BREAKING THE TAPE

Mickey Wilson of Skagway broke away from the pack toward the end of the 1A-2A-3A regional cross country meet in Ketchikan to win the region championship by a whopping 8 seconds. See more photos from regionals and how Skagway runners did at State in Features below.

Photo by Klas Stolpe

Taiya River bridge derating curtails heavy traffic

Fire trucks, other vehicles too heavy

By JEFF BRADY

An inspection this past July of the Taiya River bridge has resulted in enforcement of a 5 ton per axle limit, prompting a real concern that fire trucks and other essential vehicles will no longer be able to access Dyea.
“The current load posting axle weight limit on the bridge is 5 tons, which was in place at the time of the critical inspection,” wrote Roger Wetherell, spokesman for the Department of Transportation and Public Facilities, in an e-mail. “Nothing has really changed since July 7, 2008 – the last inspection date. Vehicles can be analyzed for weight capacity and stand the possibility of being permitted to drive over the structure by our
Measurements and Standards Division.”
But Wetherell added that the final inspection report has not yet been completed. There is a concern locally that the bridge may be derated further, and the Skagway Borough Assembly is considering moving repair or replacement of the bridge to the top of its capital improvements priority (CIP) list for the upcoming governor’s budget.
Fire Chief Mark Kirko had discussions early in the week with bridge inspectors, and is already in the process of preparing changes to the department’s response plans for Dyea.
At present, none of the department’s fire-fighting fleet is legal to cross the bridge, except for his command vehicle and a utility vehicle, Kirko said. Both ambulances are over the limit, he added. The new ambulance has a total gross vehicle weight of 11.5 tons.
Kirko said being able to have a vehicle inspected by DOT and possibly permitted to cross doesn’t change the danger or risk to firefighters in the vehicle.
“If the inspection is clear this is the maximum (bridge weight limit), getting a permit to go across doesn’t change the fact it is dangerous or not...and if a life risk is associated with it.”

The Taiya River bridge has been rated “structurally deficient.” JB

Kirko said he has learned from inspectors that the bridge currently is rated at 40 percent of its original capacity, which was apparently 10 tons per axle back when the bridge was constructed in 1948.
“It may have been rated below since then, but now there is a posted sign,” he said.
Wetherall was trying to confirm the last inspection of the bridge prior to this past summer’s. He said it may have been in March 2005.
On the website www.bridgehunters.com, which features reports on historic bridges in the U.S., the Dyea bridge’s superstructure is listed as “poor” and its deck and substructure “fair.” The overall appraisal since 2006 is “structurally deficient.”
The Dyea Advisory Board and Skagway Borough Assembly discussed the issue at meetings last week.
Public Safety Committee chair Mark Schaefer said his conversations with DOT indicate the bridge will be derated again, and that currently the department can’t take its own gravel trucks across the bridge.
This means gravel extraction from the borough’s pit by West Creek will have to stop as well, along with fuel deliveries, and other heavy vehicle uses. Robert Murphy, whose tour company has horses across the river, has already asked the borough for permission to move his heavy equipment to his property via a landing craft on the Dyea flats.
“I want to see some movement to get (the bridge) fixed or replaced,” Schaefer told the assembly.
The assembly will be preparing its CIP priority list for the governor’s budget and the legislature on Oct. 16.
Kirko said he is compiling data for that meeting.
“I’m hoping these facts help push that project into the STIP (State Transportation Improvement Program) to get it repaired or replaced to make it a safe, usable bridge to cross the river,” Kirko said.
A public safety meeting also will be scheduled for next week to address new emergency procedures for Dyea, he said.

How random do sales tax audits need to be?
Question raised after some businesses were ‘hand-picked’

By JEFF BRADY

The Municipality of Skagway conducted audits of four businesses for sales tax in early September, but one of those who was audited has questioned how they were chosen, and whether the process should be more random in the future.
Kathy Pierce, who operates Chilkoot Charters and Tours with her husband Larry, said they had no problem with being audited, but that when she questioned how they were chosen, “we were told certain staff members and a committee had made the selection and that our company was HAND PICKED for the audit,” she wrote in an e-mail to the News. “They needed to include a charter company so they just arbitrarily ‘picked’ us.”
Pierce continued, “When I asked what criteria they used to select our company, I was told that they knew our books would be in good order and that would make the city look good to the auditors (that they were doing a good job at collecting sales tax).”
Pierce, who is business manager for the school district and familiar with audits there and previously with the Haines Borough, said “I was amazed, then furious to have been put through the time and effort of collecting, organizing and delivering our supporting sales documentation for a 6-month period just to make the Borough Administration ‘look good’ to their auditors. More importantly, I had wondered why our local government had not even entertained the idea of a random selection process.”
She also expressed concerns that the sales tax audits had not been done since 2005.
During interviews with the borough sales tax clerk, manager, auditors and finance committee over the past two weeks, it was clear that the process was not totally random, but nor was it required to be random or conducted annually.
Skagway Municipal Code states, “the City Council shall from time to time designate a person as city sales tax inspector, to make investigations and inspections of those books and records of the persons, firms and corporations (hereinafter termed ‘taxpayers’) who are liable for remittance of taxes under this chapter.”
Borough sales tax clerk Kathleen Moody said a decision was made to have a sales tax audit this year after discussions with Borough Manager Alan Sorum and Treasurer Cindy O’Daniel.
Sorum said sales tax audits had not been done the past couple of years, because the borough was transitioning from being a city, and also adjusting to a new accounting system with new federal requirements for the auditors.
“The code doesn’t say random, that’s not even the right word,” Sorum said in a phone interview. “We started looking at business types and ended up with a charter company, a restaurant, a fur store, and a jewelry store.”
Sorum said he will suggest going back to annual audits in the future. “We should be doing it ever year,” and “if we can do a better job of selecting, we will.”
Moody explained this year’s selection process in an e-mail to the News: “Alan requested one particular company be selected because we have been working with them and have unresolved issues regarding sales tax deductions. For the other three, I was advised that historically companies from different categories are selected. Based on that, I separated the businesses by tour companies, jewelry stores and restaurants and did a random selection. I also looked at the list of businesses which have previously been audited and did not include them in the random selection.
“After the businesses were selected, the list was presented to the Finance Committee for approval and (chair) Dan Henry recommended a change of the restaurant that was originally selected.”
When asked at the Oct. 1 committee meeting about their involvement in the process, Henry said he had asked borough staff if there had been issues with another restaurant, and, after being told that was true, then suggested that the restaurant with past reporting problems might be a better selection, and everyone agreed.
Henry, along with fellow committee member Colette Hisman, own restaurants, and both noted that they have been audited in the past.
Both agreed with Sorum that the annual sales tax audits should resume, but they were fairly comfortable with the current selection process.
“It would be fine to put all businesses in a hat and pick four, but you may not get a diverse group,” Hisman said, adding “If something more exact could be put on paper, maybe that would make people more comfortable.”
They discussed the possibility of alternating business categories each year, but said the reporting for some, like rentals, are the same every year. Henry said it’s better that the marketplace does not know which categories are being picked from year to year, adding that if everyone is doing their books properly, then it should not matter who is audited. He suggested that the selections continue to be made by the manager and sales tax clerk.
Moody said the report from the auditors is not back yet, but it looks as if one of the four businesses will owe money, and one will get a refund. She added that one did not show up for their audit appointment in Skagway and had to travel to meet with the auditors in Seattle at their own expense.
Nathan Hartman, audit senior manager for Peterson Sullivan in Seattle, wrote in an e-mail that they do not advise boroughs on how to perform sales tax audits, what businesses to select, the manner of selection, or the frequency of audits.
“The Borough has their own methods – we just perform the agreed-upon procedures on the businesses that are given to us,” he wrote.
He said the same is true for other boroughs that they work for, and they are paid for the sales tax audits only in the years they perform them.
The News checked the codes for the Haines and Juneau boroughs, and they are similar to Skagway’s. Both allow sales tax inspectors to investigate books of businesses, and to conduct audits.
The Haines finance director did not return requests for additional comment on their audit selection process by press time, but Joan Roomsburg, sales tax administrator for the City and Borough of Juneau, e-mailed back a description of the CBJ audit program and its goals.
The program’s goals are to: have a fair administration of the sales tax laws; independent review of merchant records to provide reasonable assurance merchants are complying; and provide information and assistance to merchants to enable them to complete returns and pay taxes correctly.
“The CBJ, as I am sure Skagway, has limited resources to conduct audits so the audit selection should be tailored to meet the purpose or objectives of an audit program,” Roomsburg added. “CBJ does select random audits and has also selected merchants within a certain industry and/or has followed up on tips or concerns based on a merchant’s reporting.”
Pierce favors a random selection, saying they did so in Haines when she was there.
“Most local governments have discovered that the random process eliminates any perception of public officials having an axe to grind with an individual or business and it also levels the playing field as far as who gets audited and who doesn’t,” she wrote. “Here’s a novel idea: in addition to the audit, why doesn’t the city just advertise the fact that there is an upcoming random sales tax audit. This act in itself is known to increase the sales tax revenue.”

Cruising for a criminal

Burglar returned to Skagway for money, left it on ship, now at large

By ANDREW CREMATA

The crime took place on June 30, 2008.
The same day, Skagway’s Alaska Shirt Company called the police department to report the alleged theft of $78,000 from its safe. Upon investigation, the police had themselves a suspect. Unfortunately, before evidence against the supposed perpetrator could be collected and within days of the crime, the man fled Skagway. No one thought the suspect would be heard from again, but his strange saga says more about the criminal mind than any psychiatrist could ever explain.
Some might say he was a thief. Some might say he was a common criminal. All would agree he was criminally stupid.
Michael Hammond was a manager at the Alaska Shirt Company. A warrant is now out for his arrest.
Skagway Police Chief Ray Leggett describes the alleged thief as “sharp as a bowling ball.”
Hammond would live up to that moniker when he unexpectedly made a return trip to Skagway in early September aboard the Norwegian Star. A red flag went up at the local United States Customs and Border Protection office when Hammond’s name was on the ship manifest. Border officer Boyd Worley immediately called the local police department about the discovery.
“They can reach out in a manner we cannot,” said Leggett of the customs office. However, because the call came in after Hammond’s ship had left port, Skagway police were not able to apprehend the suspect in town. “We would have been on him,” said Leggett.
Upon docking in Seattle, every passenger on the Star was required to go through U.S. Customs and Border Protection, because all passengers who touch soil in Canada need to be cleared for reentry into the U.S. Hammond himself was cleared after nothing out of the ordinary was found on his person or in his baggage. But he made the mistake of trying to return to the ship.
Hammond explained to Norwegian Star personnel he had left a ring meant for his fiance and a watch in between the cushions of his bed for safe-keeping. He asked if he could retrieve the items.
According to the story told to Leggett, the ship officials laughed and said, “No,” that they would retrieve the items.
Upon examination of the room, a ring and watch were nowhere to be found, but inside the room’s safe was a bundle of cash totaling $55,000.
Hammond was detained by border officials for failing to declare the money. Leggett said the Skagway Police Department did what they could to have Hammond arrested, but “the District Attorney was not in a place to issue a warrant.”
After being interviewed, Hammond was released. The money was not.
Skagway police persevered, and eventually a warrant was issued for Hammond’s arrest late last month.
During the short interim, Hammond flew from Houston to Belize in Central America, and hasn’t been heard from since. Leggett said local police presume Hammond returned to Skagway in early September to retrieve his money.
“I knew he would, too,” said Leggett.
Leggett said the department is currently trying to get the seized cash returned to the Alaska Shirt Company. As for the future of the man affectionately referred to as “the dummy” by Leggett, only time will tell if he will make yet another appearance in Skagway, or even the United States.

Unchallenged incumbents cruise in Oct. 7 election

The Oct. 7 municipal election, with no real races, produced a low voter turnout on Tuesday. Only 143 ballots were tallied by canvassing on Thursday. For borough assembly, Colette Hisman received 130 votes, and Dan Henry tallied 107. For school board, Chris Maggio got 128 votes and there were 58 write-ins for Joanne Korsmo. All were incumbents and won new three-year terms.

Trish Sims, Buckwheat Donahue and Tom Cochran work the port booth in Whitehorse. Alan Sorum

Port plan completed, governance next

By JEFF BRADY
The Skagway Port Development Plan was officially unveiled in both Whitehorse and Skagway on Oct. 2 and received a warm reception from small audiences in both venues.
The plan touts the cost savings of the “Skagway Advantage” for shipping goods to and from the Yukon, and presents ambitious options for port expansion as more customers are attracted to Skagway.
The executive summary of the plan was reviewed by consultants Doug Player of CH2Mhill and Paul Levelton of KPMG in a Powerpoint presentation at the Opportunities North Conference in the Yukon that morning. Then the consultants and Skagway officials drove it down the highway for a program before the borough assembly that evening.
Skagway’s Paul Taylor, who has assisted the borough on port planning, said the program was “received very well” in the Yukon. Even though the Skagway program was moved to after a candidate forum and some of their audience was lost, it was presented “to the audience that wanted to hear us, and we were invited back,” he said.
The small audience at the presentation in Skagway was mostly made up of assembly and port planning committee members. It began an hour before the regular assembly meeting while the Palin-Biden vice presidential debate was still airing.
Former mayor Tim Bourcy, the chair of the port planning committee, said it was important to get the information out, calling the plan “pretty overwhelming in the grand scheme.”
The plan cites the opportunities ahead for the port from outbound mineral concentrates, major projects like the gas pipeline, and re-supply traffic over the highway or railroad.
The “Skagway Advantage” is shown in cost savings versus shipping through the port of Stewart, B.C. The cost per metric tonne for shipping ore to Skagway from potential mines in the Ross River, Yukon area are half that of shipping to Stewart.
In terms of re-supply (inbound) traffic, the cost of shipping to Skagway via an intermodal barge would be cheaper than trucking goods from Vancouver or Edmonton to Whitehorse over the Alaska Highway, the plan shows. If a rail-barge system were implemented, with freight coming in via rail from Prince Rupert, onto a barge to Skagway, and then back onto rail from Skagway to Whitehorse, the cost per tonne is significantly lower, according to the report.
In his short presentation on rail-barge possibilities, Taylor called it a “Yukon Freight Service Game Changer.” He said the rail-barge concept would cut freight costs to the Yuklon in half and would work for hauling pipe for the proposed Alcan and Mackenzie gas lines.
The plan presents six redevelopment options for the port. They range from expansion of the ore terminal buildings on its current footprint for a capacity of up to 300,000 tonnes, to construction of a new dock at either the south end of the railroad dock or southwest of the ore dock at the mouth of the Skagway River to allow for a capacity of 460,000 tonnes, and separation from cruise ships.
The latter would require moving the current TEMSCO helicopter operations, as would a more extensive expansion of the terminal area to handle a million tonnes a year.
Diagrams showing these options as well as tables outlining possible issues and costs are in the executive summary. For example, if tonnages hit 300,000 a year that would be at about the limit of what the highway can handle. The expansion options at that level range in cost from $42.3 to $135 million. There also is a potential for serious environmental issues with the options that have a new dock at the river mouth.
Copies of the executive summary are available at City Hall and the full report is online at www.yukonportofskagway.com.
Bourcy said the assembly should focus on the short term options in the plan and then grow the port, acknowledging there are aspects of the plan that could “create conflict in the community,” such as moving the helicopter operations closer to town.
To fully develop expansion options beyond the short term approach is not something the borough can do alone, he added, saying it would need to involve port partners and tap into state cruise tax money. He said there should be more community input but they should “leverage to create more port activity and more year-round jobs.”
Assembly member Colette Hisman was appreciative of the port plan and its presentation by the consultants on the big screen. “I see it as a road map,” she said.
One of the next steps is figuring out port governance.
Mayor Tom Cochran was at the Whitehorse conference, but missed the Skagway presentation due to a bad tooth that needed to be extracted. Upon his return, he e-mailed his thoughts on the port plan.
Cochran said the “Skagway Advantage” is aptly named and the plan shows it is more affordable for the mining industry to ship through Skagway.
“The Port Development Plan is an incremental development plan to grow the port to suit demand as opposed to investing in infrastructure on the hope of getting business. This plan has been presented to the appropriate potential users of the Skagway Port.
“Our next step in my opinion is to create a governance body for the Port,” he added. “This could be in the form of a Port Authority, a municipal board or commission, or some combination thereof. It will be difficult, if not irresponsible, to continue our port marketing and development without such a body in place.”

BOROUGH – RV park negotiations next week

Before going into negotiations with the Catholic Diocese for purchasing the old Pius X Mission property, assembly members wanted to know if they would need a voter referendum to approve the purchase of such a large tract of land.
The property, which currently is leased by the Garden City RV Park, is for sale.
At the Oct. 2 Skagway Borough Assembly meeting, Borough Manager Alan Sorum said the borough attorney had said that the code requires a vote of the people only when purchasing general obligation bonds.
The assembly scheduled a work session for 5 p.m. on Friday Oct. 17 with the Diocese representative.
One member of the audience supported the concept.
Mavis Irene Henricksen said the municipality needs more flat land for economic development opportunities, such as a vocational community college or senior housing facility across the street from the school.
“Seniors like kids,” she said. “They don’t like to get too close, but they like to watch kids.”
However, she noted that the RV park should operate until someone else steps up to operate one north of town on the old tank farm property, now owned by Jeff Hamilton.
To pave the way for purchasing the mission tract or any other property, the assembly passed first reading of a new property acquisition ordinance, suggested by the borough attorney.
“We didn’t have what we needed in code to do a land acquisition,” Sorum said.
Since the assembly received the attorney’s version that evening, assembly members passed it but said they may make changes at second reading on Oct. 16.

BOROUGH – Dawson gets seawalk after protests heard about late bid

The assembly on Sept. 25 decided against a recommendation by its manager and awarded the final phase of the seawalk project to Dawson Construction, the overall low bidder on the project.
The low base bidder was Admiralty Construction of Douglas, but its bid was submitted by fax due to bad weather on the day bids were due, Sept. 4. The two other bidders on the project, Dawson and Hamilton Construction, filed letters of protest.
In a memo to the assembly, Borough Manager Alan Sorum said Admiralty had conveyed its bid package to Wings in Juneau on the morning bids were due in the office by 4 p.m. Wings tried to fly several times that day, and a faxed modification to the bid was sent by 2 p.m. He said code allows the borough to waive inconsistencies in the bidding process, and there has been historic precedence for accepting late bids due to weather. He recommended going with the low base bid and negotiating the price on the alternates.
Admiralty had the low base bid of $1.53 million, while Dawson’s base bid came in at $1.599 million and Hamilton’s at $1.699 million. However Dawson had a lower cost on project alternates, and its total base bid with alternates was the lowest at $1.784 million, while Admiralty’s was $1.848 million and Hamilton’s was $1.989 million.
The engineer’s estimate for the project was $1.44 million for the base, and $1.723 million with the alternates.
In its letter of protest, Dawson cited the Admiralty bid being delivered after deadline, being incomplete, and that Dawson should be awarded the project since it had the lowest overall bid. The firm disagreed with the manager’s recommendation to negotiate, calling it “bid shopping,” which “is considered very unethical and improper by owners and contractors alike.”
Hamilton’s letter said the recommendation “cast doubt on (borough) administration and integrity of the competitive bidding process.” It said code allows for irregularities but not “blatant omissions or uncustomary delivery exceptions.” It said the contractor could have submitted the bid all day on Sept. 3, when Wings was flying, and said only bid modifications can be faxed on the day bids are opened.
During assembly discussion, concerns were expressed about the impression the municipality would be sending out by accepting a bid that arrived after the bid deadline. A motion was made to award the contract to Dawson and it passed 4-0.

SCHOOL – District Report Card highlights

The school district’s Report Card to the Public for the 2007-08 school year was unveiled at the Sept. 23 school board meeting. It shows the district made Annual Yearly Progress again with more than 95 percent of students proficient in language arts and 94 percent proficient in mathematics. These percentages exceed the state AYP goals of 77 percent in language arts and 66 percent in math.
In his introduction, Superintendent Michael Dickens noted Skagway students achieved some of the highest scores in the state on standardized tests.
“Our students consistently obtain exemplary test scores because of the outstanding teachers and staff at the Skagway School District who require high expectations in academic performance from each of our students,” he wrote.
The report breaks down the student test scoring by subject and percentages of those who were advanced, proficient, below, and far below.
In reading, 73.2 percent were advanced and 23.2 percent were proficient, while 3.6 percent were below and none were far below.
In writing, 35.7 percent were advanced and 57.1 percent were proficient, while 7.1 percent were below and none were far below.
In math, 44.6 percent were advanced and 48.2 percent were proficient, while 5.4 percent were below and 1.8 percent were far below.
In science, 52.6 percent were advanced and 21.1 percent were proficient, while 15.8 percent were below and 10.5 percent were far below.
Six of the 12 certified teachers have master’s degrees, according to the report. The district had an 89.7 percent attendance rate last year, and 88 percent of students in the senior class were graduated.

SCHOOL - Count period begins
The student count period began on Sept. 28, and the outlook is not good, Dr. Dickens told the school board. He expects it will come in around an average of 97 students when the count ends on Oct. 24.
This will be less than the 102 budgeted, which would kick in two things. The district will see a reduced state foundation funding rate at 101 or below, but if enrollment drops by five percent of what was budgeted, then it will qualify for “hold harmless” status whereby its budget would not suffer a big hit in one year. This policy was reinstated by the legislature last session.
“It shouldn’t be a huge problem for us, but it will be less money,” Dickens predicted.
He says some parents who are planning on leaving for the winter or moving have held off until after the count period, but he is worried about next year.
“We may have trouble getting to 90, which is alarming,” Dickens said.

PHOTO OF THE WEEK

SWAP MEET – It’s been called the new official beginning of winter. The annual clothes swap and garage sale at the Skagway Rec. Center brings out nearly everyone in Skagway to check out the “new old stuff” and catch up with friends old and new. Photo by Jeff Brady

• OCTOBER OBITUARIES: Richard Dick, Linda Hancock

• SPORTS & REC: Wilson powers to region title, girls team falters at regionals

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