Lake County government is bracing for immediate and long-term impacts as the Climax mine begins to reduce its production and workforce.
On April 24, Freeport-McMoRan, the mine’s owner, announced that production at the Lake County operation would be reduced to half of its regular output. Lake County Government is now preparing for the widespread impacts that the loss of revenue will have on county functions, Commissioner Kayla Marcella said.
According to Marcella, the loss of employment for the laid-off workers at Climax is of immediate concern to the county and the commissioners will prioritize access to resources to help those who have lost work going forward.
“We have to consider the impact on the quality of life for the people that are ingrained in our community that are employees at Climax,” Marcella said.
The county plans to help out-of-work Climax employees by connecting them with resources and services available through the Lake County Department of Human Services to help offset financial stress.
In addition to meeting the immediate needs presented by the mine’s reduction in operations, county government will also work to maintain existing communication and partnership with Climax.
Though she anticipates a challenge, Marcella feels like the county is prepared for the downturn with the help of the Lake County Assessor’s Office in projecting reduced revenue for the county and how such reductions will impact the rest of the taxing entities in Lake County.
“We will have to make a little more happen with a little less,” Marcella said.
The reduced assessed value resulting from the lower production at Climax will likely result in smaller budgets for county government and other taxing entities, though the full impacts will not be known for some time, the commissioner added.
As the county’s valuation process carries out over the coming years, Lake County is anticipating seeing a decline in revenue as a result of Climax’s downsizing — a decline that will impact the county budget and that of other taxing entities in the county, Lake County Assessor Miguel Martinez said.
This year is an intervening year, meaning valuations will not be set until 2021. The impacts of the reduction in tax revenue will be fully realized when numbers from 2021 are available, Martinez explained.
Martinez has been looking to historical records and examples from past economic downturns to help project how Climax scaling down by half may affect the county.
In addition to analyzing data from 1980 on, including Climax’s complete shutdown in 1982, Martinez has been referencing the impacts sustained by Lake County during the years following the 2008 recession.
The impacts may be comparable, Martinez said, but as residential property tax has come to represent more of the county’s operating budget in the intervening years, the proportion of Climax’s value in the county’s budget may be reduced.
In looking at how the 1982 closure affected the county, with high unemployment and the need for out-of-work Climax employees to leave Lake County for economic opportunity elsewhere, Marcella sees hope in relationships that the county has built with Climax in the decades since.
Marcella cited relationships between Lake County government and Freeport-McMorRan that will allow the county to provide the company directly with information and resources for recently unemployed workers.
“It’s still really early for us to know those true, lasting impacts,” Marcella said.
Climax did not return requests to speak with the Herald.