Mayor Tim Bourcy, left, speaks with his “visual aids” – six years of borough petition documents – stacked on the floor. Seen at the table are LBC staff member Dan Bockhorst, Assistant Attorney General Mike Mitchell, and LBC member Bob Hicks. Photos by Jeff Brady

The Skagway borough tango

Strong case made during three-day hearing before LBC, decision coming on Dec. 12

By JEFF BRADY
After three days of inspired testimony here Nov. 27-29 before the Local Boundary Commission, Skagway officials felt they had presented enough factual evidence and answered enough questions for the LBC to grant their petition to form a Skagway borough.
“Let us go!” pleaded Mayor Tim Bourcy, pounding the table at one point.
“Why not?” stated a more subdued City Manager Bob Ward.
But the LBC was not ready to act, and postponed its decisional meeting until Dec. 12 in Anchorage. Ironically, the meeting will be held prior to a previously scheduled review by the LBC of new draft regulations that could change the whole landscape for future borough formation.
The Skagway decision must be based on existing standards, and cannot be deferred, said staff member Dan Bockhorst of the Department of Community and Economic Development. This means, if it loses, Skagway would have to petition again after the new regulations are in place.
City officials, local residents and several expert witnesses from all over the state said Skagway’s case was strong enough this time around.
The LBC members said they were leaving town impressed with Skagway’s presentation, but one of the five-member panel was not here and needed to review the hearing transcripts and material. Members also requested an attorney general’s opinion on whether they needed to act on all 18 standards for borough formation – or just the ones left unsatisfied from the 2002 hearing.
Assistant Attorney General Mike Mitchell sat quietly throughout the proceedings taking notes. At the close of the hearing, he thanked the city for its hospitality and was impressed with how the historic nature of community was conveyed with passion. He acknowledged the frustration, but said that each of the LBC members at the table will approach their decision “in good faith and to the law.”
Not on their table was an LBC-imposed geographic size in a series of “fundamental standards” from the 2002 decision against Skagway that Superior Court Judge Patricia Collins threw out last year – a ruling that remanded the matter back to the LBC. The commission could have proceeded without a hearing, but most of its membership had changed since 2002, and members stated several times that they wanted to hear all the evidence.
What follows is a review of the hearing in mostly chronological order, summarizing the testimony and debate, which was extensive. Most witnesses were before the LBC for 45 minutes or longer.

Most city challenges tossed aside
Before the hearing really began, the city put forth seven separate motions. The first two tried to have LBC Chair Darroll Hargraves and Vice Chair Robert Hicks excused for alleged bias.
The city said Hargraves had used his position to bring in the testimony of Alaska Constitutional Convention delegate Vic Fischer, but Hargraves and others said it was city lobbyist John Walsh who initially contacted Fischer, and then Fisher contacted the LBC saying he wanted to testify. However they had no explanation for why Fischer was allowed to see a list of city witnesses. The city asked Hicks to be excused because he pushed to have the hearing before his term was up in January 2007. But Hicks said the city did not respond over a two-week period last summer to a request for dates, and that the matter had dragged on long enough. At the end of August he said “rather strongly” that the hearing should proceed in four-six months.
Both men defended their records for being fair listeners and were backed up by the others at the table.
The city also asked to be able to swear in and cross-examine staff member Bockhorst, who had written a state supplemental report recommending against granting Skagway’s petition (see Sept. 22 issue). This request divided the LBC.
“They are correct that he clearly opposes the petition,” Hicks said. “... But we aren’t a bunch of pawns,” adding that Bockhorst works for the state and does not make recommendations “on behalf of us.”
Others said if witnesses have to be under oath, then why not staff, but it failed on a 2-2 vote.
The city asked for permission to be able to cross-examine Fischer, and that request passed. Commissioners made it clear that Fischer’s testimony was unsolicited. Hargraves said Fischer had contacted him and felt the matter was important enough that he didn’t want to be limited by the three-minutes for public comment. He asked to be added to the witness list, so he could address the petition. “This came out of the clear blue sky,” Hargraves said. Hicks chided the city for its “McCarthyesque” tone. “You don’t get your point across effectively by pointing fingers.”
The LBC then voted to accept the city’s 24-page response to the DCED report. The city’s response was submitted to them on Nov. 20. They then took a half-hour break to read the paper, which refuted several assertions in the DCED document about community size which would be the subject of intense grilling over the next three days.
However, the LBC denied a request that the entire 2002 record, the 1979 annexation of Dyea, the Yakutat and Haines borough proceedings, and other documents be added to the record in this Skagway case. Members said the late (Nov. 24) request was for materials already in the public record that they have access to.

Bockhorst vs. LBC vs. Blasco
The LBC then heard a presentation from its staff person, Bockhorst, who stated that the overall conclusion of the 2002 commission was unchanged – that Skagway did not meet all of the required standards for a borough. While the Superior Court threw out the LBC’s fundamental principles and imposed geographic size restriction, he said the Skagway borough did not satisfy the constitutional intent of large regional boroughs, nor did it satisfy other requirements in statute. He said Dyea was not a second community since it had no school, library, or its own voting precinct. He also said Skagway’s official population of 834 did not satisfy the standard of “at least 1,000 people” to be large and stable enough to support a borough. But Bockhorst drifted back to the size argument, saying it would take 50 Skagways to fill the Chatham REAA. When looking at the standard that says the borough formation must be “in the best interest of the state,” he said. Skagway already is at maximum self-governance as a first class city, and said a “single community borough government” will not lead to the state’s desire for minimal self-government units.
Under questioning, Hicks reminded Bockhorst that the Superior Court declared geography off limits, “no matter what the constitution and statute says.” As for the reference to the REAA, Hicks said that if the borough is not to be part of an REAA, then the Department of Education must be consulted. Zimmerle said Bockhorst’s conclusion that “Skagway did not provide a suitable alternative” was false without contacting DOE first. Bockhorst admitted the error. Later in the hearing LBC members directed Bockhorst to make that contact before the decisional meeting.
In regard to a statute about new school districts needing 250 students, Hicks asked if the dissolution of the City of Skagway meant it was requesting a new government. Bockhorst said, “In my opinion, it does.” Hicks said that would raise another question for the DOE: Would Skagway still have its school district?
Commissioners also quizzed Bockhorst on the population standard. Hicks said his read was that if an area was under 1,000, then “it would have to have a specific and persuasive argument to the contrary” to show it was large and stable enough. Bockhorst agreed, noting that the permanent population, which statutes require him to follow, was down 51 residents from 2002. But commissioners Zimmerle and Harcharek said the summer seasonal population must be considered. “I don’t agree with the department’s report about population,” Harcharek said.
Dyea also came up in questioning, as to where DCED drew its lines. Bockhorst had Dyea starting at Mile 7 of the Dyea Road, but commissioners noted that the petitioners were starting at Mile 4.5, the so-called “end of pavement.”
Early in his presentation of the Skagway case, City Attorney Bob Blasco reminded everyone that the 2002 LBC said Skagway satisfied the standard for multiple communities. “I hope the commission will follow through on that,” he said. “The supplemental report takes a different stand.”
He also stated that the previous commission found Skagway was “large and stable enough to provide borough government in the area of the petition.” It was when the previous LBC applied its own fundamental principles to the size of the Skagway area, that the petitioners failed. But the court said that decision was wrong since the fundamental principles on geographic size were adopted without public hearing or due process. “I’m asking that we not have to redo standards that we clearly met,” Blasco said.
He then asked a question that would be echoed over the next three days: “Why can’t this area be a borough if it provides all the services that a borough provides?”
In terms of “best interest of the state, Blasco highlighted the fact that Skagway City Council, by resolution earlier this year, had waived the need for a $600,000 borough transition grant from the state.
Hicks, a former city attorney from Seward, questioned the move, saying it may not have been in the city’s best financial interest, and that a resolution was not binding and could be overturned by future councils.
But Harcharek said the resolution had the opposite effect on him. “The petitioner is determined to prove to the state that it’s in the best interest of the state,” he said. “That note rings in my head all the time.”
Zimmerle agreed that proving “in the state’s best interest” was a monumental part of the process, but Hargraves said he hoped the final decision would not be based on the $600,000. Blasco said the city passed the resolution as a reaction to the DCED supplemental report. “It’s important to have something, and this community offered to do that,” he said.
Blasco finally asked the commissioners not to go down the two roads of geographic size and fundamental principles prohibited by the court.
“In light of that, then what?” Hargraves asked.
“To be blunt, grant the petition,” Blasco responded, adding that the city “factually met every single standard.”
The city lined up an impressive list of 22 witnesses from Skagway and around the state, including Jack Coghill, another Constitutional Convention delegate, who hugged Fischer as he walked into the room after driving in from Nenana. Fischer, testifying on his own, would be sandwiched between the Skagway testimony.

The Witnesses Round One: Elliott, Dickens, Tillion
First up Monday night was part-time Dyea resident Skip Elliott, a former city manager and mayor. Elliott outlined the history of the Dyea annexation, which he fought. Ultimately, the LBC in 1979 allowed the annexation so the city would be able to acquire more municipal entitlement lands. Through it all, Elliott said “Dyea was its own community,” and, given the chance, would have defeated annexation if it was left up to just the Dyea residents at the time. He also cited the two units of Klondike Gold Rush National Historical Park: Skagway and Dyea, adding that they are “two communities with common interests ... what they don’t want to be is in Haines” or tied to the Chatham REAA. As the city’s financial planner, he said Skagway is in better shape than other boroughs and some large cities in the state, due to its great summer wealth and bigger population, enabling it to make a higher-than-required local contribution to its school district.
Skagway City School Superintendent Michael Dickens said he didn’t see Juneau or Haines ever trying to take over his district, but a borough would offer protection. He said his school’s high test scores were enviable, but they would be absorbed in a larger district. He said Skagway’s situation was similar to Yakutat, which formed its own borough in the 1990s. He said Dyea students were considered different from others, because, without a bus service, the district pays part of their transportation costs to attend. However, he was grilled by Commissioner Hicks for statements he had made at a board meeting early this fall about Skagway’s declining enrollment. Dickens acknowledged that he had said a continued lack of winter work could be a “precursor to a dying community,” but noted that he made the statement before recent news broke about the ore terminal reopening in May or June 2007. Dickens said he felt enrollment was at a “low point” and the town would grow, but Hicks said he also was concerned about a trend of numbers dropping in lower grades. Dickens cited the number of home school students in the community – about 20 – which were not counted. He said the school has a capacity for 250 students.
Former State Senator Clem Tillion testified by speaker phone from Halibut Cove. He said he had helped draft some of the model borough legislation, and noted that the proposal was “a small one.” However, he said the commission could make it bigger because of the Juneau Road issue, giving Skagway the east side of Lynn Canal down to Berner’s Bay. He said that land was not contiguous to Haines. Skagway should be made a borough now, “because there is no way
a city is going to reach down there at a later date.” Hargraves thanked Tillion for “shining a new light for us.”

LBC members take a break to have their picture taken with Vic Fischer and Jack Coghill, two of the four surviving delegates to the Alaska Constitution Convention. From left are Bob Hicks, Fischer, Georgianna Zimmerle, Bob Haracharek, Coghill, and Darroll Hargraves. JB

The Witnesses Round Two: Nordale, Williams, Kalen, Stewart, Phillips, Coghill, Cassidy, Rose, Gorsuch, Bousson, Wasserman, Harris, Selmer
The commission returned Tuesday morning and first heard by phone from Fairbanks’ Mary Nordale, a former Department of Revenue commissioner, and clerk of the House of Representatives in the first state legislature. Her mother was a delegate to the Constitutional Convention and she remembers her going over the constitution word-for-word. One of the most creative parts was the local government section for its flexibility and responsiveness. “The creation of flexible borough governments was a major stroke in the way Alaskans desire to live,” she said. As a Reapportionment Board member in the 1980s, she said it was difficult to put communities in legislative districts where they all had a common interest. However, she said it seems the LBC, by allowing the annexation of Dyea and a different tax zone, “already created the Skagway borough, except in name.” She urged approval of the petition. As for merging Haines with Skagway, she said it should be “organic, not forced,” adding that the two cities have different histories and purposes. “To suggest they can work together seems staggeringly misplaced.”
Commissioners spent more time with Nordale than most witnesses, trying to answer more “best interest of the state” questions. When asked about enrollment and community size, she kept going back to a premise that “the best interest of the state is when people have confidence in their local government.” Local school attendance was not important “when Skagway is supporting them.” Skagway has the resources, and the borough form of government “gives them the opportunity for the future, which the city form of government does not.” Retired Ketchikan, Wrangell and Petersburg publisher Lew Williams Jr., a founding member of the Southeast Conference, testified next. He said putting Wrangell and Petersburg in the same model borough will never be accepted because of differences like those between Haines and Skagway. The trend has been for larger, single-city boroughs like Ketchikan-Saxman and Juneau-Douglas. “Alaska may have a lot of single city boroughs, and what’s wrong with that?”
Longtime Skagway resident Barbara Dedman Kalen testified that she was happy with the form of government. “Skagway was the first incorporated city over 100 years ago and we’ve done a good job of governing ourselves,” adding that she didn’t know if a borough would be any better, “but if it makes everyone happy to be shoe-horned into a borough, then go ahead and call us a borough.”
Another Constitutional Convention participant was next. Retired Judge Thomas Stewart of Juneau was reached by phone in Indiana, where he is writing a book about the convention. He was its clerk and quoted from the constitution’s local government Article X: “The purpose of this article is to provide for maximum local self-government with a minimum of local government units, and to prevent duplication of tax-levying jurisdictions. A liberal construction shall be given to the powers of local government units.” He then quoted from the borough section: “The standards shall include population, geography, economy, transportation, and other factors. Each borough shall embrace an area and population with common interests to the maximum degree possible.” Stewart said other factors can include Skagway’s unique topography. “No other communities are similarly situated.”
Hicks asked how the LBC can view Stewart’s testimony as a clerk versus that of Fischer, who was on the local government committee. Stewart said Fischer was closer to the proceedings, “but if he says ‘no’ (to a Skagway borough), I beg to disagree.” He also cited possible inclusion in the Haines Borough as a threat in the minds of Skagway people, but Hicks said the LBC can’t use “warding off Haines” as a reason to approve a Skagway borough. Stewart said they can approve it based on what the superior court judge handed back to them.
Former Speaker of the House Gail Phillips was next on the line. She said her familiarity with the commission and local government issues have taught her to respect community wishes. “The state wants boroughs,” she said. “Skagway being united in wanting to be a borough is not only encouraging, it’s quite rare.” Hicks asked why there needed to be a commission if decisions should be up to local preference, and Phillips answered that Judge Stewart had explained the role of a borough in extending services to people in outside areas. But Hicks stumped her when he said there were no people outside the city here.
Former Lt. Gov. Coghill was next and carried a copy of the constitution to the table. He read from Article I, focusing on this section: “All political power is inherent in the people. All government originates with the people, is founded upon their will only, and is instituted solely for the good of the people as a whole.” He added that Article X sets up the structure to establish boroughs under this principle. “I support the petition,” he said. “I support the fact that the Skagway area would like to create their own borough.”
Coghill added that other single cities – including Nenana – were looking at expansion toward boroughs if the Skagway petition is approved. Hicks agreed with Coghill that there was noting in the constitution or regulations requiring two communities, but that if a petition does not have two, then there is a slightly higher burden of proof. They agreed there should at least be two settlements. During a lengthy discussion about the role of the commission, which was established in the constitution, Coghill said they have to act like a judge, “applying the constitution as the highest written standard.” To that, Hicks questioned whose interpretation they must follow, and Coghill would go no further. “Vic (Fischer) will probably get even with me tomorrow.”
Hicks stated the commission’s dilemma: “Between the constitution and us are filters... what’s in the best interest of the state. I don’t have a good definition of what that is.”
Commissioners took a short break to have their pictures taken with Coghill and Fischer, who would testify later.
Dyea Road resident and City Councilmember L.C. Cassidy said Coghill was a hard act to follow, but quipped that she would be available for pictures afterwards. She explained the various neighborhoods “out the road” to Dyea and said the report from the state was “very misleading and some found it offensive” in its allegations that there were no “characteristics of neighborhood living.” In her neighborhood from Long Bay up to Dyea Point, there were close to 24 people in the summer, not the seven in the report, and it will grow toward Dyea with the new subdivision. A community vision has created a new Residential Low Density zone for the area, which will include a small park on the point and fire department substation.
Carl Rose, former Skagway School Board president and now executive director of the Alaska Association of School Boards, described how Skagway pulled together after the railroad shutdown and created an even stronger tourism economy. He said the city is now on par with the North Slope, Valdez and Unalaska, contributing 55 percent of its school’s budget. Allowing the district to be absorbed by a larger borough, such as Haines, would boost the state’s contribution. He said model boroughs were a good model at one time, but “today we are in reality. Those that can tax have boroughs, with the economic engine to tax.... Skagway is willing to pay its way.” He said the mood of the legislature is toward more local contribution. When questioned about the current enrollment decline, Rose said it was hard to nail down trends when three kids moving to town can change the whole perspective. He said the switch from city to borough should result in “no change in status” for the school district.
Former Attorney General Norm Gorsuch was next on the phone. He served in the Egan and Sheffield administrations, and is now a lobbyist for Kodiak. He said Skagway was an “integrate socio-economic unit” that has demonstrated it can “perform all of the functions a borough would perform.” He said he didn’t see a problem with the local community seeking a change in status: “I don’t see it as difficult as you are making it. You can grant it on your prior information.”
Zimmerle said the LBC needs an opinion on whether it needs to look at all 18 standards this time around, or focus on those not met the first time around. Hicks said the size factor was woven into those and unraveled the reasoning. To this, Gorsuch said, “You have to look at the facts in front of you without the square mileage. The other factors stand on their own – there is ample record in front of you.”

Dyea’s Dennis Bousson talks about “community.”

Some of the most enlightening testimony came next from Dyea Community Advisory Board member Dennis Bousson. He said there are lots of Dyea places in Alaska. He said there used to be an old joke that “Dyea was full of hippies because there’s no work there.” But in recent years, a lodge has popped up, horseback and dog sled rides, rafting tours, and Dyea jobs with the National Park Service. And if you are looking for a store, “come to my store,” he said, where he has two of everything that anyone can take as long as they replace it. “It’s not a true definition of a store, but it is a definition of community.” And if the Hosford’s lodge had a bar, it would be a “hopping place.”
He said while some in the community view Skagway as an equal to Haines, Skagway helps out its neighbor with the advisory board, and when disaster strikes. He pulled out a July 2002 newspaper describing how a glacier moraine collapsed into West Creek lake, sending a surge of water down to the valley floor and flooding several homes, including his. Bousson was on a Yukon river trip at the time, and learned of the incident by phone, but by the time he returned a few days later, his place was cleaned up due to efforts of his son and neighbors. “That’s my community.”
The city then got the state to declare a disaster area but did not wait for state funds and obtained an emergency order to clear debris from the creek and construct a dike to prevent future flooding. “I’ll never be able to pay back in taxes what the city put out to save my home,” he said.
All four commissioners said they appreciated the enthusiastic testimony. “You just portrayed a view that the previous commission did not get,” said Harcharek. “A unique presentation for the community of Dyea.” Zimmerle added that Bousson hit on nearly all of the standards.
Kathie Wasserman, a former Pelican mayor and the new executive director of the Alaska Municipal League, said AML has 40 members that are on a borough committee that will help the LBC draft its new regulations. In the meantime, though, she urged the commission to grant the petition. The difference between a first class city and a borough lies in a borough being better suited to go after federal funds, she said. “If the community is healthy, provides jobs, and has a stable tax base - 834 versus 1120 residents does not matter,” she said, adding that the LBC was within the Division of Community Advocacy and should be in a position to help. “It has turned into an adversarial thing.”
Local resident John Harris echoed Bousson’s testimony about a strong community. He said he still has no idea who left his family a turkey on his doorstep for their first Thanksgiving after moving here from Wasilla. “We are the sort of community that can take care of ourselves,” he said. “Financially there is nothing the state will have to worry about.” He said there was no reason for Skagway not to be a borough, and that the LBC can look at petitions on a case-by-case basis. “Like kids, they’re all different.”
Stan Selmer, former mayor and now manager of Alaska Power and Telephone, said he found some counties in Texas with less population and fewer square miles than Skagway. He said the city in the summer, between cruise visitors and workers, serves 5,000 people a day. He said it confounded him that “with a community of this size and stability and wealth that we should find ourselves at odds with anyone.” Commissioners learned that his company provides power from two area hydro sites to Skagway, Dyea and Haines, with a third under construction.

Witnesses Round Three: Fischer’s Testimony
The city interrupted its list late Tuesday night to allow the testimony of Vic Fischer, UAA professor, former state senator, and one of four surviving delegates to the Constitutional Convention. He said he was active in the writing of the local government article, had written a book on the convention, and participated in several talks about the convention over the past 55 years. This included a 1996 panel with Stewart and others that was moderated by Hicks.
Fischer said his focus has been on the sentence in Article 10 that states: “Each borough shall embrace an area and population with common interests to the maximum degree possible.” The key word, he said, was “embrace.” Referencing the Yakutat case which he supported in the early 1990s, he said that the local government committee “had in mind that boroughs would be regional in character.” Yakutat’s region was between Southeast and Prince William Sound, he noted. He said he agreed with Tom Stewart that Skagway was a unique situation and that there was no large size restriction in the constitution, but that his colleague was “completely wrong” about the constitutional committee saying it did not envision the “large boroughs we have today.” Fischer said they envisioned regional boroughs between the cities and the state.
Fischer said he agreed with Wasserman that it was time to “step back and look at what we’re doing... before we take more jumps and create more problems.” While impressed with the local testimony and their commitment for wanting what’s best for the community, he said it is a fallacy to believe a borough is more of a maximum form of local government than a city. The next best step, he said, would be a home rule city. “With respect to maximum self government, home rule is it.” He said the state’s best interest is making the local government system work, but he did not think changing Skagway to a borough would make it work.
Harcharek suggested that the creation of the Haines Borough in 1968 created an enclave situation for Skagway, and that in order to embrace an area to the maximum degree possible, “wouldn’t it be justifiable to create the Skagway Borough?”
Fischer responded that the point raised by Clem Tillion about the road and other future expansion in the region was a cause for the commission to step back and look at Southeast. “The rest of Alaska outside the panhandle is easier to manage.”
But Fischer said the constitution “has been ignored to date and you or whoever can ignore it in the future and have more Bristol Bay Boroughs established.” He said the city could negotiate with Haines to take in part of its borough for a northern Southeast borough. Zimmerle responded that the LBC had to make a judgment call in the Skagway case, but that it still had the quagmire of the unorganized borough to deal with. Fischer said he would love to help.
In cross-examination by City Attorney Bob Blasco, Fischer was asked how certain standards apply to Skagway. He said an area with under 1,000 residents can be allowed “if they consider this a logical borough.” He also agreed that flexibility was needed and that the LBC has the authority to change boundaries. But he did not see Skagway as a region. Nor did he see Haines as a region. Ideally, he said, boroughs should be new at the time of establishment.

Vic Fischer reads from a transcript of statements he has made on borough formation.

Testimony Round Four: VanAltvorst, Walsh, Galstad, Wrentmore, Bourcy, Ward
The city’s final list of witnesses used up most of Wednesday, as the snow fell and kept commissioners from making afternoon flights. Jim VanAltvorst, a local government specialist who had worked with Ketchikan issues for years, said he had studied the DCED supplemental report and “felt something was amiss.” He said the report’s tone showed a “lack of objectivity” and urged the commissioners to be flexible and “look at the need.” He then quoted Cicero: “The good of the people is the greatest law” and said testimony from the previous day had been convincing. “I heard community and I see strong community.”
John Walsh, a member of the Douglas Advisory Board, stressed he was not testifying in his role as the city lobbyist. He said his grandfather was a Constitution Convention delegate from Nome. From his reading of the transcript of the 1996 panel with Fischer and Stewart, he said a question was raised about why the LBC was in the executive branch. He
then said Article I, which Coghill highlighted, keeps “a local string attached.” Walsh added that the court decision showed the LBC that “you can’t wallpaper” and must go through regulations, statutes and the public hearing process. Walsh then showed a newspaper from earlier this year when then-Gov. Frank Murkowski came to Skagway and stated, after being questioned by the public, that he supported a Skagway borough. At that point, LBC Chairman Hargraves interrupted Walsh and said the commission has to arrive at an autonomous decision and “can’t be influenced by any political persuasion.” Walsh said the LBC should look at Skagway as a city of 1,300 to 1,700 in the summer, when it’s a major cruise destination with a small clinic that has to be ready to handle incidents like a Norwalk virus outbreak. Hicks said he agreed with Walsh’s “wallpaper” statement, and that Walsh, as the city lobbyist, should come forward and help the commission draft new regulations “to give us the flexibility that the people are asking for.”
Nancy Galstad, a former LBC commissioner who served during the Yakutat borough decision in the 1990s, was next. She questioned the earlier description of Skagway being an enclave, since it was bordered on one side by Canada, and said it satisfied the standards for becoming a borough. She said the superior court’s remand made it clear that “one size fits all is not a basis for standards.” She added that it was time to review the relevance of REAAs and model boroughs boundaries. “They are outdated and don’t work,” she said, and have been a “disincentive for more borough formation.” Hicks agreed, saying some on the commission had come to the conclusion that the model should disappear unless it is reviewed every couple of years. “That’s good to hear,” Galstad replied.
Skagway businesswoman Jan Wrentmore, who owns property on the Dyea Road and across the bay at Burro Creek, disputed the $477,000 evaluation figure of Dyea property in the state’s report. She said her Dyea road property, just past the pavement, was assessed at $370,000. She has been approached to sell lots at Burro Creek, which could be the start of another neighborhood. She also clarified the Juneau Access issue for the commission, explaining that the DOT backed off building the road all the way to Skagway when it could not get past a federal ruling that stated a road can’t cross a historic landmark if a reasonable alternative – the ferry system – is available. Federal law would have to change for the road to come to Skagway, and the state’s chief lobbyist has said that is unlikely. With the road going only as far as Katzehin, there was no need at present to redraw the lines, she said, and as for Skagway’s status, “It seems we are a borough in everything but name only, so I say give us our letterhead.”
Mayor Tim Bourcy had sat through two days of testimony, and brought two large stacks of documents from his office to set before the commission on the floor of the council chambers. He said it represented all the work the city has put into borough formation since 2001. In his spirited testimony, he focused on the history of the area from a Native trading area of two river valleys to the Yukon’s “port of choice,” the history of the late Rep. Morgan Reed’s effort at statehood to withhold the Skagway area, and “the history of what I believe is a violation of the public process in dealing with the Skagway borough petition.” Within the Skagway area, which was created during the 1979 annexation of not only Dyea but all of the land between Haines and the Canada border, are National Park Service, National Forest Service, and Bureau of Land Management lands. That annexation created the Skagway borough, he said. “We are asking for recognition.”
He said regulations and decisions written by staff or attorneys have taken away the flexibility of maximum local self-governance and “put it in a box.” As the incoming president of the Alaska Municipal League, he said there is a recognized lack of incentive for borough formation. He said Skagway challenged the LBC’s adoption of fundamental principles without due process and its application to standards in the original 2002 decision. “You broke the law,” he said. “We had to go to court on our nickel. It was wrong and they kicked it back.”
As the Yukon’s port, he said Skagway includes: WP&YR , the only unsubsidized tourist railroad in the country; AP&T, which has three hydro projects; Petro Marine, which hauls fuel north to BC-Yukon-NWT; Alaska Marine Lines, which hauls all of the Yukon’s cigarettes and liquor; and the Skagway Ore Terminal, owned by the state’s Alaska Industrial Development and Export Authority, which will be back on-line June 1 with minerals from Sherwood Copper’s mine. He highlighted the council’s decision a few years ago to keep the ore terminal as an industrial area, and not turn it over to tourism development. “We are working on diversifying our economy and we have this coming back.” Bourcy said he disagreed with the “declining population” figures in the state’s report, but acknowledged Skagway has been a “victim of its own success.” With little land to buy currently, summer people who want to live here year-round are forced to venture elsewhere in the winter, he noted. The city is working on that problem with the creation of the new RLD zone and land sale next year. Although the market value of the lots may be high, he said the city can offer reasonable terms to attract first-time buyers.
Finally, he said no one from Haines had come to Skagway to object to the petition or request Skagway be taken in by the Haines Borough. As for that suggestion, he said, “Lock your doors and get your weapons.” Bourcy closed with this comment, pounding the table: “Let us go! We will not let you down.”
City Manager Bob Ward was the final witness, likening his role as a sweeper on a ski slope picking up “straggling bits.” He addressed these points: 1) Skagway should not be with Haines and the Fischer explanation of regional boroughs was “not the direction of the day”; 2) the $600,000 grant is not needed to accomplish borough transition, does not cover what would be lost to the school district, and its waiver should not be perceived “as a mark against us”; 3) the state contributes $800,000 to the school while the city contributes $1.3 million – a figure that includes money for computers, activities and a lunch program above what’s required by the state; 4) Skagway’s voter list remains high at 909, meaning more people are calling it their “residence of interest” and the housing issue is being addressed with the land disposal; 5) if Skagway were with Haines, local control of the school would be lost and administrative costs would not be reduced; 6) he had done his own consultation with DOE – his sister, the deputy commissioner, and others in the department – and Skagway’s school district is not likely to become part of Chatham, nor would have to disband with less than the 250 students required for new districts; 7) Not many services would change, but the state may proceed with turning over maintenance of Class B roads (Dyea and Liarsville) to the new borough; 8) he said his “mea culpa” was expanding Skagway to five tax zones from the four prescribed in 1979 (LBC staff and commissioners later said there is nothing in law that prevents it). The valuation of property in those zones is as follows: 1- $63.7 million, 2- $146 million, 3- $24.25 million, 4- $16.7 million, 5- $518,500; 9) Skagway chose to annex Dyea in 1979 to get its entitlement lands and that “one single action made us a borough fundamentally”; 10) the first 932 acres of entitlement lands is in city hands and a new zone and final subdivision plat are in the works for a 2007 sale.
In closing Ward modified a famous quote from President John F. Kennedy: “You look at our position and say ‘why,’ we look at our position and say ‘why not?’”
Under questioning, Ward was asked by Hargraves about the precedent the LBC might be setting if the Skagway petition is granted. Ward said future petitions from other communities would not resemble Skagway’s 834 population and $240 million tax base.

Closing Arguments
Blasco chose the Rolling Stones’ “Not Fade Away” and “This is a Struggle” for his closing themes and summed up the city’s testimony with these points: 1) the Collins court decision was not appealed by the LBC; 2) opposition has not arisen from Haines, Juneau, or the Dept. of Education; and 3) the standards were written with the word “may,” not “shall,” giving the LBC flexibility.
Like Ward, he also went through a long list of points, repeating testimony by others. He noted that the drop in student enrollment was a nationwide trend, but when factoring in the number of home school kids, the student population in Skagway was the same as in 2002.
As for accusations directed to staff, he said it started when the city’s representative went to the staff “and was told ‘you are never going to be a borough.’” He also questioned the right of the state to spend thousands of dollars “in opposition to a petition with no opposition.” He said the 1979 record will show Skagway should have been a borough “all this time” and that it should not be difficult for the commission “to say ‘yes’... that the factual record truly supports the granting of this petition.”
Members bristled over the alleged staff accusations again, saying they rely on Bockhorst’s professional approach to technical issues. Hargraves said he has voted against staff recommendations half the time, and members “are not under the thumb of the staff person.”
Harcharek, who was on the commission in 2002, said that after the remand from Superior Court Judge Collins, “I didn’t have to twist many arms to hold a new hearing.” But he noted there was no “deja vu” this time around. “I feel comfortable leaving here and making a decision, I was not comfortable before.”
Hargraves noted that there were three letters of opposition to the petition in the record from Fischer and Sen. John Torgeson of Fairbanks, but that opposition was “not substantial.” The commission allowed other written testimony from Skagway witnesses who were unable to attend or be reached by phone.
Hargraves added that four of the five commissioners were new and needed to hear all the evidence.
“We’ve learned a tremendous amount,” he said. “I can assure you we will peel this onion very, very carefully.”
Hicks said the quality of the local government is not the issue, they have to go back to the standards. But he was impressed with the testimony. “You may have people moving down here.”
Zimmerle said she was not ready to make a decision and requested the legal opinion on which standards the LBC needs to consider – all of them or the ones left unsatisfied from the 2002 decision. Absent Commissioner Tony Nakazawa also needed a couple weeks to go over the material.
The decision was moved to the commission’s Dec. 12 meeting in Anchorage. It will start at 8 a.m. and will be teleconferenced to Skagway City Hall.
Commissioners said it will be a long meeting, since they also are supposed to go over new draft regulations.
In a discussion with Fischer, Hargraves said new regulations should be in place by June 30. Fischer said no new petitions should be accepted before the new regulations are in place to avoid “the same tango as with Skagway.”

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