Booneville still struggling with Cargill loss, recession

story by Marla Cantrell
[email protected]

People in Booneville still talk about the days when getting a job at Cargill Meat Solutions plant meant good wages, job security and the hope that the money they earned would buy an even brighter future for their children.

But that was before the March 2008 fire shut down the meat processing facility and left 870 without work.

Booneville Mayor Jerry Wilkins remembers that Easter Sunday well. For months after there was hope that Cargill, with its annual payroll of $18 million, would build back on the 17-acre property. That did not happen. In May 2008, the company announced it was leaving Logan County for good.

The loss hit the town of 4,200 hard. The mayor watched as one of the best things ever to happen to Booneville turned into one of the worst.

“If I had a choice I wouldn’t want to employ 870 people in one place,” Wilkins said. “That’s not good. When you lose that many jobs at one time that’s a disaster.”

He’s now looking to smaller companies fill the Cargill void, ideally with an employee base of between 150 and 200 people. Rockline Industries, a Wisconsin-based, family owned company, which opened in 2008, fits the bill perfectly.
www.rocklineind.com

“Rockline makes 97% of the coffee filters in the world and wet wipes,” Wilkins said. “They have a plant in Springdale that employees 600 people and the plant here is up to 100 in production and 50 in shipping.”

OPPORTUNITIES
And there is reason to hope something good will become of the Cargill site. The $25 million meat freezer survived the 2008 blaze. There are three companies showing interest in a cold storage facility. Wilkins said any of the potential buyers would create 25 to 30 jobs in the freezer alone, and possibly add a production facility that could employ another 100.

The possibility for a much bigger facility exists. Cargill sat on 17.5 acres. Another 20 is available just across the road.

When the fire hit, many worried that other businesses, such as the convenience store near the plant, would follow suit. That didn’t happen, and the store is doing well, likely due to its location just off Arkansas Highways 10 and 23.

The mayor doesn’t believe any other businesses closed as a direct result of the shut-down. The town is home to a large population of retired people, whose money does not come from a weekly paycheck. That, he said, helped stabilize the situation.

DOUBLE WHAMMY
While the Logan County town was working through the plant closing, the recession was getting worse. And Fort Smith, where many of the former Cargill workers landed factory jobs, started dealing with its own problems. In the fall of 2008, as the housing market faltered, Whirlpool and Rheem responded by laying off workers.

A more recent problem for Booneville has been the drop in gasoline prices, which slowed production at area gas wells, including wells on city property. The royalty checks started drying up.

“When gas gets to certain price, they shut it down till the price goes up,” Wilkins said. “They are starting back up slowly so it was a good source of revenue for the city because we have a lot of land with gas wells on it. You might get an $80,000 check on the gas wells a month now it’s going to be $3,000 or $4,000.”

Sales tax revenues tell the rest of the story.

“The way we can gauge it is we have a penny sales tax for the hospital and a penny sales tax for the city to use,” Wilkins said. “From this time last year to this year, we’re probably off $10,000 a month. Should be $52,000 or $53,000 (a month) and it’s more like $49,000 or $41,000. That’s quite a bit. Part is Cargill and part’s gas production and part’s the economy.”

LEANING ON OPTIMISM
But none of this keeps the 60-year-old mayor up at night. He sees signs, like the interest in the Cargill property, as proof money is once again beginning to flow. Wilkins believes many who have been putting off purchases in case the economy takes another dive will grow weary of the wait. And then they’ll spend. First a little, and then a little more, until the wheels of commerce begin to turn.

Until then, he’s working on a lean budget — there was no increase from the 2009 budget to the 2010 — and said one of his main priorities is retaining all the city’s employees.

With Cargill gone, the biggest employer is the state-run residential Booneville Human Development, where 350 people work with developmentally challenged adults. That facility is equipped to accommodate more than 150 patients.

And an additional behavioral health facility is planned for Booneville in the city’s old 25-bed hospital. (A new $17 million dollar hospital took its place.) Wilkins said work has already begun on the remodel.

“I’ve got $800,000 in Little Rock that was appropriated for it that I should get back next year,” Wilkins said. “It will be mostly an out-patient clinic with maybe 10 in-patient beds.”

As for his own future, he’s up for reelection this year but declined to say if he will seek a third term. Wilkins works 15 hour days, divvying up his time between his mayoral duties, his job as a funeral director, and running his cattle ranch. But whether he leads the town in the coming years or not, he believes its future is golden.

“We’re a low pressure town, with a great quality of life,” Wilkins said. “But it’s the people that make this town great. We take care of each other. You don’t find that everywhere.”