August 26, 2011 • Vol. XXXIV, No. 15

Backpack Bounty

Zoe Wassman passes out food to her group at Finnegan’s Point after carrying it 5 miles up the Chilkoot Trail. See more from the hike organized by the Skagway Rec. Center in our Chilkoot Trail Kids Feature.

Photo by Katie Emmets



Smoke control law enacted by voters

Borough ordinance survives test by huge margin

By KATIE EMMETS

Second smoke will be under control in Skagway after voters overwhelmingly approved a borough ordinance in Thursday’s special election.
Once certified by the Skagway Borough Assembly tonight, there will no longer be smoking inside most public places in Skagway.
Those who voted in favor of the secondhand smoke ordinance totaled 324, while 122 residents voted against it in ballots cast on Aug. 25.
Election official Frank Wasmer said there are 27 absentee ballots and two question ballots, which have not yet been added to the total. The will be tallied by the Canvass Board today at 4 p.m.
“Even if they all go one way, it would not be enough to change it,” Wasmer said.
Skagway Borough Assemblyman Dan Henry was in the assembly chambers when the results were announced.
“I think it’s a pretty crystal clear message from the voters,” he said.
Henry, who was a smoker for 35 years, fought to bring the vote to a special election rather than waiting until the October 4 regular election.
“There are issues that come to the assembly that, more often than not, can wait till after the season is over,” he said. “In this case, the air quality was at stake and the original action spearheaded by Colette Hisman was put in limbo because it was appealed (by petition). So let’s bring it to a vote – now.”
Following the Canvass Board’s meeting, the assembly will meet in special session at 5:30 p.m. to certify the election.

UPDATE: The final vote count, as certified by the assembly on Friday night, was 343 Yes, 131 No. The secondhand smoke control ordinance is now law, per state statute. The municipality sent out a No Smoking Public Notice on Monday, Aug. 29.

Candidate pool looking thin

Stan Selmer seeks return to mayor’s seat

By KATIE EMMETS

After the August 15 deadline, four candidates had filed for five public office seats.
Filing for the two-year term position of Skagway Mayor is former mayor Stan Selmer.
Selmer’s mayoral terms lasted from 1989 to 1995 when his diagnosis of diabetes stopped him from running again.
Selmer said his diabetes is no longer hindering him from holding public office.
“Skagway is at a crossroads again where we have the opportunity to renew a year-round economy,” Selmer said of why he is running again. “Tom Cochran did a great job of getting us where we are, and I want to be the person who helps bring up the industrial economy while preserving the tourism economy.”
Selmer’s six years as mayor saw the reopening of the White Pass & Yukon Route for tourism purposes and a sprinkler grant program, in which the municipality picked up some of the cost of sprinkler installment. The goal of the program was to install sprinklers throughout Skagway’s entire Historic District.
Selmer added that he would like to increase the borough assembly’s involvement in preserving the waterfront in order for the municipality to gain full utilization for industry and tourism purposes.
The candidates filing for the three-year term assembly seats are incumbents Dan Henry and Mark Schaefer.
Henry, who has been an assembly member for the last 14 years, said he is running again because he still feels attached to current assembly issues.
“I am still connected to projects that are evolving and taking shape,” he said. “I have a paternal sort of feeling about them.”
As the chair of the Finance Committee, Henry has several projects he is involved with, including the restructuring of municipal investments and the school budget.
“I want to see these take shape in a better way,” he said. “I want to see them come to fruition.”
Incumbent Mark Schaefer lost in the 2011 election to current Assemblyman Mike Korsmo, however he was appointed by Mayor Tom Cochran to replace former assemblywoman Colette Hisman after she resigned in May.
Schaefer said he was honored to fill Hisman’s seat and hopes to continue to do important work of the Skagway Municipal Assembly and thinks there are important decisions to be made in the near future in regard to the local economy.
“We need to continue to support industrial port development and capitalize on the resource potential in Canada remembering our roots as a transportation corridor,” he said. “And continue to pursue tourism opportunities to maintain a healthy diversified economy.”
Schaefer said he understands that Skagway was not hit as hard as other towns during the downturn of the economy
“We continue to have healthy revenue streams that in turn through careful management can provide short and long term infrastructure and institutional needs of the community for the benefit of all Skagwegians and their quality of life.”
Andy Miller filed for one of two Skagway School Board positions.
Miller has been involved with the school since becoming a full-time resident in 2002.
Starting as a substitute teacher, Miller has also has also been a custodian, held a full-time maintenance position and had a cleating contract with his wife, Mindy, who has since taken it over.
Miller said he wants to be on the school board, not only because he has a passion for education, but because his children, Calvin, 4, and Chloe, 6, attend the Skagway School.
“Now I’m a parent with even more vested interest,” he said. “I have thoughts on the direction I would like to see the school go for my kids.”
Those who wish to be in the running for these positions can still file as write-in candidates until Sept. 30, said Skagway Borough Clerk Emily Deach.
Deach added that if both school board seats were not filled after the election, there would be a procedure the board could go through to appoint someone.

Editor’s note: If anyone wishes to file a write-in candidacy and wants to be included in the annual Candidate Forum in our Sept. 23 issue, he or she should contact the News by Sept. 16.

Federal judge rules in favor of Minto Mine over White Pass

By JEFF BRADY

A federal judge in Anchorage has ruled that White Pass subsidiary Pacific & Arctic Railway & Navigation Co. was not justified in charging the Minto Mine for wharfage at the Ore Dock, in addition to dockage fees.
In his Aug. 12 opinion, U.S. District Judge John Sedwick granted Minto’s motion for partial summary judgment in the case, noting that “PARN’s argument that dockage actually means wharfage is unavailing.”
Dockage, by dictionary definition, is a charge for accommodating or berthing ships at docks. Wharfage, by definition, is a charge for accommodation at a wharf for the loading, unloading and storing of goods.
As noted in the ruling, in 1990, the Alaska Industrial Development and Export Authority purchased the ore terminal and ship loader from White Pass. In its purchase agreement, there was a clause that stated AIDEA, its agents, or other users of the facilities would be charged “an all inclusive dockage charge at the then current ore ship tariff rates of (PARN).” That charge at the time was $3 per foot for ore ships using the dock and was applied to ore shipments from the Faro mine before it closed permanently.
When the Minto Mine started up its copper shipments to the terminal in 2007, PARN delivered an invoice for an increased tariff of $4 per foot, as well as a $2 per ton of ore wharfage charge. Minto made some direct payments to PARN of $117,617 initially for wharfage, but has not paid $64,473 in charges. However, the mine has been paying into an escrow account held by the First National Bank of Alaska for wharfage. That account now contains $165,124.91, according to the ruling.
On March 4, 2011, Minto filed three motions in federal court alleging breach of contract, discrimination, and a claim of declaratory judgment. After cross motions by both parties for summary judgment, the matter was argued before the judge on Aug. 4 in Anchorage.
Minto argued that PARN’s demands for the additional wharfage charge was a “breach of the Purchase Agreement.” PARN argued that under maritime law, dockage and wharfage are synonomous terms that mean “use of a dock.”
The court concluded that Alaska law applied in this case, as stipulated in the purchase agreement, and that the “all-inclusive dockage charge” in the contract referenced the loading of outgoing mine products. It noted there was no mention of wharfage fees. It said that for PARN to charge for wharfage is “unreasonable because PARN no longer owns the shiploader through which the ore passes.”
During oral arguments, it was noted that Curragh was never charged wharfage when it used the facility. This was backed up by a declaration from Thomas Cochran, the former port manager from 1996-2000 and the current mayor of Skagway, who said no other user was charged wharfage.
The judge ruled that the all inclusive dockage charge at the posted tariff rates means the per foot dockage or berthage fee and “does not include a wharfage fee. Consequently, PARN has breached the Purchase Agreement by charging Minto a wharfage fee in addition to a dockage fee, and Minto is entitled to summary judgment in its favor on Count 1.”
Reached this week, White Pass president Eugene Hretzay commented, “We did lose the case. As to whether or not to appeal: weigh the pros and cons from a business standpoint before we make a decision.”
Cindy Burnett, vice president of investor relations for Capstone Mining Corp., the owner of the Minto Mine, said they were withholding comment until there’s a ruling on their discrimination claim. The mine contends that an ore ship should not be charged a dockage rate higher than one for a cruise ship.
In a separate ruling, Judge Sedwick deferred the discrimination matter to the Federal Maritime Commission. He agreed with PARN that a tariff discrimination dispute is best handled by a body that deals with provisions of the Shipping Act.

Gateway Project concept advances

By JEFF BRADY

The Skagway Port Commission on Aug. 19 unanimously supported a conceptual draft design for a phased Gateway Project that would improve docking facilities for the ore terminal and cruise ships.
The commission passed on its recommendation to the borough assembly as a phased project, because the draft by PND Engineers in Seattle does not have a firm price tag attached. The borough has $15 million currently available for the project – $10 million from the state and $5 million from a bond issue that was approved by local voters in May. And they are considering applying for a federal TIGER III grant. In addition, the Alaska Industrial Development and Export Authority, which owns the ore terminal building, has authority from the state to bond up to $65 million for improving its facilities on the uplands.
The entire commission was present and spent much of last week’s meeting discussing the design with PND engineers via teleconference. Commission members had asked if it would be possible to move the Ore Dock structure west by about 50 feet to allow more space for ships in the basin, but engineers said that would add significantly to the cost of the project by at least 50 percent, and could disrupt service at the ore terminal and barge facility.
As currently designed, there would be a new 797-foot-long dock face with sheet pile that would replace the old 1968 wooden structure, and the uplands behind the dock would be filled with dredged material from the ore basin and the small boat harbor. The ore basin would be dredged to minus-50 feet to accommodate large ore ships for the proposed Selwyn Chihong lead-zinc mine in western Yukon. The uplands would be used for a new ore ship loader to be built by AIDEA, and for storing mining materials for a back-haul.
“We have $15 million available to us,” said commission chair John Tronrud. “Our desire is to get as much of the uplands created as possible with the money that we have.”
In order to dredge to minus-50 feet, a small underwater retaining wall would be needed at the north end to protect the slope, engineers said, and it would not interfere with barges at the Alaska Marine Lines facility.
A recent report by environmental engineer Dr. Chad Gubala of Whitehorse cites that dredging would not stir up old lead-zinc in the basin, because most of that historic material from operations in the 1970s is gone. The bigger concern now is hydrocarbons that were detected in the sediments, as noted in a state report by the Department of Environmental Conservation last year.
Dredging the sediments and then filling them in behind a contained sheet pile dock should qualify as mitigation, engineers said. Gubala, who attended via teleconference, said AIDEA has indicated it would support this mitigation concept to include in the federal Corps of Engineers permitting for the project. PND’s “back of the envelope estimate” of the material needed was 130,000 cubic yards, and engineers said they would work on firming up the numbers for the conceptual design to pass on to the borough assembly.
The commission’s action assumes that the municipality will obtain site control of the docking facilities, which currently are owned by White Pass and Yukon Route as part of a tidelands lease with the borough until 2023. The municipality and WP&YR are negotiating a change to the lease that would allow the borough to have site control while still allowing the railway company to service cruise ships at the Ore Dock.
Commissioner Steve Hites recommended that the commission also look at the federal TIGER grant option for extending the south end of the facility to insure a longer dock for cruise ships of the future. Commissioner Tim Bourcy noted that the federal transportation grant program looks more kindly on projects that have other partners participating. The Gateway Project funding from the state is coming from the Alaska cruise passenger excise tax, because the project would allow an ore ship and a cruise ship to be docked at the same time.
Paul Taylor, the local representative for Selwyn Chihong, said he was encouraged by recent developments - with both the White Pass negotiations and the conceptual design for the Gateway Project. He said it was the first time he had seen the drawings.
“We would like to be at this site,” Taylor said. “It’s the most promising plan we have seen and it would match our needs.”
Commission members noted that if they see a need for a wider basin in the future, then they could always work with White Pass on moving the Broadway Dock to the east when it is ready for renovation. Under the proposed new agreement with White Pass, the railway would keep that dock under the current tidelands lease and for a 20-30-year extended lease.

2012 season to see big increase in cruise passengers

By KATIE EMMETS

The 2012 cruise ship season will see an increase of about 50,000 tourists with three four-ship days every week — Tuesday, Wednesday and Thursday — compared to this year’s two four-ship days per week.
Also, a third of the season, seven out of 21 weeks, will have four four-ship days by adding the occasional Monday to the list, said Skagway Tourism Director Buckwheat Donahue.
According to a Skagway Convention and Visitors Bureau release, the Star Princess, which carries 2,600 passengers, will be returning to Skagway after a few years away, the Norwegian Jewel, which holds 2,376, will be replacing the Norwegian Star, and the Disney Cruise Line will be making port on Thursdays instead of Fridays.
“The market drives the deployment of cruise ship schedules and how many ships we get,” Donahue said.
Along with a larger demand for cruise ship travel to Alaska, Donahue said the spiked projection is also a result of the reduction of the cruise ship head tax.
In June 2010, the Alaska Legislature approved an $11.50 drop in the tax from $46 to $34.50.
But even with the tax decrease, Donahue said cruise lines might have a problem filling ships to capacity.
“The economic indicators for the U.S. and the world are starting to look a little scary, which means it’s time to tow the line for costs,” Donahue said. “Now more than ever, we need to make it more affordable for cruise lines to operate and for passengers to travel.”
Donahue said, the municipality has taken hits in the past few years because of less money spent in stores.
As the schedule stands, July 4 will be a four-ship day with 9,642 tourists in town; however, July 1 and August 24 will be no-ship days.
The preliminary 2012 schedule from Cruise Line Agencies is available on the CVB website: www.skagway.com . A final schedule with docks and port times will be released in February or March.

BIG BROWNIE – A curious brown bear rises out of the tall grass on the Dyea Flats Aug. 4 “I think that the bear was as surprised to see me as I was to see him stand up. We both went our respective ways shortly after this was taken,” said the photographer. Photo by Jerry Harlin

BOROUGH DIGEST (complete digest in print edition)

Animal title amended
After Skagway’s Civic Affairs Committee and borough attorney recommended changes, amendments to Title 6 Animals passed its second reading unanimously at the Aug. 18 Skagway Borough Assembly meeting.
The first two sections, which dealt with animal cruelty and its penalty were scrapped from the code because Alaska State Law already covers animal cruelty actions.
This section of the Title 6 code was replaced with Animal Waste, which states that it is against the law for a person to not clean up after his or her dog on municipal sidewalks, trails and parks.
Also, throughout the ordinance, language was changed or taken out according to positions Skagway does not possess, such as an animal control officer.
In section 6.04.030 animal control officer was replaced with police department in regards to which entity would impound stray pets.
In Chapter 6.04.060, which discusses “disposal of impounded animals,” the assembly chose to get rid of the provision that a veterinarian would have to approve the method of killing an animal. Because Skagway does not have a readily available veterinarian, they amended the section to read, “the animal may be killed by any humane method.”

Redistricting appeal on hold
During the Aug. 18 meeting, the assembly called Skagway Borough Attorney Robert Blasco to discuss unresolved issues, the most pertinent of which was that of redistricting.
Like Skagway, Petersburg was also unhappy about being placed in a district with downtown Juneau and according to its complaint, does not have social or economic ties to Juneau and feels as if its representation will be less than sufficient.
When the Alaska Redistricting Board made the final redistricting decision in June and placed Skagway with Petersburg and downtown Juneau, the assembly spoke about the option of filing suit, however Blasco advised that an individual citizen file suit. In Petersburg’s case, an individual filed the suit, Blasco said, but this person is a member of the Petersburg City Council.
Because the deadline has passed for filing a lawsuit, Blasco said the only option the assembly has is to join in litigation with Petersburg,
But Mayor Tom Cochran said he is questioning that move.
“At this point, is there grounds and desire for us to join in on that?” he said. “We wanted to be with Haines, but if we proceed we won’t necessarily get back in with Haines.”
Cochran said that although he is unhappy with the board’s decision, he doesn’t know if it’s worth it to proceed in joining in on the lawsuit.
“It’s very expensive, and we might get a worse outcome,” he said. “And I don’t think we’ll win a fight with the government.”
Although Assemblyman Mike Korsmo said he agrees that there may be a worse outcome, he said he still wants to leave the door open for joining with Petersburg just in case.
“I’m not saying no, but in case something grabs us, we should just leave the option open,” he said.
The assembly agreed to hold off on joining in litigation with Petersburg until they feel, if ever, it is necessary to do so.

SCHOOL REPORT (complete report in print edition)

Board advocates eliminating assembly liaison position
In light of a proposed ordinance to control qualifications of Skagway School Board members, the board is eliminating the liaison position between itself and the Skagway Borough Assembly.
A proposed amendment to chapter 3.16 in Skagway Municipality Title 3 Administration and Personnel read, “No board member may be an employee of the school or the spouse, live-in partner, child or employee of the school by blood or marriage.”
School board members said they thought it was current school liaison Assemblyman Tim Cochran who championed the ordinance and alluded to the proposed amendment being aimed at board member Chris Maggio, who is in a relationship with and lives with Skagway School teacher Denise Caposey.
The ordinance never went before the assembly because it would be illegal for it to attempt to restrict who could be elected by public vote to the school board.
During public comment, Tim Cochran said the proposed ordinance was Mayor Tom Cochran’s idea, and that when Tim brought it to Superintendent Jeff Thielbar’s attention, it was still in the research phase, but because state law precludes the assembly from placing regulations on qualifications, the ordinance was pulled.
Thielbar said this has nothing to do with Cochran as a person, but the position.
“I want to keep the two things separate,” Thielbar said about Cochran and the liaison position. “Tim is a good man. He started a scholarship out of his own pocket.”
But Thielbar then added that Tim is outspoken and often has different views than the school board.
Cochran agreed that he is outspoken, but added that it would never preclude him from delivering messages from the board to the assembly.
“But if you don’t want a liaison, I will pass that on,” he said.
“The assembly doesn’t have that power over you,” said Thielbar to the board in an August 23 meeting. “You are different than the Dahl Memorial Clinic and the library boards that are appointed by the assembly. You are publicly elected.”
Thielbar drafted a letter stating the board doesn’t have any use for a liaison position any more with intent on sending it to the mayor.
But the board members decided that sending the letter would only be perpetuating the micromanagement power the board thinks the assembly feels it has over them.
Board Member Darren Belisle said the liaison position was originally created when the school needed funding for a roof repair.
Although there were several communication attempts made in regards to the funding, Belisle said the assembly acted “blindsided” and was upset with the school because it got no such communication.
At that time, the school board drafted a letter and asked for the assembly to appoint a liaison who would attend school board meetings and deliver meeting discussion to the assembly.
“The purpose of the liaison was to take messages from the school to the assembly, not for the community to send messages through the liaison to the assembly,” said board president Chris Ellis about what she thinks is happening. “The public should come to the board with concerns. If people in the community have issues, they should be coming to us.”
Board member Stuart Brown said he understands the assembly wanting to have one of its members sitting in on meetings because it invests a lot of money in the school, but he thinks the liaison holds too much power.
Brown said he didn’t appreciate when liaison Tim Cochran second-guessed the school’s bus purchase a couple months ago or the fact that the assembly was trying to pass an ordinance on who can or cannot sit on the board.

Positions filled
The Skagway School has filled three out of five posted positions. Tonya Dupree will now be the full-time special education aide, current girl’s basketball co-coach Mark Jennings will return as boy’s head coach, and Jonathan Baldwin will continue to hold the position of part time music teacher. The positions of part-time special education aid and wrestling coach are still vacant.
Thielbar said he hopes to fill these as soon as possible, seeing that the school year has already started. – KE