Dotiki

Normally when an employer shuts down its operation, the public concern is for the jobs of the workers, but in the case of Dotiki Mine, which will shut down Friday after 52 years in business, that isn't the case. According to sources within Alliance Resource Partners LLC (ARLP), all employees of Dotiki are being offered the chance to transfer to one of the company's other mines.

What Webster County residents and officials have to concern themselves with is the impact the closure will have on the local economy.

"Without a doubt the closing of Dotiki is a blow to our community and our region.," said State Representative Jim Gooch. "While Alliance has assured us that miners will have the option of transferring to other mines, it will be extremely difficult to see this iconic, 50-year-old mine shuttered. I am committed to working with the miners, as well as state and

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local officials, to deal with the repercussions of Dotiki's closing. After all, how we deal with this will determine how successful our community will be moving forward."

According to a King University School of Business study published in February of 2013, every coal mining job supports 1.27 jobs in other sectors. That means a loss of 100 jobs would result in the loss of 127 additional jobs in the local economy, for a total of 227 jobs. These would include truck drivers, contractors, part suppliers, fabricators and even the workers who fill the vending machines at the mine bath house.

The slowdown in mine production over the last four or five years has seen several local fabrication shops and trucking companies go out of business, while others have had to struggle finding work outside of the mining sector.

But the impact will stretch further than that. Not only will it affect the business tied closely together with the mines, this closure will also touch the local businesses in which miners spend their wages.

"The people who are going to hurt the most are the businesses around here and the tax payers," said magistrate Tony Felker, who spent 21 and a half years at the mine. "The miners are going to go somewhere else to work. But they wont be driving by McDonalds on their way to work in Webster County to pick up a sausage biscuit. They wont stop and buy gas on their way to work. This is something that is going to affect our entire county."

Judge Executive Steve Henry echoed that sentiment.

"My concern is for the impact it will have on our locally owned stores and gas stations," Henry said. "The places that not just the local miners shop, but the ones who come in from out of the county."

The impact of Dotiki's closure wont stop in just the commercial sector, the county government will also be affected by this change.

According to Webster County PVA Jeff Kelley, ARLP pays roughly $700,000 in property taxes to the county every year. That number includes not just the taxes on the land itself, but on all of the permanent structures and mining equipment the company has at the mine.

When factoring in the equipment owned by outside contractors that is used on the property, Kelley says the financial impact of the mine could reach over one million dollars.

While ARLP will still pay taxes on the land and structures it owns, the halt in active mining will result in a loss of around $78,000 in revenue to the county's general fund.

The county will also see a loss in coal severance funds, which are divided into two separate funds, Local Government Economic Assistance Fund (LGEAF) and Local Government Economic Development Fund (LGEDF).

LGEAF funds are used to fund projects like the Webster County Senior Citizens program and the sheriff's department, while LGEDF funds are used for other qualifying projects in the county, such as infrastructure repairs.

"We will continue to get LGEDF funds for four and a half years," said Henry. "All those funds will gradually reduce."

He added that without an operating coal mine, Webster County's status with LGEAF will change from a producing county to impact county. Under KRS 42.455(2)(3)(4), an impact county "must expend 100% of (LGEAF) funds in the transportation category."

"While this will have a negative effect on our tax revenue, we had already been making changes to our budge over the last two years in anticipation of production ceasing," said Henry. "By doing so, our goal was to ensure that the loss would not cause disruption of vital services for our residents."

A reduction in coal severance funds by state law maker's in 2018 led to the fiscal court charging for use of the solid waste centers earlier this year. Until this year, that program had been entirely funded by coal severance dollars.

"I'm glad we went ahead and made changes to the solid waste and recycling program when we did," added Felker. "We've been trying to prepare for this. Now we will have to take it day-by-day and see how it goes. We may have some hard decision ahead of us."

Earlier this year, Martin County Sheriff John Kirk suspended all law enforcement activities when the county came up $75,000 short on funds for his department due to the loss of coal severance monies.

"Folks, lock your doors, load your guns and get you a barking, biting dog," he wrote in a Facebook post. "If the sheriffs office can't protect you, who will?"

The department has since reopened, but beginning this month, Kirk will be the only employee of his office.

County officials hope that some of the steps they've already taken will help the county as it tries to recover.

"We are still working to bring more economic opportunities to Webster County and we feel those efforts will begin to bear fruit in the near future. At the same time we urge people to continue to support their local businesses. That will have the greatest positive impact for our community."

Yet another area that will feel the impact of this closure is the Webster County Water District (WCWD), where Dotiki currently buys around $70,000 in water annually, making them one of the district's largest providers. WCWD is currently working with the North Hopkins Water District (NHWD) on a project that will more than offset the loss. When completed, the district is contracted with NHWD to sell up to $368,650 woth of water per year.

The county will not, hopefully, be left on its own to recover from this blow. Henry said he'd already been contacted by officials from Frankfort who want to discuss economic development options for the county. The county also has local resident State Representative Gooch, who said he wants to help the county in any way possible.

"We know we have some of the hardest working people anywhere and have worked for years to expand opportunities in our area, we must continue those efforts," he said. "It is critical to recognize that this is a national issue. It's been coming for a long time, since the first shots were fired in the war on the very resource that powered our nation through the industrial revolution, two world wars and the 20th Century."

Steve Henry told the Webster County Fiscal Court on Monday that there was still hope. While Dotiki may have been closed, he said that ARLP will be ramping up operations at Warrior Coal in Hopkins County.

"We are ready for another mine to come our way," Henry said. "Warrior is mining in our direction. It may still be a few years off. All I can say is 'mine baby mine.' "

Reach MATT HUGHES at 270-667-2068 or matt@journalenterprise.com.