And no wonder. The IP plant's annual payroll before it closed was $86 million.

While the schools, the county and several municipalities have managed to maintain most services on much leaner budgets, some local governments are struggling to cover basic expenses. Both the county government and the schools have fewer employees than they did five years ago and offer fewer programs and services.

“The general public doesn’t understand," said District 3 Commissioner Kyle Pankey. "People say the money is there. There’s not much more we can cut. This county doesn’t have the money to pave roads and do things it needs to do."

IP spokesman Tom Ryan said in an email last week the decision to permanently close the facility was driven by “demand decline for uncoated freesheet paper products in the United States.”

Plant records showed 318 of its 1,100 workers were Lawrence County residents at the time of the mill’s closure.

Young said she was more fortunate than most IP workers. IP transferred her to its Selma plant, where she was able to get the final year she needed to be eligible for 25-year retirement.

“A lot of people who worked there couldn’t move or IP didn’t have jobs for them,” she said. “Some people got jobs at plants in Decatur. Some took jobs paying a lot less doing whatever they could. I knew quite a few people who went from making more than $30 an hour to $12 an hour. I don’t know how they are able to make it."

IP helped most distressed workers find employment, Ryan said.

“About 70 percent of the 1,100 workers found alternate employment or elected to retire,” he said. He said 390 workers were interested in a transfer. “Nearly all received an offer,” he said. “And 150 job offers came as a direct result of job fairs we held.”

Young said she now draws Social Security, IP retirement and works part-time as a substitute teacher in the Lawrence County school system.

“If the plant didn’t close I’d still be out there working, but when it closed I knew another plant wasn’t going to hire me at my age,” she said. “I am blessed. My home is paid off, my children are grown.

"My mom taught me to save up for a rainy day. It’s been a stormy day.”

For county officials, post-IP governance has been a constant challenge. The Lawrence County Commission's revenue from property tax collections and Tennessee Valley Authority in-lieu-of-tax payments collectively have fallen by more than $1.1 million annually, tax records show. A decline in TVA payments is partially a result of lower industrial power use in the county since IP closed. Property tax collections fell as the closed plant's value decreased and its equipment was removed.

The commission dealt with some of the revenue losses with cuts in personnel and services. In 2012, the county employed 176 workers. In 2018, the county had 158 workers on its payroll and 19 of those were in the solid waste department that wasn’t part of the county system in 2012. Effectively, the county has trimmed 21 percent of its workforce.

The cutbacks didn't end there. County employees haven’t had pay hikes since 2012, and are taking home less pay because health insurance premiums and the retirement match have increased. The department overseeing the county transportation system was eliminated, and senior centers in the Aging Department must now engage in fundraising activities to make up for limited county funding. 

District 2 Commissioner Norman Pool said not all of the commission’s efforts to cut expenses were successful.

“The commission had to create ways to save money,” he said. “Closing the courthouse Thursdays and Fridays didn’t work. That move probably cost the county money. ... The general fund was cut 45 percent in fiscal '15. … Having good (administrators) Donna Llewellyn and Heather Dyar both working together is how we survived. Also, the commission learned to say no."

Former Sheriff Gene Mitchell said the 45 percent budget cut cost his department three arresting officers and a drug task force agent.

"We went from five to four drug task agents and nine to six deputies," Mitchell recalled. "Sometimes, we pulled an investigator off his duties to help patrol during the high traffic hours. I told the administrators we were not going to cut back on answering calls. ... The budget cut definitely slowed down the investigating process, and some duties got shifted throughout the department."

Efforts to raise taxes to maintain county services since IP closed have been rejected, with county residents voting down proposed hikes in sales tax and property tax.

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'Uncharted waters'

District 4 Commissioner Bobby Burch said the commission was near finalizing the fiscal 2014 budget when IP announced it was closing.

“We scrambled trying to find an area and/or county which had a similar experience, but we quickly realized that we were on uncharted waters,” he said. “It simply wasn't possible to project what our future monthly loss of revenues would be, but we knew that cuts were inevitable and that's where we started."

He said the commission began to stabilize its finances by holding monthly budget meetings with each department head.

Dyar, now the county administrator, said one example of cost-cutting occurred in 2014, when the transportation system was costing the general fund about $500,000 annually. “The commission voted to cut salaries and employees in that department," she said, and the North-central Alabama Regional Council of Governments agency took over the county bus service.

Robby Cantrell, NARCOG director of transportation, said Lawrence County now pays about $50,000 annually in local matching funds for its service. He said the riders' fares pay about 10 percent of his department's budget with the remaining money coming from federal transit funding. 

"That has been a significant savings for the Lawrence County Commission's general fund," Cantrell said.

Dyar said county employees' hours were temporarily slashed from 40 to 32 hours.

“As of right now, we are living paycheck to paycheck. This county has got to have new revenue. … We have to live within our means to survive,” she said. 

Pankey, elected to the commission last year, felt the impact of IP's closure firsthand. He worked in shipping at the massive plant for 34 years. His last day at work was June 1, 2014, after his department helped finish getting the plant ready to sit idle.

The following month, Pankey’s wife died.

“With my (IP) retirement and Social Security, it took me a month to make what I was making in a week there,” he said. He now works as an ambulance driver and commissioner to help pay the bills.

Pankey has proposed to fellow commissioners that the county sell off some more property and help the Industrial Development Board attract industry to the county.

The IDB announced two weeks ago 35 labor jobs paying about $50,000 a year could be coming to a company planning to expand in the Mallard Fox West Industrial Park along Alabama 20.

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Schools

Superintendent Jon Bret Smith said Lawrence County Schools continues to watch every penny and is encouraged the economy is picking up.

The school system's sales tax revenue initially fell about $800,000 following IP's closure and was still down more than $525,000 in fiscal 2018. According to school records, in fiscal 2013, the system received $5.07 million vs. $4.27 million in fiscal 2015 from sales tax. The 2018 total was up to $4.55 million.

Ad valorem taxes for the system fell from $2.98 million in fiscal 2014 to $2.51 million in fiscal 2017. The school system’s allocation from TVA in-lieu-of-tax money dropped from $619,608 in 2013 to $285,657 in 2018.

Smith said because IP closed, locally funded teacher units are down from 25 to eight, and capital improvement projects — such as an expansion of Hatton Elementary and replacement of aging Moulton Elementary — have been put on hold.

“It’s millions of dollars when you talk about the totality of it," Smith said of the unrealized funds. "Local teaching units, repairing instead of patching, more programs for our kids. It would be nice to have those things.”

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Towns

Courtland and North Courtland, which financially benefited from their proximity to the plant, are now in dire financial straits.

Courtland Councilman Farrell Hutto said the town presently employs about six people. According to an audit, Courtland employed 12 full-time and three part-time workers in 1998 and received $804,000 in lieu of taxes from the paper mill.

Mayor Clarence Logston cut his salary and all but one council member agreed to give up the $150-a-meeting pay they were receiving.

Former North Courtland Mayor Ronald Jones, who left office in 2016, remembers seeing a drastic decrease in sales tax revenue from Sivley Food and Fuel store, better known as RKM, at Alabama 20 and Lawrence County 150.

“Everyone in town was directly affected, either through losing a job or a financial spiral the town was in after IP closed,” Jones said. “We were already struggling and have been since we incorporated in the 1980s. RKM was our largest revenue generator.”

“We lost maybe 70 to 80 percent of our income when IP closed," Jones said. "Some of our employees didn’t get paid for two or three months. We had to wait on the TVA check to come in or ad valorem tax to be paid.”

In 2016, Jones said he was forced to take police vehicles out of service because there was no money for insurance.

“I couldn’t allow officers to drive the cars," he said. "If something happened, we would have been sued and in a much bigger mess."

Current Mayor Riely Evans Sr., who worked at IP for five years and lost his job when it shut down, said the town still struggles, but the residents are adjusting. “We’re surviving,” he said. “We don’t owe any money, and everybody is getting paid on time.”

Evans said IP offered him a position at its Prattville plant but he wanted to stay in north Alabama.

After IP closed, Sivley Food and Fuel eliminated its third shift and about six workers, said District Manager Scott Maxwell. He said they went from being open 24 hours a day to 18 hours.

“The closure hurt diesel fuel sales about 50 percent, and the deli sales are down about 30 to 40 percent,” Maxwell said.

Assistant store manager Yolanda Young said about 400 trucks stopped in daily during the plant’s heyday.

“Everybody who comes in here is like family," she said. "The family just got a little smaller. We’ll survive by the grace of God.”

Five years after IP's closure, Pankey said the county is still working to get back on its feet.

“(IP) did what they had to do,” he said. “Lawrence County was living before IP closed, and Lawrence County is still living."

mike.wetzel@decaturdaily.com or 256-340-2442. Twitter @DD_Wetzel.

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