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Butte Creek Mill water rights in flux

Water has powered the Butte Creek Mill since 1872, but that power source is in danger of drying up.

The mill could lose water rights from the creek and might be forced to convert the power source to electricity, which would undermine the claim that it is the only commercial water-powered grist mill west of the Mississippi.

The water rights for the creek are owned by former Eagle Point Mayor Bob Russell, but he’s negotiating to sell his rights to a nonprofit conservation organization.

Russell, who previously owned the mill, is on an advisory board for the mill, and discussions about his water rights have swirled around since the Butte Creek Mill Foundation took over the iconic structure in 2018.

Russell has agreed to sell off just under half of his water rights to the mill for $257,390, but that’s a tall order because the iconic structure hasn’t been completely reconstructed after a 2015 fire and is already short on cash.

“We have talked around this ad infinitum,” said Jay O’Neil, foundation board chair. “It leaves the mill in a very difficult situation.”

There are about 600 water rights along Butte Creek, and the mill has thought about buying one of those other water rights.

But Russell’s water rights are some of the oldest on the creek, which means they would also be one of the last to be shut off in times of drought.

Unlike most users of the creek water, the mill diverts flow — to the turbine that powers the grinding wheel — and then the water flows back into the creek.

The original water rights allow for 23 cubic feet a second of water, and the mill estimates it would need about 10 cubic feet to power the turbine.

A diversion channel runs about a quarter-mile until water flows through the turbine.

The mill doesn’t turn by a conventional water wheel. Instead water flows through a millrace and into a 12-foot-deep penstock where the weight of the water activates a turbine that runs the wheels, belts and pulleys.

The original grinding stones were transported by boat around South America to Crescent City. The “buhr” stones, originally from France but assembled in Moline, Illinois, were then transported by wagon over the Siskiyou mountains to Eagle Point.

In December, the old stones started turning again, producing 3,000 pounds of flour.

While water is a big concern at the moment, the mill still needs to get the reconstruction completed.

“There’s never enough money in the kitty,” O’Neil said. “We’re about 75% complete for the construction of the mill.”

Originally the cost to complete the reconstruction was estimated at about $2.5 million, but O’Neil said it’s over $3 million now. He said the project has faced a number of issues that have raised costs, including a fire-suppression system and a vault.

At the moment, he’s looking at needing another $800,000 to finish the project.

The mill has asked for donations on its website, buttecreekmill.com, which should include a note that the donation is for “Water Rights.” A donation can also be sent to Butte Creek Mill Foundation, PO Box 957, Eagle Point, OR 97524.

“I am totally impressed, and it’s heartfelt, with the support from this valley, said O’Neil, who has lived in the valley for two-and-a-half years, moving from Kansas. “We saw it with fires, with the relief that came in.”

The new turbine is more efficient, so it should require less water than before, and that’s why the new estimate is about 10 cubic feet a second.

O’Neil said the mill has about 60 days to figure out what to do before the water rights could be sold to the nonprofit.

Russell said he’s been willing to work with the foundation to come to a solution.

“This has been hanging out there since the day I sold them the property,” he said. “It was spelled out quite clearly.”

Russell said he received $400,000 from the insurance company for his losses when the mill burned down, also destroying his extensive collection of antiques.

He said he’s probably out about $2 million, and the sale of the water rights would help offset some of his losses and help him through his retirement.

“It was really the last item of value from the mill,” he said.

In 2008, Russell tried to sell of some of his water rights to the city of Eagle Point. At the time, he was offered $62,500 for each cubic feet of water per second that he sold.

The city wanted to buy $625,000 worth of rights, but after almost eight years of negotiating with Salem over the transfer, the deal fell apart. The city hoped to convert the water rights from a non-consumptive use to a consumptive use. The mill is considered a non-consumptive use of the water since it goes right back into the creek.

As a result of extensive negotiations, Russell was only able to sell off 1.4 cubic feet a second of water to the city.

Even though the Mill has about 60 days to present something to him, Russell said he thought there could be an extension of time, if needed.

The nonprofit organization, the name of which he didn’t want to disclose yet, is also willing to work with the Mill, Russell said. He said the conservation organization has offered him around $600,000 for the water rights but the organization also supports selling some of the rights to the mill.

“I just want the Mill to be successful,” he said.

But he’d also like to recoup some of his losses.

“I’d like to pay off my house,” he said.

Reach reporter Damian Mann at 541-776-4476 or dmann@rosebudmedia.com. Follow him on Twitter @reporterdm.

{ }Jay O’Neal says the Butte Creek Mill could potentially loose the water rights access to Butte Creek. (Jamie Lusch / Mail Tribune)