Ghost town _ The last resident leaves the decaying town of Pacific to the bears and moose\NEWS A5 Baby Beauty A newborn calf is greeted as a welcome addition at a local barnyard/COMMUNITY B1 Hoop hype Caledonia’s girls basketball squad picks up more wins en route to provincials\SPORTS B4 $1.00 plus 7¢ GST S ($1.10 plus 8¢ GST outside of the Terrace area) Horseshoe school may By JENNIFER LANG TWO YEARS after the battle over the possible closure of Parkside Elemen- tary school ended, the fight to save another horseshoe area school may just be beginning. The school district is taking another look at closing an elementary or pri- mary school in the horseshoe area and converting it into a facility for high school students now going to two al- ternate programs downtown, Randy Smallbrugge said last week. School trustees backed down from a plan involving Parkside Elementary in 2000, citing high costs. Smallbrugge cites the opening of a new, 250-seat elementary school on the bench this fall, which will take Students now making the trip to a horschsce school, and overall declin- ing enrolment as the two main reasons why the district has revived the issue, He said alternate students at the Teen Learning Centre and at Lakelse Junior High are cramped and crowded into two rented downtown buildings. Smallbrugge said the school board has approved a plan to consider moy- ing those alternate programs into a school in the horseshoe area. “We don’t know which school,” Smallbrugge said, adding all three elementary schoois in the area — E.T. Kenney, Parkside, and Clarence Mi- chiel — have been considered. “We're looking at all of them to see how we can best utilize their space,” Smallbrugge said. Assistant superintendent Rob Greenwood is preparing a feasibility study that will recommend different options to the school board, which mects next week in Terrace. Greenwood said public comment will be sought before any decisions are made. Meanwhile, the school district is not ruling out having to close schools to save money regardless of whatever action it takes concerning its horse- | Wednesday, February'27, 2002. be closed shoe schools. A provincial government freeze on school district budgets and a legislated wage increase for school teachers may mean school closures in this district are necessary. . Bigger class sizes and teacher lay- offs are a certainty, Smallbrugge said. Add declining enrolment into the mix — the district lost 329 students in the past two school years — and school closures are a possibility, too. “We may very well have to look at sckool closures in all of our communi- ties,” Smallbrugege said. He and other district officials learn later this week how much money this 1 school district will receive for the next three years, School districts have been promised three-year budget envelopes, but they've also been told to expect a change in the formula that determines how much money districts receive. Districts are also being asked to cover two-thirds of a 7.5 per cent wage increase over three years for teachers but aren’t going to be given additional money to pay for ‘it. Smalibrugge pointed out a number of other school districts are so financi- ally strapped they’re handing in deficit budgets for this year. That’s not likely to happen here, he said, ¢ H Smouldering remains — KODA and her owner are out of a home after a fira destroyed this trailer at 3908 Hagen St. in Thornhill Feb. 21. Local RCMP said a grease fire started in the kitchen around 3:30 a.m. Po- lice said foul play has been ruled out. The resident, his two young daughters and their pets were able to get out of the home without injury. The home’s owner, Lonnie Rabideau, Said the resident — his son’— did not have insurance on the contents of the hame. SARAH A. ZIMMERMAN PHOTO. _ Creditors will be paid a little bit if they approve of Skeena sell deal A - of regulations health authorities can put to use. By JEFF NAGEL LOGGING contractors and creditors will get 13 cents on the dollar for Skeena Cellulose’s un- paid debts if NWBC Timber and Pulp Co.’s purchase is approved, The Montreal-based group that includes key officials from former owner Repap Enterprises have pledged to pay $2 million towards the more than $15 million SCI owes. The purchase price for Skeena is $6 mil- lion, to be divided between the province and the TD bank. If cabinet approves the sale as expected today, the vote of creditors on March 25 will be the final major hurdie for the deal to pro- ceed, Other details of the sale remain secret until it closes April 19, The restructuring offer to creditors is to be tabled next week. The final sale price is less than half the $15 million NWBC offered previously. Documents filed by NWBC in court indi- cate it planned to sell some of Skeena’s nearly $400 million in tax losses to another company that could use them to offset its profits. . A court affidavit shows NWBC believed the tax losses could be sold for 10 to 15 per cent of their value. a The price offered dropped after NWBC - realized a sizable amount of the tax losses - couldn’t be used. , oye NWBC president Daniel Venicz admitted the tax losses are valuable, but downplayed the issue and rejected suggestions it could sell the tax losses and teave SCI in the lurch. “We haven't worked so long and so hard to buy tax losses,” he said. “We are buying a bu- ‘sinless we want to own and operate. We bought Skeena.” He said the tax losses may help attract in- vestors because it means they’re able to invest in a company that can take advantage of tax- free profits for a number of years.’ : “Those tax losses attract money,” Veniez said. “An investor gets tax-free profits. That jacks up their return on equity, which is what any investor wants.” “We're going to make use of every oppor- tunity available to us to recapitalize the com- pany,” he added. Enterprise minister Rick Thorpe called the price tag fair given what could have been col- lected under bankruptcy. Thorpe said the deal does not give any sub- sidies that he’s aware of, nor does it restrict future B.C, forest policy. Although NWBC has pledged it will raise $150 million to invest in Skeena Cellutose, Thorpe admitted there is no mechanism to en- force that. re Sone -“T think at some point:in time we have to take people at their face'value and we have to “take péople at their. public commitments,” he said. “I believe they're committed to doing 1 those things.” As of last week, Veniez said, NWBC has raised $75 million or half of what it plans to” invest in SCI. He said that had been done ‘in three weeks and he was confident the.rest will also be raised. Te “Our threshold to get us into a comfort zone — is $100 million by closing, ideally more -in place before then,” he said, 2): Veniez said the plan is to restart the saw- mills and pulp mill this summer, with logging to start some time earlier. “We’re going to have to recruit people to come back to Skeena,” he added. “It’s been down for a long time and a lot of good people have left. We’ve got to find ways to. bring them back or find new people.” Prince Rupert and Port Edward have signed agreements with NWBC that will see property taxes repaid over time. Terrace, which is owed much less, has not signed such a deal and may seek to simply preserve its- option of eventually selling the local sawmill in a tax sale if taxes aren’t paid, ‘Court documents also reveal a. third late bidder was calling itself Coast. Cellulose Group and included former Skeena Cellulose CEO Bill Steele. The province negotiated with the group, but -it didn’t” have enough time to deal: with the fine details of a sale and wasn’t willing to put” up a ron-refundable deposit. - _ Health bosses told to cut costs SENIOR HEALTH care managers in the north are being told to cut 10 per cent from their direct patient care bud- gets and 20 per cent from non-direct care budgets over the next three years. All told, the Northern Health Authority (NHA) ex- pects a three-year budget shortfall of $45.5 million, pri- marily from wage increases and from a budget freeze brought in by the provincial government. Managers also have the option to come up with ways to boost revenues, authority chief executive officer Peter “Warwick-said in-a-memo-to-managers. -.. ..... “The only rule is that the status quo is riot an option — challenge all assumptions as to what services you pro- vide and how your services will be provided,” said War- wick. He’s predicting a deficit in the first year of $22.5 million. That fiscal year begins April 1. That’s to be followed by a $13.5 million shortfall in year two and a $9.5 million shortfall in the third year. Four per cent is to come off of direct patient care for the year beginning April 1 and three per cent for each of the two subsequent years. Non-direct patient care is to take a 10 per cent hit this year followed by cuts of six and four per cent in the second and third years. Warwick’s formed what he’s calling redesign teams to tear apart every facet of northern health care in look- ing for more revenue or more ways to save money. The teams will “oversee a process ta have services delivered in a different manner which will reduce re- source use by the targeted levels. The goal is to provide an equal or better service within our constrained budgets,” Warwick said. Each of the teams will report to a senior manager. Dieter Kuntz, who used to run the old community health council here and is now in Prince George, is in charge of cutting costs in food services, laundry services and housekeeping. The redesign teams will report back the third week of March. Now that the provincial budget has been released, the ’ Northern Health Authority will soon know what its exact budgets is, meaning it can then decisively plan on ways to cut costs, , “We'll be making decisions in a matter of weeks,” said Cholly Boland, the NHA official in charge of health care in Terrace and Kitimat. “The financial imperative is there,” he added, One measure which will help health authorities cut costs is new legislation allowing them to ultimately con- tract out-services. But that has yet to be defined in terms hotly criticized oe, By JEFF NAGEL. “A DECISION to allow more than a third of the tim- ber cut in the northwest to be exported as raw logs has outraged unions and environmentalists and put Skeena’s MLA on the defensive. . Roger Harris struggled last week to explain the measure he helped craft as one geared to put log- ging contractors back to work. “In unique times and tough situations you have to take measures to put people back to work,” he said, adding he dislikes log exports. The Feb. 13 cabinet order okays the export of a maximum of 35 per cent of timber harvested from each licence in the North Coast, Kalum and Ki- spiox forest districts for the next three years. Unionized sawmill workers say selling raw logs to Japan or China effectively exports their jobs in B.C, sawmills as well. “We're totally pissed off,” said Surinder Malho- tra, the IWA’s local rep here. “They're destroying our children’s future by letting these logs go.” Cont'd Page A12 a