March 11, 2011 • Vol. XXXIV, No. 4

Terminal Reflection

An ore ship loads copper concentrate from the Minto Mine at the Skagway Ore Terminal in February. The borough is seeking site control of the ore dock portion of the tidelands lease with White Pass, so the dock may receive $10 million in funding in the state budget for improvements.

Photo by Andrew Cremata

Bar Wars II: Assembly strikes back


Not enough votes to uphold P&Z; action leads to granting of permit, no objection to duplicate license


A divided borough assembly debated whether the Planning and Zoning Commission erred in its decision to deny a conditional use permit that would allow the Corner Café to become an alcoholic beverage dispensary. While the assembly’s ultimate decision will allow the owners of the business to move forward, it is ultimately up to the state to decide their fate.
At the March 3 meeting the assembly, acting as the Board of Adjustment, overturned a Feb. 15 P&Z decision that denied Mark and Beth Smith a conditional use permit to allow liquor sales at the building commonly known as the Corner Café.
The Smith’s listed five reasons for their appeal, including the fact that irrelevant testimony was allowed and that two commissioners, Mike Healy and Rocky Outcalt, did not fully understand what they were voting on. Allegations were also made that Healy acted with a lack of integrity and was not allowed to recuse himself.
Mayor Tom Cochran attempted to steer the appeal discussion away from the subject of Healy’s alleged misconduct. Assemblywoman Colette Hisman agreed and said that those should be left out of the process because the permit would not have passed even if Healy had not voted.
Assemblyman Dan Henry argued that each vote should stand on its own merit and has its own motives.
“We are going to have to consider the entire picture,” he said.
With attorneys from both the municipality and the law firm of Baxter, Bruce, and Sullivan (hired by Red Onion Saloon owner Jan Wrentmore) listening via telephone, everyone on the BOA agreed that a great deal of testimony was allowed into the discussion that was not pertinent to the permit application.
Hisman said the commission “got muddy” on what should be heard during the meeting.
Assemblyman Dave Hunz said all the conditions were met by the applicants. He added that P&Z went beyond their purview and should have stuck to what is written in municipal code. Hunz said the Smiths’ neighbors were all in support of the idea and, “that is why we have conditional use permits, so neighbors can voice their concerns.”
Mayor Cochran said he had concerns about comments made by Outcalt that seemed to show that he was unaware exactly what he was voting on.
Henry said Outcalt made comments that were “irrelevant” but took issue with both his and Healy’s no votes.
At the P&Z hearing, Healy had attempted to recuse himself but his request was denied by Chair Matt Deach. Henry said that Healy should have abstained anyway.
“I’m a grown man and I make my own decisions…” said Henry. “I find quite a bit of this decision by P&Z disturbing.”
Assemblyman Paul Reichert said he agreed that Healy should have been able to recuse himself, but that the portions of the appeal questioning Healy’s actions shouldn’t carry much weight because his request was denied.
Reichert also agreed that the conversation should have been more focused, and that it was the role of the assembly to deal with intent and municipal goals and how to interpret them, not P&Z.
Henry read quotes from the minutes of the P&Z meeting made by Healy that addressed issues involving the liquor license. He said Healy missed the scope of the subject and urged the mayor to find two commissioners that understand the scope of the job.
Henry then asked the municipal lawyer on the telephone if a conflict existed because he was the owner of a restaurant that served alcohol. Even though the lawyer said there was no potential benefit to his business, Henry recused himself anyway.
The motion to uphold the P&Z decision failed 2-3 with Hisman and Reichert voting in favor of the motion, and Cochran, Hunz and Korsmo voting against it. There was initially some confusion over whether four votes positive votes were needed. But after conferring with the municipal attorney the next day, the mayor said “the motion failed, therefore they get issued a conditional use permit.” By not upholding the P&Z denial of the permit, the assembly “action reversed the decision of the P&Z.”
At the regular assembly meeting, officials at the table were charged with the responsibility of determining whether they should protest the Smiths’ request for a duplicate liquor license to the Alcoholic Beverage Control Board.
Beth Smith addressed the assembly and said her license would not be an extra but rather a duplicate and thus would not apply to ABC regulations dealing with population standards. She said letters received by the municipality from the law firm of Baxter, Bruce, and Sullivan were inadmissible, due to the fact they failed to list anonymous “clients.”
Mayor Cochran agreed and said, “They might as well be fiction.”
Healy addressed the assembly and said he felt like an unfair picture had been painted of him. He said he was the offspring of farmers and not a rich man. He added that he was not afraid of competition because his business, Skagway Brewing Co., and the Smiths’ appealed to “very different clienteles.”
Healy said he was opposed to the duplicate liquor license, and that the municipality should not allow it because it sets a dangerous precedent.
“How do you say ‘yes’ to them and ‘no’ to others?” he asked.
Reichert moved to officially object to the duplicate license, citing as a reason the municipality was concerned about setting the wrong precedent. Hisman seconded the motion.
Hunz took issue with Reichert’s reasons and pointed out that the Westmark Hotel already has a duplicate liquor license so as to serve alcohol in the Chilkoot Room dining area and the Bonanza Bar and Grill.
Hunz asked, “Are we trying to set new policy here? Are we looking at this instance and just don’t like this instance?”
Hisman said it was two separate buildings, but Hunz pointed out that ABC code uses the word “premises,” which by definition would include separate buildings on the same grounds. Smith also had argued this point, using the dictionary definition.
Reichert argued that the ABC book said that the original and duplicate license dispensaries must all be in the same area.
“(ABC) sets their rules. Let them figure it out,” answered Hunz.
Mayor Cochran said that it was obvious everyone knew how they were going to vote and said that arguing was counterproductive.
“I think we’re running the thing into the ground,” he said.
The motion failed 3-2, with Reichert and Hisman voting to object to the duplicate license. Henry again recused himself.
Beth Smith said after the meeting that she plans to move forward with the ABC board who will ultimately determine whether to issue the duplicate liquor license.

License holders given six months to obtain permits;
P&Z commissioner resigns after assembly attacks


A six-month grace period will give Skagway businesses that sell alcohol time to go through the process of obtaining a conditional use permit. However, some elected officials have voiced concerns over how the Planning and Zoning Commission dealt with the first such permit that was requested by a business owner.
Assemblyman Mike Korsmo apologized to the rest of the assembly at their March 3 meeting for finding a section of code that had remained hidden for 21 years. Korsmo said he still thought it was a good idea to require businesses that sell alcohol to obtain a conditional use permit, and was in support of granting existing businesses a six-month grace period to comply.
The entire table was in agreement, and Assemblyman Tim Cochran said a new noise ordinance, currently being worked out, would allow for consistent oversight with such businesses when neighbors complain to the police.
While the idea of a six-month grace period met little resistance, concerns over how P&Z handled a conditional use permit application to allow a bar at Fourth Ave. and State St. were voiced earlier in the meeting (see adjoining story).
How P&Z will handle future applications remains to be seen, but even the chair of the commission, Matt Deach, agreed that mistakes were made.
Assemblyman Dan Henry took issue with comments made by former Commissioner Mike Healy when he stated what the borough’s position should be during the P&Z meeting. Healy resigned early this week (see letters).
Henry said that Healy had no understanding of what being a P&Z commissioner entailed due to the fact he addressed issues involving liquor licenses before voting against the permit request.
“We as a city don’t grant liquor licenses,” said Henry.
Henry said there were other allegations concerning Healy’s integrity as a commissioner that were part of a “pot full of complaints.”
Henry said other people bringing items to P&Z might have questions about integrity and said that one or two of the commissioners should be replaced.
Mayor Tom Cochran said the charges against Healy were hearsay and that the best procedure for dealing with commissioners who are not performing their duties is to replace them.
Cochran replaced Healy late last year, but Healy and some on the assembly objected to the move, resulting in Healy being retained on the commission in January.
Assemblyman Mike Korsmo said that he felt Henry’s comments were out of line and that there was a lot more to the situation than just complaints.
After the meeting, Healy said via telephone that Henry’s comments involved hearsay and that he shouldn’t have said them (see letter).
Healy also defended his position on the issue of conditional use permits for alcohol dispensaries, claiming that the purview of P&Z included issues dealing with liquor licenses, including state laws and guidelines.
“I would hope that every commissioner thinks about the long term effects of any decision they make,” said Healy.
Healy said issues involving public safety, health and welfare are addressed by P&Z and that it was important to look at how alcohol might affect neighbors to businesses that apply.
Healy said when dealing with future conditional use permits by local bars that P&Z had no choice but to look at alcohol consumption as part of the process.
Healy said that in the recent case involving the Skagway Pizza Station, the issue of a duplicate liquor license needed to be addressed as it could lead to an oversaturation of bars in Skagway based on state guidelines.
Mayor Cochran said via telephone that he disagreed with Healy, and that comments made about oversaturation were “out of line.” He added that there are bodies that deal with alcohol use in regards to public safety and P&Z is not one of them, and that by addressing that issue they were overstepping their authority, or even becoming judges of morality.
Henry said that the state approves liquor licenses, “not the municipality and certainly not P&Z.”
P&Z Chair Matt Deach also disagreed with Healy and said that while it is important to plan with long term goals, it was not fair to interpret state law on a municipal level.
“Our job is to grant (a permit request) or not grant to a specific location according to code,” said Deach.
Deach said he felt as though he did not perform as well as he should have at the Feb. 15 meeting in question, and that in future he would take a tougher stance on getting off point.
Healy’s decision to step down as a commissioner of P&Z leaves the door open for someone else to step in. Mayor Cochran has already stated that he thought training for P&Z commissioners was important and was hopeful more training could be arranged in the future.
In the meantime, local businesses that serve alcohol will have six months to request their own conditional use permit and present their case before P&Z.
While the general consensus among municipal officials is that there is little chance of a permit for an existing business being denied, there are still questions concerning the scope of P&Z’s purview that remain unresolved.
Jan Wrentmore, owner of the Red Onion Saloon, said by telephone that if an existing business were denied a permit by P&Z without a number of documented violations there would undoubtedly be legal ramifications and a great deal of liability for the municipality.

New tidelands lease proposal tweaked

Mayor: Site control an issue for Legislature before funding improvements


The Skagway Borough Assembly is still wrestling with a counterproposal to submit to White Pass so tidelands lease negotiations can commence.
What started as a draft new 30-year lease that would commence this year, has turned into a request for “site control” of the Skagway Ore Terminal portion of the current lease until 2023, and then a new 20-year lease that would apply to just the Broadway Dock side after 2023.
The switch in approach resulted from Mayor Tom Cochran’s visit to Juneau last month. While he received a favorable reception for a presentation to the Senate Finance Committee about the Gateway Project and where $10 million from the governor’s budget would be spent, he said there are concerns on the House side about site control by Rep. Bill Thomas, co-chair of the House Finance Committee.
To address those concerns, the borough met in special session on Feb. 25 and then sent a letter to White Pass president Eugene Hretzay the next day. It first thanked him for accompanying the delegation to Juneau, but said “site control” was a final hurdle that needed to be addressed to insure state funding for the project. It then outlined the metes and bounds of the tidelands that the borough wanted control of, basically 3.44 acres identified on a map as the “bulkhead dock lease.”
The letter then stated the municipality would extend its original deadline for negotiating a new lease from March 1 to December 31, 2011, provided that the addendum to the current lease as described above is executed by March 15, 2011.
It then said, “If your company is unwilling to enter the addendum to allow this significant community project to go forward, we can only view such a refusal as a clear signal that White Pass does not intend to negotiate in good faith.”
The letter added that if White Pass refused and the municipality lost the funding, then the borough is prepared to cease negotiations and “pursue long-term leases beginning (in) 2023 directly with the current sublesses.”
It set a March 1 deadline for a response. Hretzay wrote back on March 2 that White Pass would require a survey of the land requested. “Also be aware that we require the settlement of site control and execution of a new tidelands lease to happen concurrently,” he wrote.
The assembly then met twice in special session, initially last Friday in executive session, and then in public on Wednesday of this week. A counterproposal was supposed to be ready for review then, but the latest draft from Borough Attorney Bob Blasco, sent over the weekend, was never received. Blasco, who was on teleconference, said he thought he was still working on a new 30-year agreement and would send it again. It contained new language related to rent and revenue sharing.
But Cochran asked the assembly to consider making “site control” an addendum to the current lease, at the same time allowing White Pass to continue to receive revenue from cruise ships while the borough would then receive revenue from other operations: ore loading and fuel transfers. In 2023, when the lease ends, all operations on the ore dock side would revert to the municipality, and a new 20-year lease for the Broadway Dock side would commence. He said it was a “win-win” approach that would give the borough site control and the project money from the Legislature.
Cochran expressed concern that the municipality was “spinning its wheels” by not having a counterproposal ready for White Pass, so “negotiations can begin in earnest.”
Blasco was directed to draw up the site control addendum this weekend for the existing lease. Another addendum will address indemnification of environmental issues as spelled out in the new lease draft.
In the new lease proposal, he also will plug in a rental amount and update the revenue sharing section for the lease beyond 2023. Assemblyman Dave Hunz wanted a 50/50 split on Broadway Dock revenue after 2023. Though some thought that may be too much, it was viewed as a starting point.
The entire counterproposal should be ready for formal assembly approval on Monday. Another special meeting has been set for 1 p.m. at City Hall.
White Pass initially wanted a new 30-year lease after 2023 under the same terms – an annual rental based on 6 percent of the appraised value of the tidelands. The company currently pays $127,000 per year. If they agree to the borough’s proposed terms, then they also would give up about twice that amount in revenue from fuel transfers and about $1,365 from each ore ship, according to municipal officials, but they would keep an estimated $250,000 or more in cruise ship dockage and wharfage fees.

A united front for the two boroughs

Fruitful joint meeting of Haines and Skagway assemblies


Municipal officials from Haines and Skagway met March 7 to discuss how they might work together to tackle issues that impact both communities. The open dialog was considered a success by all who attended, and there was a great deal of optimism that a coordinated effort could reap huge dividends for the neighboring municipalities.
Mayor Tom Cochran chaired the meeting at City Hall and said it was the first such gathering since the late 1990s.
“We’re the northern Lynn Canal,” said Cochran, adding that they shared common interests concerning the Alaskan Marine Highway, port development, and power related issues.
Haines Borough Manager Mark Earnest said that harbor and port projects were currently underway in Haines, including the expansion of their small boat harbor and the Lutak Dock. He added that Juneau would like to see the two boroughs work together on funding for port improvements to accommodate transshipment commerce with the Yukon.
Earnest said a regional approach would help on both a state and national level for funding.
Cochran said that if the Yukon mining industry “takes off” as planned then “there would be more than enough for the entire Upper Lynn Canal.”

Members of the two Upper Lynn Canal borough assemblies sat down in Skagway March 7 to talk about common interests. AC

Assemblyman Tim Cochran said that working together would cut costs for both communities and said a Mutual Assistance Agreement would be beneficial in case either Haines or Skagway experienced a natural or man-made disaster.
Haines Mayor Jan Hill said open dialog between the two boroughs was important. “This is exactly what we should be doing,” she said, adding there were limitless opportunities for cooperation and future meetings could narrow the focus.
Assemblyman Mike Korsmo said that the most important issue facing the two boroughs concerned potential redistricting that would combine Haines and Skagway with north Juneau.
“We get buried if we get absorbed into a district,” said Korsmo, who urged that when the proposed redistricting maps are released, the two communities should collaborate to present a united front.
Mayor Cochran expressed that he had received complaints from a number of Skagway residents concerning summer fast ferry service between the two boroughs. He said there were a handful of events where locals couldn’t get to Haines or return to Skagway because tourists received first priority.
Hill said she was aware of identical concerns in Haines and was in support of improving and supporting local traffic.
Haines Assemblyman Steve Vick suggested the Convention and Visitors Bureaus of both communities could work together when an event was approaching to better prepare for transportation.
Local Alaska Power and Telephone manager Darren Belisle urged that steps be taken to enhance hydropower output by bringing another project online. He explained that Lake Connelley would be the ideal choice due to the fact it was located within the Haines Borough.
Belisle explained that if the submarine cable that brings hydropower from Skagway to Haines were to go out, then Haines would have to run solely on diesel power for at least six months while the cable was repaired. The result would be a 400 percent increase in power rates to Haines’ customers.
Haines Assemblyman Scott Rossman said that it was a shame any oil had to be burned at all and asked what needed to be done to make the project happen.
Former AP&T Manager Stan Selmer said there had been opposition to a Lake Connelley hydro project in the past from environmentalists, but a joint resolution between the two boroughs would be beneficial in urging the state to fund the $32 million project.
Representatives from both municipalities agreed that the borough managers could work on a resolution to present to the state government during the current legislative session. All in attendance agreed that the meeting was a success and were looking forward to working together in the future.

SHIRTLESS SHS SPIRIT – Members of the Skagway High boys basketball team painted their faces and went shirtless to support the Lady Panthers’ quest for State at the SE 2A Tournament in Ketchikan. See tourney coverage in Sports & Rec and on the SHS Basketball Page. Photo by Cody Jennings

SCHOOL REPORT (complete report in print edition)

School budget waiting
 The school budget was submitted to the borough on Feb. 14, and as yet there has been no meeting with the borough assembly. But that doesn’t mean the two sides aren’t talking about it.
School Superintendent Jefferie Thielbar told the Skagway School Board on Feb. 28 that he had been asked to submit some supporting documents, and was planning to address the borough Finance Committee the following week. But chair Dan Henry scratched it from the agenda until a full assembly is present. Since then, more documents have been requested by committee member Dave Hunz, including a breakdown of any yearly carry-over funding and teacher step increases dating back a decade.
In its proposed budget, the school district has requested $482,708 from the municipality in extra funding for programs, in addition to so-called cap funding for operations totaling $1.255 million. Last year the municipality gave about $3,300 less in cap funding, but extra funding was just $250,000.
The district is facing more than a $200,000 reduction in state foundation funds if enrollment drops to a projected 60 students. Assembly liaison Tim Cochran said he is comfortable replacing what is lost from the state, but he told board members that he had some issues with them seeking $32,000 more from the municipality than what they were losing. He added that he had heard that there would be 2 percent raises, and also questioned increases in the food services budget.
Board member Darren Belisle said there was no 2 percent raise. “We’re still in negotiations,” he said, and cautioned statements being made without fact.
Thielbar said the food services aide’s time was being put into the food budget next year, instead of coming out of the operating budget.
But that did not satisfy Mavis Henricksen, who said she expected a tighter budget from the school.
“I object to almost everything in this budget,” she said. “I think food service should go altogether. There aren’t enough kids to justify the program.”
Board members talked about how well the kids are doing, from advancing to state DDF and basketball tournaments, to explaining science fair projects and winning robotics championships.
“I think it has everything to do with the support system, and I think they know it,” said Board President Chris Ellis. “We’re doing something right.”
Elementary teacher Mary Thole said the atmosphere and communication in the building has greatly improved over a year ago. She said Thielbar pushes staff to come up with good ideas, and does it in a positive manner.
Regarding the budget process, she urged everyone to think about the kids and how important it is to have a school that is marketable.
Joanne Korsmo said Skagway doesn’t have the problems other districts have, such as drop-outs or teen pregnancies.
“We don’t have those bad statistics because of the education we provide,” she said. “They’re focused.”
Thielbar said he received a good evaluation from the board after an executive session. The board also met behind closed doors to discuss negotiations.

Zack Wassman and Donovan Henson were all about the ties and the thumbs up at the annual Science Fair. See complete list of winners in the print edition. AC

Hather award, Calendar
  In other business, the board made a couple more changes to the Don Hather Wall of Fame criteria. Nominations will be accepted until March 15 each year starting in 2012, and they removed the 50-signature petition requirement. The name will be announced at the awards banquet. Hather is this year’s honoree.
The board approved the 2011-12 school year calendar. It will be similar to this year, except there will be three teacher in-service days Oct. 4-6 to allow staff to attend a national conference on reading in Juneau.
School will start on Aug. 17 and end on May 17. There will be a holiday break from Dec. 17 to Jan. 4, and spring break the third week of March. – JB

BOROUGH DIGEST (complete digest in print edition)

One-year contract for Smith
  At the March 3 assembly meeting, members voted 5-1 to approve a new one-year contract with Borough Manager Tom Smith at the existing salary of $92,000 a year.
The agreement was negotiated with Smith by Assemblymen Dan Henry and Mike Korsmo after an executive session last month.
Assemblywoman Colette Hisman cast the lone vote against the contract. She said that after they came out of executive session, there was no decision on whether the manager’s contract should be extended. “I feel it was done the wrong way,” she said.
But Assemblyman Tim Cochran said he was under the impression that there was no objection to retaining Smith. Mayor Tom Cochran said there was no vote.
Henry said it can be fixed with a roll call vote, but direction was given to the negotiating committee to handle the contract.
Korsmo said it was his recollection that there was a decision to retain Smith, “but it was not overwhelming by any means.” He noted that the evaluation asked for “quite a bit of improvement.”
The mayor said that with all the staff turnover at City Hall in the past few months, he believes Smith deserves another year to work with all the new people. – JB

Bring the noise ordinance
 A proposed noise ordinance is soon to make its way to the assembly table. The ordinance seeks to define the level at which sound becomes a public nuisance and is intended to offer guidelines to local police when dealing with, and enforcing, noise complaints.
The ordinance was drafted by Police Chief Ray Leggett utilizing similar ordinances from other communities and customized to address local needs.
“This is more liberal than most of the places we checked,” said Leggett.
At the Feb. 23 Public Safety Committee meeting Leggett explained that most people in Skagway mistakenly presumed a noise ordinance was already in place. He said the public perception is often that the police won’t do anything about noise when in fact they can’t do anything.
Leggett said that in the last couple of years there had been numerous noise complaints, and the new ordinance would remove officer subjectivity by utilizing a sound meter to register the decibel level when a person complains.
The ordinance is separated into two portions. One addresses “chronic animal noises” and defines the phrase as “repeated vocalization by an animal….” The other section deals with noise control and addresses the use of tools, firearms, loudspeakers, motor vehicles, noise emanating into areas zoned as residential, and other random noise disturbances.
In dealing with chronic animal noise, the ordinance prohibits violations of seven consecutive minutes or more from 7 a.m. to 10 p.m., and five minutes or more from 10 p.m. to 7 a.m.
The ordinance delineates other noise complaints into residential, commercial and industrial areas and sets allowable decibel levels for both daytime and nighttime hours.
Leggett explained that if a complaint was received whereby someone said that they could hear the noise in their bedroom, then the reading would be taken from the bedroom to see if it was indeed in violation of the decibel limit.
He added that the strict definitions would not only help with enforcement but make it simple to prove in court.
Leggett said the goal was to work with offending parties to make them aware of the noise violations so they could make necessary adjustments on their own. However, chronic offenders would face a fine and even stricter penalties if they refused to comply.
“If someone wants to be a turd, they’re going to get tapped,” said Leggett.
Borough Manager Tom Smith said a resolution dealing with fines and penalties would be drafted to coincide with the noise ordinance so it could be tweaked in the future without having to draw up a new ordinance.
Leggett assured attendees that the police were only seeking to enforce the code when complaints were received and would not be seeking out noise violations.
“It’s not like we’ll be trolling out the window with the noise meter,” he said.
The ordinance and the fine structure resolution will be discussed further at the March 14 public safety meeting and brought to the assembly for consideration in April. – AC

Reconsideration of Fish Co. extension
 At the March 3 meeting, member Dave Hunz asked for reconsideration of a previous vote that denied a lease extension request to 2018 for the Fish Co. based on an appraisal last June.
Hunz said that after investigating the issue again, he found that the owners, Dan and Eileen Henry, were not given the June appraisal until Dec. 13 and the bill until Dec. 22.
“It never got to them in a timely fashion,” he said.
Dan Henry had argued this point to no avail at a Feb. meeting, and the assembly agreed to just have the lease run out in 2012 and he could apply again with them. But at the March 3 meeting, Hunz said it would be in the best interest of the municipality to extend the Fish Co. lease to 2018, the same year the neighboring Stowaway Café lease expires, and to have both leases reappraised in 2013.
The extension passed 4-1 with Colette Hisman casting the lone dissenting vote. Henry, an assembly member, abstained. – JB

Municipal goals revised
 After a Feb. 28 work session to update its goals and objectives, the assembly saw a new list at the table March 3 and approved it unanimously. The list contains about 30 items. Here's the link: Municipal Goals 2011 (pdf) – JB