In a town with no movie theater, couples like Chilkat Guides’ Jen Evans and Chad Dillon find new forms of entertainnment, such as thumb wrestling. For those who don’t know, you begin by saying “one, two, three, four – I declare a thumb war.” Alas, a thumb war only lasts so long. See story in features.

Photo by Emily Palm

The Oct. 3 vote

Citizens debate implications of sales tax hike in Proposition 1

The Oct. 3 municipal election ballot almost bordered on boring, but any electoral ennui evaporated when Skagway City Council Finance Chairman Dan Henry moved to include a sales tax ballot proposition.
The council recently passed a question to the ballot 4-2 that would raise the sales tax from 4 percent to 5 percent and exempt groceries and large appliance purchases. Councilmembers Dave Hunz and Lisa Cassidy dissented, noting that they didn’t see a need and that more research of its implications should be performed.
For the past two or three years the council has discussed the merits of raising the sales tax, said Henry, who authored the ordinance that would become effective on Jan. 1, 2007 if passed. Additionally, if the measure passes, Henry said he plans on intorducing a resolution Oct. 5 that would move the sales tax holiday to begin Oct. 15 and last through March 31.

The numbers
During the 2005 calendar year the current 4 percent sales tax brought $5,164,004 to city coffers, according to the City of Skagway Treasurer’s Office. If the tax had been 5 percent last year (including existing goods that are taxed) an additional $1,284,592 would have been collected.
The office did not disclose how much of the sales tax revenue came from groceries over the course of a year because it would reveal proprietary information of the major grocery store in town, but the owner of Fairway Market was willing to share those figures. For the first half of this year, about $54,000 to $55,000 has gone to the city from grocery taxes, said Fairbanks,. This doesn’t include the third quarter, which is usually the largest, he added.
Groceries that apply for food stamps would likely be exempt, said Fairbanks and City Manager Bob Ward.
In the past, the city looked at exempting groceries but rejected it, because the owner didn’t believe that the computer system at the time would not be able to distinguish between food and non-food items, said Ward.
Now an itemized computer system tracks grocery store stock, and exempting food items would take a click of the mouse in the office at Fairway Market.
Differentiating between food and nonfood items at the health food store You Say Tomato takes more than a couple clicks. More cumbersome bookkeeping could raise the cost of doing business, said new owner Julene Fairbanks, who is a niece of Ed.
Despite extra work the ordinance could create for her store, Julene Fairbanks isn’t completely opposed to exempting food items. “I’d like to think it could increase grocery sales and lower the cost of living in Skagway,” she said.

The need
While it is noble to try, “small cities like Skagway just can’t afford what people have in larger towns,” said Ed Fairbanks, adding, “We’ve got an extravagant government.” Police officers in Carcross drive Chevy Caprices, he pointed out, questioning why Skagway needs all SUVs.
“Quite frankly, I don’t think our city government had any right to put it on the ballot,” he said, adding they have not justified any reason for the increase.
On the other end of the spectrum are those who believe increasing the sales tax would greatly behoove the city.
“The hold-the-line budget that we were faced with this budget cycle is a demonstration of the need,” said Henry, noting the infrastructure (such as streets, garbage, and the sewage treatment plant) needs more money.
“All of these resources have been stretched and stretched over the last 10 years dramatically,” he said, adding “It’s about maintaining everything we have.”
Usually he wouldn’t get involved, but Ward said since he has only several months left in his tenure as City Manager he agreed to comment on his support of the resolution.
“It shouldn’t be such a challenge every year to figure out how much money we can give our schools and projects that make Skagway a better place to live,” he said.
Raising the sales tax and exempting food and major appliances combined with the longer sales tax holiday could “generate more income to the city to fund things we shouldn’t have to battle so vigorously over, while affecting residents as lightly as possible,” said Ward.
The federal and state governments perceive Skagway as a wealthy community, but the bulk is owned by people who don’t live here, said Ward, noting that the city still gets penalized for it. He cited the 1999 Skagway Tourism Economic Impact Study that found for every dollar spent in Skagway, 9 cents stays in town.
Henry quoted the study as well and predicted that with less locally owned businesses, the amount Skagway nets has probably diminished in the past seven years.
“We’ll do our best to maintain a low mill rate and grow this community,” said Henry, adding, “Bottom line: Skagway residents will keep more money in their pockets due to spending less on a year-round basis.”

The effects
Those who sell products or services at a flat rate, such as alcohol and tours, could object to raising the sale tax, admitted Henry. “The problem will only be for tour operators that can’t substantiate the value of their tour,” he said, adding that an operator would need to decide if they should raise, for example, a $50 tour by a dollar, absorb the added one percent tax increase or reduce their expenses.
“I cannot see one other soul objecting to Skagway getting their due money,” he said.
And how about the argument that the proposed raise may drive sales away?
“People that make those kind of statements should be seeing a whole team of psychiatrists. They would only spew out that talk to try and scare someone,” said Henry, who noted that the present 4 percent sales tax doesn’t lure people in because it is lower than neighboring communities.
Ed Fairbanks, a former city Finance Committee chairman, begged to differ. Continually raising taxes will cause businesses to fold up and also deter more from coming in, he said.
For example, in the past couple of years Alaska has increased its tobacco tax from the lowest in the nation to the highest and, consequently, tobacco sales have decreased from 10 percent of all sales at Fairway Market to about 7 percent, noted Fairbanks.
“I don’t think people have quit smoking,” he said, and added that he believes black market sales have increased with more cigarettes entering the state untaxed through illegal online purchases.
“You can see what taxes do...people will even violate the law to avoid the costs,” he said.
Other Southeast cities may have higher sales taxes, but shipping to Skagway is more expensive, said Fairbanks, cautioning that “adding another 1 percent to the sales tax adds a distinct disadvantage.”

Only time will tell
While predictions of what an increase in the sales tax and elimination of food and large appliance taxes vary, all agree it brought something to debate at the tables of the restaurants still open.
Among voting for a light slate of city council and school board candidates, Skagway residents will answer the question “Should the rate of sales tax collected upon sales made and services rendered in Skagway be increased from 4 percent to 5 percent with a tax exemption for groceries and household appliances?”


LBC staff recommends against borough, again

Court-ordered remand of previous decision changes little; hearing possibly in late November over city protest


The prospects of a Skagway Borough are not looking good, city officials stated recently following a recommendation from the Local Boundary Commission staff that the city’s petition be rejected again.
At the Sept. 7 Skagway City Council meeting, City Manager Bob Ward reported that LBC staff had also overridden a request from the city to schedule a hearing of the commission in Skagway next summer, and set a date of Nov. 27 instead. The date and place was not up on the LBC calendar this week, and staff said in an e-mail that “logistics are still being ironed out” and that a hearing notice will be published in the next several weeks.
If the hearing is held in late November, this would give the city just two months to prepare.
“We are fighting an uphill battle against the state,” said Mayor Tim Bourcy, calling the move “extremely malicious.”
The renewed recommendation against borough formation comes a year after a court ruling which threw out the 2002 decision by LBC to reject Skagway’s initial petition.
Skagway won its appeal when the court said that the LBC, without prior public notice, applied a new “fundamental principle” that 443.1 square miles was not large enough to be a borough. That’s the area of Skagway.
The matter was remanded back to the LBC, with instructions that it was still free to reject the petition, but that “any decision must be based on standards adopted according to the law.” The law also allows the LBC to amend the petition or impose conditions on incorporation.
The city rushed to put together a 30-page supplemental brief in support of the petition by the end of 2005. It even had testimony from constitutional convention clerk and former Superior Court Judge Thomas Stewart to support the petition. But the LBC staff took until mid-August of this year to come back with its supplemental report, which cites several others who were at the constitutional convention.
The 83-page document and appendix, written by staff supervisor Dan Bockhorst, recommends rejection of the petition on several counts:
A) “Strong local interests underlie the Skagway borough proposal; commission decisions must reflect a broader scope – the best interests of the state.”
Essentially the state argues that Skagway has more to gain financially by being its own borough versus incorporation into other boroughs, whether it be the Haines Borough or a Southeast “Super Borough.”
B) “Borough incorporation standards are most reasonably read in a regional context.”
Under this section, Bockhorst uses a letter from former LBC Chair Kevin Waring and cites statutes and constitutional convention transcripts to conclude that the intent of the framers was that boroughs are meant to be regional in scope, somewhere in size between existing cities and the state.
C) “The proposed Skagway borough does not comprise an area with a population that is interrelated and integrated as to its social, cultural and economic activities.”
In this section, Bockhorst contends that Dyea is not a separate community from Skagway, even though it has its own community advisory board. He acknowledges that Dyea’s 29 residents is slightly more than the 25 required by the state to be considered a “community,” however it stated that they are Skagway residents and “do not live in a close geographical proximity that allows frequent personal contacts characteristic of neighborhood living.”
It also said Dyea does not have a separate school, police station, fire station, or polling place; only two commercial structures; and that growth is restricted by the National Park Service. It also states that Dyea’s population is dependent on Skagway, and that it is premature to predict the impact of the conveyance of land from the state to the city in the area. “Regardless of what might happen with respect to the 932 acres in question, future potential is not evidence of a present community.”
D) “The proposed Skagway borough does not comprise an area with a population that is large and stable enough to support a borough government.”
In this section, Bockhorst writes that “the law presumes that at least 1,000 permanent residents are needed to meet the standard” but that the commission can conclude that more is needed to sufficiently operate a borough. Regardless, Skagway is below “the presumptive minimum established in the law,” he writes. Since 2002, the permanent population has dropped from 862 to 835, according to the state, and he also cites reduced enrollment at the school, reduced Permanent Fund Dividend applications, and the seasonal shift in population.
E) “The boundaries of the proposed Skagway borough do not encompass an area that conforms generally to natural geography and that includes all areas necessary for full development of municipal services.”
Again, Bockhorst puts an emphasis on “area.” Skagway is actually part of the Chatham REAA, which winds its way around Southeast for 20,776 square miles. While acknowledging that those boundaries are not the best model, the alternative Skagway borough boundary proposal does not constitute an exception, he notes. He questions why Skagway, which by its own admission was “land locked” by the creation of the Haines Borough, did not push for borough status when it annexed Dyea and the surrounding area to the Canadian border in 1979.
F) “Article X, section 3 of Alaska’s Constitution promotes boroughs that embrace large, natural regions; it is a mandate under which all statutory borough standards are to be applied.”
In this section, Bockhorst counters Judge Stewart’s assertions that the constitutional convention delegates intended that “a borough should encompass the geographic area actually used by the people seeking to form the borough.” Stewart also sat on a 1996 review panel of the constitution, in which his points were argued. Stewart contended that once you start moving away from local interests, boroughs no longer have common interests. But framer Victor Fischer reacted that they intended for governments to be on a three-tier level – city, state and then a “regio
nal borough” between the two. He cited the Kenai Borough with a whole series of cities as an example. Stewart acknowledged that Fischer was on the local government committee and “better informed than I am.”
G) “The best interests of the state are not served by the Skagway borough proposal.”
The report concludes that the proposal “serves the parochial interest of the citizens of Skagway” but not the broader public interest of “maximum local self-government.” In essence, nothing would change from Skagway becoming a borough, and the state should not encourage one of its 98 cities in the unorganized borough from causing a situation that would create “excess numbers of borough governments,” the report concludes.
The full report can be downloaded off the LBC Website on the Skagway petition: http://www.commerce.state.ak.us/dca/lbc/skagway.htm
Now the city has to overcome the hurdle of yet another negative LBC report.
“I hope that Mr. Bockhorst will be fair and equitable at the hearing,” noted Ward in a recent city manager’s report, adding, “but then I hope I will win the lottery too.”
At the Sept. 7 meeting, a frustrated Mayor Bourcy said the city “probably will not win” the next round with the LBC. “This is the end of the road of our opportunity to become a borough.”

No mini-bars, but some truth to tabloid tales of Robin Williams in Skagway

Recent tabloid reports noted that actor Robin Williams fell off the wagon during his stay in Skagway during the April 2004 filming of “The Big White.”
A friend of Williams supposedly reported to the National Enquirer that one desperate night he consumed the contents of the mini-bar at his hotel.
The owner of Mile Zero Bed and Breakfast, where Williams stayed, doesn’t know what his friend is talking about.
“We don’t even have a mini-bar here,” said owner Tara Mallory who recalled seeing Williams riding his bike quite often when he was here.
Williams’ publicist, Mara Buxbaum, declined to comment on his stay in Skagway.
“Those were from tabloid reports and we never offered comment,” wrote Buxbaum in an e-mail to the News. Buxbaum issued this statement, “After 20 years of sobriety, Robin Williams found himself drinking again and has decided to take proactive measures to deal with this for his own well-being and the well-being of his family.”
Not many local residents volunteered stories of Williams drinking during his stay in Skagway. It happened but none would go on the record about what they saw. He was seen more often riding his bike.
“The town did a good job of respecting his privacy,” said Christy O’Shaughnessy at the Red Onion Saloon, adding that she’d like Skagway to remain a safe haven for him.
What if Skagway was the catalyst that pushed Williams off the wagon here? “That’s his business, he’s a big boy now,” said O’Shaughnessy.

Cause of derailment remains unknown
As of press time, the cause of the train derailment near Bennett on Sept. 3 that resulted in three injuries and one death had not been released.
“Nobody has concluded anything yet,” said John Cottreau, spokesman for the Transportation Safety Board of Canada. Currently they are testing the rail cars and equipment, interviewing those on the railway at the time of the accident and gathering information.
Investigators collecting data serves as the first part of a three step process. Once they have all the pertinent information, they make an analysis and present it to the NSBC. After viewing the presentation and reviewing the analysis, board members draw conclusions.
No fixed date is set for when a conclusion can be made. They will take the time they need to conduct a thorough investigation, said Cottreau.

Tyson Ames and Tim Gladden check out the biodiesel maker. The final product burns brightly. EP

Biodiesel produced at treatment plant

Roiling and boiling inside the wastewater treatment plant bubbles a mixture that could decrease incinerator fuel consumption next summer.
A couple years ago Tim Gladden heard a report on KHNS about rocker Neil Young’s tour buses running on bio-diesel. This inspired the wastewater treatment plant operator to begin searching, not for a heart of gold, but for a way to turn the used restaurant oil dropped off at the plant into a viable resource.
After spending countless hours late at night on the Internet at home researching how to make the clean burning fuel, Gladden perfected a process that produces 40-gallon batches of bio-diesel that he first tested on his diesel truck.
Despite smelling a bit like a combo meal on wheels (Gladden said it smells like fries and burgers), it worked and was used to heat the back of the city shop last winter. Gladden and Tyson Ames, assistant wastewater operator, are working on filling two new 500-gallon tanks with bio-diesel to be used next summer for the city’s garbage incinerator. A 50 percent mix could reduce diesel consumption at the incinerator.
The process breaks down like this: restaurants drop off their used oil and 40-gallon increments are heated and filtered into a drum attached to a backyard contraption built by Gladden. Water separates from the warm oil and gets decanted off. Traveling through a homemade heating coil, the filtered oil fraternizes with a mixture of lye and methanol. In what Gladden refers to as the “reaction chamber” the sodium methoxide and oil churns for about an hour resulting in a dense layer of glycerin at the bottom of the drum and an amber oily liquid at the top. The amber oil gets transferred to two drums that contain aquarium stones and goes through “bubble cleaning.” After several days of the final effervescent stage, voila, we have bio-diesel.
“It is just as simple as it seems,” said Gladden of the process.
A handmade bar rests by the sink in the plant, made by Gladden and Ames who used the excess glycerin from the process and added a touch of verbena for scent. Don’t expect to see them at any craft fairs soon though.
There are no plans to expand the operation in the near future, said Gladden, who noted two things would need to happen, the bugs would need to get worked out of the system and a separate facility would need to be built and staffed.
“And no, we don’t want Haines’ used oil,” quipped Gladden.



Denise Hill of the Dead Salmon Heads brings it home as she crosses the finish line of the Klondike International Trail of ;98 Road Relay in Whitehorse. See story in features.

• FEATURE: Summer romancing in "Shagway"

• KLONDIKE ROAD RELAY: Running with the fish

• SPORTS & REC: Cross-country team ready for regionals

• FISH THIS! - Living for the fringe season

HEARD ON THE WIND: The almost last hurrah....

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