September 14, 2012 • Vol. XXXV, No. 16

Thirty Years Running

Mike Tranel of Skagway, center wearing bib 851, leads runners from the starting line in Skagway on Sept. 7. More than 140 teams participated in the 30th annual Klondike Road Relay. See story and photos in our KRR 2012 Feature.

Photo by Katie Emmets

Municipality settles with Western Marine over bid protest
Company filed court complaint over muni. code’s local bidder preference


 The Municipality of Skagway has accepted a proposal from Western Marine Constructing Inc., which will result in a dismissal of the company’s pending bid protest in regard to the Skagway Small Boat Harbor improvement project.
After a September 6 executive session, the Skagway Borough Assembly authorized borough attorney Bob Blasco to complete the resolution with Western Marine's counsel. Blasco was present at the meeting.
Skagway Mayor Stan Selmer said the negotiations could take a week or more to complete.
“The particulars of the resolution will be in the settlement and a dismissal filed with court,” Selmer said. “We will not make further comments until that is done.”
The bid protest came as an eventual result of the municipality awarding the project to Hamilton Construction, LLC of Skagway.
Six construction companies bid on the project, and although Western Marine of Seattle came in with the lowest bid at $9,584,090, the project was awarded to Hamilton on August 7 after figuring in the local bidder preference.
Western Marine’s bid was $120,235 lower than Hamilton’s $9,704,325.59, but when the municipality applied a 5 percent local bidder preference to Hamilton’s bid, it resulted in Hamilton’s bid dropping to $9,219,109.31, which made it the lowest bid.
According to Skagway Municipal Code 4.05.040, a local bidder preference allows the municipality to award the contract to a Skagway bidder if its bid is not more than 5 percent higher than the lowest bidder.
Western Marine took issue with the code, and on August 14 the company filed a complaint in Alaska Superior Court asking for it to assume jurisdiction over the matter by placing on the municipality a temporary restraining order from awarding the contract to Hamilton, and also to impose a preliminary injunction, which would halt any progress in the Small Boat Harbor improvement project.
Superior Court Judge Philip Pallenberg initially granted a temporary restraining order after receiving the complaint, and then heard arguments in a hearing on Aug 21.
The following morning, he lifted the temporary restraining order and denied a preliminary injunction.
Pallenberg did allow Western Marine to move forward with its bid protest to the municipality, which they filed shortly after they got the go-ahead, Selmer said.
Western Marine representatives could not be reached for comment.

Wastewater project under review
Dave Hunz responds to statements from meeting


In an interview with the News the following week, Hunz said H&H has no subcontractor agreement with McGraw, and his general manager, whom Gladden referred to as the project superintendent, was only hired to report back to McGraw on project progress.
“We have an employee who goes down there once a day and his job there is to take notes on progress details and (take) pictures and send them back to the contractor,” he said. “He has no authority to direct the (subcontractors) to do anything or to buy any supplies.”
Hunz said McGraw wanted to fill this position with someone local who is familiar with regional parts suppliers from Whitehorse and Seattle so McGraw could get recommendations on which distributers to buy from.
In response to Gladden’s testimony about H&H billing McGraw for hours its general manager isn’t working, Hunz said the company is sending McGraw only bills for logged hours of work, which Hunz said is fewer than 40 hours a month.
The bills sent to McGraw also consist of costs for machines, concrete and other materials H&H provides for the project.
Hunz said he thinks leaving the assembly chambers while Gladden spoke was unfortunate.
Asking him to step down from the table while Gladden gave his report was one thing, Hunz said, but asking him to leave the chambers when the assembly wasn’t going to take any action was another.
“Ostracizing one member for whatever they want is kind of disturbing,” he said of the assembly. “And I could see this becoming a trend. If they don’t like your views on something, they could just ask you to leave.”
Hunz was the third person to cast his verbal vote on his staying or leaving the chambers during the discussion.
Hunz voted in the affirmative, he said, because he didn’t have all of the facts and because he could tell the vote was going to lead to him having to leave anyway.
“As I recall, there wasn’t much discussion on whether I should stay or leave,” he said. “(Stan) made his recommendation, and then we took a vote.”
Hunz said he doesn’t see his company’s involvement with the wastewater treatment plant as a conflict of interest with his position as chair of Skagway’s public works department.
“My responsibility as the public works chair is to better understand projects in the department and report back to the assembly,” he said, adding that he’s not there to tell public works entities how to conduct their business. “I’m not there to run the department.”
A municipal consultant met with project engineer HDR, Inc on Sept. 6 and then toured the facility with the Smith and borough attorney Bob Blasco on Sept. 7.
Smith said the municipality expects full cooperation from project contractor McGraw to attain project completion and to address outstanding issues.
Chris McGraw, who is in charge of the project, has not returned repeated requests for comment.

WINDING DOWN THE SEASON – TEMSCO helicopters land on a sunny mid-August day with the Norwegian Jewel at the Ore Dock, and a SMART shuttle bus loads passengers in front of the rail depot. Katie Emmets

Visitation appears up in 2012
Better numbers ahead for cruise ships in 2013


Skagway’s 2012 summer season has seen “summer” only a handful of times.
And while chilly, wet weather might sound like it would deter tourists from leaving their warm cruise ship cabins, it hasn’t.
Red Onion Saloon owner Jan Wrentmore said she thinks the weather has caused more tourists to walk through her doors.
“Everyone wants to come in from the cold and warm up with a cup of chili or a Sloppy Joe,” she said adding that the weather hasn’t negatively affected her at all.
Skagway Tourism Director Buckwheat Donahue shared Wrentmore’s sentiment and said Skagway’s tourism numbers are greater than they have been the past two years.
According to a Skagway Convention and Visitors Bureau release, Skagway saw total of 516,567 tourists in Skagway through the month of July - 31,279 more than 2011 and 37,225 more than 2010.
Cruise travel brought in 456,181 tourists, the Klondike Highway brought in 40,154 tourists, the ferry brought in 10,347, and the train brought in 9,885.
In regard to cruise industry tourism, Donahue said Skagway is starting to see numbers that are getting back up to the summer 2008 season, one of Skagway’s most lucrative.
“The rebounding economy is the reason for the increased cruise activity,” he said. “Hopefully the economic recovery will continue so that everybody here can make their financial pile a little bigger.”
As for next year, Donahue said Skagway could expect eight weeks of four four-ship days and eight weeks of three four-ship days.
There will also be some changes in ship scheduling.
The Celebrity Solstice’s coming to Skagway’s port for the first time will bring the biggest impact to the 2013 cruise ship season.
Bringing with it 2,850 tourists and 1,300 crew each week, the Solstice will replace the Celebrity Infinity.
The new ship will also require a floating dock, as it only has an entrance on one of its floors and needs a dock that will rise and fall with the tides to accommodate it.
White Pass & Yukon Route railway will begin construction on the floating dock in October and it will be ready by the time the Solstice makes its first call to Skagway on May 21.
Holland America’s Amsterdam will be gracing Skagway waters more next year by increasing its calls.
The ship only came twice this year, but it will be bringing a capacity of 2,000 tourists with it 18 times next year.
The Norwegian Sun will be returning to Skagway on Fridays and will bring 2,200 tourists with it at capacity each time.
“We’re going to be busy,” he said. “I’m looking forward to next year’s increased volume of traffic.”
Several other Skagway business owners were contacted, including the railroad, but they were not ready to report on their seasons.

SPORTS FEATURE: Klondike Road Relay 2012 - Soggy, Slushy, Sunny

A FATHER'S SUPPORT – Skagway runner Airk Cochran receives a warm pat on the back from his dad, Tim, after finishing third overall, and first in his division, at the Skagway Invitational Cross Country Meet on Sept. 7. See coverage in Sports & Rec. for this issue. Jeff Brady

BOROUGH DIGEST (complete report in print edition)

AIDEA lease ordinance postponed again
In a September 6 Skagway Borough Assembly meeting, members voted to postpone the second reading of an ordinance that would put a proposed Alaska Industrial Development and Export Authority post-2023 tidelands lease to a public vote.
This is the second time the second reading of this ordinance has been postponed, and it will now be brought before the assembly at a November 8 meeting.
“This gives the municipality the time for due diligence and to complete negotiations,” said Skagway Mayor Selmer.
Selmer and Assemblyman and negotiator Dan Henry met with AIDEA director Jim Hemsath on September 6 to continue negotiations.
“We have some indication that we will receive word back from AIDEA in two to four weeks,” Selmer said.
Selmer said he anticipates the municipality will have to respond to AIDEA, which is why the ordinance was postponed for two months.
“There’s no possible way for the assembly to start the time clock for a special election if we don’t have the essence of a lease for the public to review to enable an informed vote,” Selmer said.
Unless the negotiation process lasts until August 2013, there will be a special election, but if they wrap up after August 2013, the lease will be placed on the regularly scheduled election ballot in October 2013.

Outdoor arts facility design bid awarded after tiebreaker
Skagway Mayor Stan Selmer voted to break a tie to award the bid of the Skagway outdoor arts facility design to Architects Alaska to in the amount of $51,840.
Assemblyman Tim Cochran said he thought awarding this bid before discussing a Seven Pastures master plan, which includes the possible creation of a dike along that section of river, was “putting the cart before the horse.”
“I think we should think about the order of the issue here,” he said. “I’m thinking we’re moving awful fast on this thing before we know what the area is going to end up looking like.”
Assemblyman Paul Reichert said Seven Pastures would probably see several future projects, including the creation of a dike, future recycling projects and the outdoor arts facility.
“This arts facility has been the focal point of improving that area for the use of people down there, so I don’t think were putting the cart before the horse,” He said. “I think we’re doing exactly what we’ve been working on for the last year and that’s coming up with a proposal, putting it out to bid.”
Although there was only one bidder, Reichert said, the bidder, David Moore of Architects Alaska, was an integral part of the project over the past year.
Assemblyman Dave Hunz said he couldn’t support the bid award because he doesn’t think Seven Pastures is a suitable site because the potential of a devastating flood caused by the neighboring Skagway River.
Assemblymen Cochran, Hunz and Mark Schaefer voted “no” and Reichert, Mike Korsmo and Dan Henry voted “yes.” Selmer broke the tie witha “yes” in favor of awarding the bid to Architects Alaska .
The assembly will discuss a Seven Pastures master plan in a September 20 meeting. Selmer said the plan could also include a possible bypass road for ore trucks, so they would not have to run through the middle of town. This road could also eliminate the need for a trucking cap in the potential 2023 AIDEA waterfront lease. Selmer said this could all change if White Pass & Yukon Route railway started hauling ore.
Selmer and White Pass president Eugene Hretzay will be attending a Yukon Chamber of Commerce meeting Sept. 19 in which they will discuss the possibility of Eagle Industries Metals shipping their ore by rail.
Selmer said the Whitehorse area mine has a real interest in shipping ore via rail from Carcross to Skagway.

Skagway residents to be subsidized for gardening vegetables
Mayor Stan Selmer voted to break a tie to pass a resolution which will allow the municipality to provide subsides for vegetable gardens in Skagway.
According to the resolution drafted by Kim Burnham, the Food Garden Initiative would provide subsidies at the rate of $.50 per square foot of garden to qualifying residents for up to 500 square feet per applicant.
Subsidies would be provided on a first-come-first-serve basis until the FY13 budget allocated funds of $5,000 run out.  Gardens must be predominantly food productive gardens, and gardens can be either traditional in-ground plots with a definitive edge, or in raised beds.
Applicants must be registered to vote in Skagway, and applicants who are under the age of 18 are eligible if their parent or guardian is a registered voter in Skagway.
If applicants wish to garden on rented property, they must provide proof of the landowner’s permission to garden on their land.
Mavis Henricksen spoke out against the resolution and asked that it be tabled until January so other options for gardening encouragement could be discussed.
Henricksen is a gardener herself, and she said she thinks competition would be a better motivator than subsidies, and it would also save the municipality money.
Although he said he thought it would pass, Assemblyman Mark Schaefer said he couldn’t vote in favor of the resolution.
“I like to garden and I think it’s good to encourage people, but I don’t think we should spend our money that way,” he said. “It’s fine to encourage people to garden, but I don’t think we should subsidize it.”
Assemblyman Paul Reichert said he thinks the resolution is a great idea and would support it.
“I really like what’s been going on with the community garden down behind the (school) ball fields,” he said.
Reichert said he enjoys seeing how much time people spend out there cultivating their gardens.
“Encouraging people to start gardens and growing fresh food here and not bringing in from the outside, I think it’s a great thing,” he said. “Healthy food...I think it’s one of the best things we could support.”
Assemblyman Mike Korsmo said he agreed with the resolution and added that the assembly allocated money for it in the fiscal year 2013 budget, so it must have had some intention of backing this program. He also mentioned that there would be volunteer support for the program so it wouldn’t be a burden on municipal staff.
Assemblyman Tim Cochran said he appreciates the work Burnham put into the resolution, but he thinks there are other ways to encourage gardening.
“You’re talking $250 per person to subsidize their (garden),” he said. “I’d rather see a club with education seed money, etc. rather than subsidize a person for their own garden.”
Mayor Stan Selmer said he was the master of ceremonies for the Eastern Star’s flower and garden show at A.B. Hall for 17 years. He said the event, which showcased vegetables and flowers, is sorely missed and thinks the new program has the potential to resurrect it.
“Yes, it is government money, but it’s government money for a process which has extreme value,” he said.
The resolution passed with a 4-3 vote. Cochran, Schaefer and Assemblyman Dave Hunz voted no, and Korsmo, Reichert and Assemblyman Dave Henry voted yes. Selmer broke the tie with a vote in favor of the resolution. – KE


STIP amended to reflect importance of Moore Bridge, Klondike Highway upgrades
 The Alaska Department of Transportation has amended its Statewide Transportation Improvement Program to speed up the timeframe on Klondike Highway renovations.
Funding was also realigned after the previous project descriptions were amended.
The originally approved STIP stage one would have realigned selected segments of the Klondike Highway, overlaid existing pavement, and replaced/refurbished the Captain William Moore Bridge. It was appropriated $62.2 million, which would have been distributed between fiscal years 2012 and 2015.
According to the amendment that was approved August 20, the first stage of the project now aims to replace the Moore Bridge, replace the full depth of pavement in certain locations, and grind and pave with pavement overlay over the full length of the highway. This stage of the project was appropriated $28.58 million.
The design phase of stage one was given $3.8 million for FY2012, the right of way phase was given $350,000 for FY2013, the construction phase was given $ 24.15 million to be distributed in FY2014.
In the original STIP, stage two would have widened shoulders and expanded the clear zone on the uphill side through rock excavation. It would also have constructed climbing lanes and avalanche control structures. It was appropriated $1 million, which would have been distributed in FY2014, and according to the original STIP, an additional $15 million would have come at an undetermined time after FY2015.
The amended stage-two version will now include a plan that will reconstruct Klondike Highway to accommodate increased heavy truck traffic volume. It it is appropriated $49.25 million, which will include $1 million for design in FY12 , $3.5 million in FY14 for design, $315,000 for right of way in FY14, and $47.15 million for construction and $2.1 million in FY15 for utilities.
Skagway Mayor Stan Selmer said he’s happy about the change in programming and thinks the bridge repair should happen sooner rather than later to accommodate the potential high volume of trucks transporting ore to Skagway in the coming years.
“The DOT needs to get this work done before the mines are in full operation and cannot handle a shutdown while a bridge is replaced,” Selmer said.
Selmer also added that he hopes the plan includes a workaround, a bypass around construction, so vehicles can still travel on the Klondike Highway without problems.
Skagway lobbyist John Walsh said this is a positive thing for Skagway.
“This is good news in respect to the state government identifying this corridor as critical and in need of improvement,” Walsh said.
But $77.73 million of the total $82.845 million is labeled as proposed state funding (PSF), which means it is not secured yet, Walsh said.
The $4.8 million allotted for FY12 and the $315,000 allotted for FY13 are labeled as other state funding (OSF) which means it is already available.
“The amendment is saying the project will happen sooner rather than later, but the message is saying the money is still not in hand,” he said. – KE

Skagway supports ballot measures
The coastal zone management Ballot Measure 2 received huge support in Skagway, 175 to 72, in the Aug. 28 primary, but it failed statewide by a large margin.
Skagway voters also supported U.S. Rep. Don Young on the Republican ballot and State Rep. Sharon Cissna on the Democrat ticket in the Alaska Congressional seat race.
Democrat State Rep. Beth Kertulla was unopposed and received huge support from Skagway voters in the new House District 32.
Skagway voters also supported Ballot Measure 1, 180-64, which would raise the limit for senior property tax exemptions. It was narrowly passing statewide after final counting of absentee ballots.
See complete district totals, including Skagway's, in the Alaska Division of Elections District 32 report at– JB

SCHOOL REPORT (complete report in print edition)

Four new half-time hires at school
The Skagway School Board discussed new hires and voted to award four half-time contracts during an August 28 meeting.
Courtney Mason was hired as Skagway’s preschool teacher, Jeffrey Hitt was hired as the food services manager, Cassandra Orszulak was hired as the teacher’s aide, and Rin Clarke was hired as the special education aide.
The position of part-time library aide is still open, and Skagway School is accepting applications until it is filled.

Enrollment highest at start of year
Skagway School started the 2012-2013 year with 73 students in its seats.
Forty-one students are in elementary, 18 are in junior high and 14 are in high school.
Last year, Skagway started school with 69 students, but that number dropped in October, said administrative assistant Debbie Knorr.
At the end of each cruise ship season, summer residents leave town and take their children with them.
The lowest student count for the 2011-2012 year was 56, Knorr said. She added that two students signed up in the middle of the year, boosting the count up to 58.
Knorr said she expects the number of students to drop to the low 60s or high 50s during the state’s count period this October. The average daily count during this period is used to determine state funding for the district.
– KE