December 22, 2010 • Vol. XXXIII, No. 23

Groovin' for the Yule

Wynter Morgan and Lucy Kollasch show off their flower power and Yuletide outfits as they hit the dance floor for the annual Yuletide Ball. The theme this year was “Have a Groovy Little Christmas.” See many more Yuletide photos in our Dec. 22 print edition and our two Yuletide galleries.

Photo by Andrew Cremata

Governor’s budget includes
$10 million for improvements
to Skagway Ore Dock



By JEFF BRADY

Governor Sean Parnell’s budget announcement Dec. 15 sent a shake through Skagway that rivaled the recent earthquake. Except this was a good shake with the prospect of $10 million in Skagway dock improvements.
The Skagway project was listed in the governor’s top five infrastructure highlights as part of a proposed $1.6 billion capital budget statewide.
“We are going to put Alaskans to work,” Governor Parnell said in a speech in Anchorage. “We’ve included $103 million in the capital budget to leverage more than $705 million in federal and other funds for transportation, highways, aviation, water, sewer projects for vital infrastructure improvements. We have targeted $60 million for roads and ports that are key to opening up resource development.”
The borough, through its lobbyist John Walsh, had asked for the dock money this fall as a contribution to the Skagway Gateway Project. After failing to secure a federal TIGER grant toward the $42 million project, Walsh suggested the municipality ask the state for $10 million in cruise tax money for the portion of the project that would extend and improve the Ore Dock. The extension is needed so cruise ships and ore ships may use the dock at the same time.
The money was indeed plugged into the budget after a visit by Mayor Tom Cochran to Juneau earlier this month to help Walsh lobby for the money.
The mayor was quite pleased with the state’s response.
“This is good news for the municipality as we continue in our efforts for industrial port development,” Cochran said after seeing the state’s press release shortly after the budget was announced.  “The key to Skagway’s economic future lays in diversifying our local economy and this is a great first step in accomplishing that goal. This news also underscores the urgency in re-negotiating the tidelands lease with White Pass.”
Cochran brought up the news a day later at the Dec. 16 borough assembly meeting during a port commission report, and also when the borough assembly began discussing a new two-year contract for Walsh.
“This is very good news for us and a direct result of the port commission and our own lobbyist,” Cochran said at the meeting.
Skagway Port Commission chair John Tronrud said the governor had placed economic development as a priority, and called the Gateway Project “a great project to develop Skagway’s waterfront.” He said the commission’s effort to secure a federal grant, while unsuccessful, was a worthwhile process that focused their priorities on a scaled down project that “looks to our future.”
The mayor and assembly encouraged the commission to keep working on the Gateway Project. Along with the state contribution for the dock extension, the Alaska Industrial Development and Export Authority is expected to pursue bonding for an expanded ore terminal.
This would all be happening on municipal tidelands currently leased to White Pass through March 2023. The borough is seeking a renegotiation of the lease, and White Pass has put forward a proposal for a 30-50 year extension (see adjacent story).
Assemblyman Mike Korsmo said he was pleased with the commission’s direction but noted that as they enter negotiations with White Pass that they need to “keep on task and … send a clear message to everyone. The state will want to know who’s running what.”
Earlier the mayor said the Gateway Project is his top priority, and the prospects are good for not only the Selwyn mine using the terminal, but also a Yukon iron ore mine.
Selwyn will be coming to Skagway Jan. 20, conducting an open house about its project starting at 5 p.m. in assembly chambers (see advertisement below).
Cochran said the project is Skagway’s best hope for diversifying the town’s economy and adding some well-paying jobs.
“An ore terminal with multiple tenants running 24/7 is the option that is best for our community,” he said.

Borough sends back first tidelands lease proposal from WP&YR

By JEFF BRADY

The White Pass & Yukon Route responded to the Municipality of Skagway’s request for commencement of tidelands lease negotiations with a proposed draft of a new lease which, for the most part, was identical to the current lease but with an extension of 30 years beyond the current end date in 2023. It also allows an option for two 10-year renewals.
In an e-mail attached to the draft, WP&YR president Eugene Hretzay said a final draft would be subject to approval by the board of ClubLink Enterprises Limited, the owner of White Pass. “We look forward to an early conclusion of this matter so we can all move forward with port development,” he concluded.
But the draft lease evidently was not what the municipality was looking for.
After a 35-minute executive session on Dec. 16, members of the Skagway Borough Assembly voted to have Municipal Attorney Robert Blasco and Borough Manager Tom Smith formulate a response, and also request the status of $50,000 that has been held in escrow by the company for potential environmental issues on the property.
When asked immediately after the meeting what the response would be, Mayor Tom Cochran replied, in more colorful language, that the new lease proposal was unacceptable.
“It’s basically the same as 1968 with the date change and one new section,” he said.
That new section addresses hazardous waste, allowing the movement of lead and other hazardous materials only with prior written consent of the municipality. The ore terminal grounds on the leased property and routes into town were the subject of a massive lead clean-up in the late 1980s, but lead found on the sea bottom near the dock was allowed to settle. Recently the state Department of Environmental Conservation said a bigger concern now are petroleum-based hydrocarbons in those sediments, but again recommended they not be disturbed.
As part of recent estoppel agreements with the municipality so it may use the current tidelands lease as collateral for bank loans, White Pass agreed to placing $50,000 in escrow for environmental issues that may arise. With the borough wanting to proceed with improvements to the Ore Dock and facilities, it may be needed.
The proposed new lease combines two parcels that were leased by the municipality in 1968 and 1969, both of which have an end date of March 18, 2023. The borough had sought to renegotiate the lease after the Alaska Industrial Development and Export Authority, a sublessee and owners of the Skagway Ore Terminal building, wanted an extension to 2040 so it may attract long-term customers from the Yukon. The extension would allow an adequate pay-back period for bonds sold to expand the facilities.
But the proposed draft is more of a new lease than an extension. It would begin on March 19, 2023 and extend for another 30 years with the option of two additional 10-year terms.
It includes more than 70,000 acres of prime waterfront real estate, and the annual lease rate would remain six percent of the appraised value of the two parcels. Other leases in the municipality are now required to pay eight percent.
In 1968 and 1969, those payments totaled just $4,230. Under the latest appraisal in 2008, the total value of the two parcels was $2.12 million and White Pass’s annual payment was $127,200.
The lease retains a clause that allows White Pass to terminate the lease at the end of any year with 60 days’s notice, but there is no such provision that allows the municipality to terminate the lease.
At the same meeting, the borough passed first reading of a budget amendment ordinance that shifts $100,000 from one legal category into another for the tidelands lease negotiations. So far they have had two executive sessions with the attorney Blasco either present or participating via teleconference.
There have been requests by the media that, because of the importance of the issue to the future of the community, negotiations be held in public.
Cochran said “nothing is secret” and he is not opposed to the idea of negotiating in front of the public or even having a town meeting on the lease, but he said he did not want “862 people negotiating a lease.”

‘Light’ quake rattles Skagway

By GAYLE DEATON

A light earthquake shook the town of Skagway for about 15 seconds on the evening of Dec. 9.
It happened just after 8:42 p.m. with a loud rumble and then a jerking of the ground. There was no damage from the quake, which initially was listed as having a magnitude of 4.4 or 4.6 depending on the source. According to the Alaska Earthquake Information Center (AEIC) based at the University of Alaska at Fairbanks, the “light” trembler’s final measurement came in at a magnitude of 4.2.
Local police dispatcher Willeke Burnham said she received about 10 phone calls from people when they felt the quake, either wondering what they’d felt or wanting assurance it was an earthquake.
“I think people were mostly just curious about what was going on,” she said.
Burnham was initially left to her own resources to establish that an earthquake had occurred.
“At first, I heard a really loud noise and I thought maybe something was going on with my earpiece on the radio or an ore truck was driving by,” she said. “The building started shaking, and it did the floating thing.”
At that point, she said she got online and checked the AEIC website where she saw the earthquake had already been reported. “Then, I started getting phone calls right away.”
However, Burnham said none of the calls were to report damage from the quake.
Cherie Atkins, another dispatcher with the Skagway Police Department, said she called Burnham after she felt the quake.
“There were a number of calls received at the police department,” Atkins said. “I was one of the calls. I was at home, and I live in a trailer so I thought something had hit it. I heard the noise before I felt it. I just heard a loud noise, and then felt this big jolt.”
Atkins said she looked outside, didn’t see anything, and then thought it might have been an earthquake. So, she said she called the police dispatcher.
“ ‘Did we just have one heck of an earth quake?’ ” she said she asked Burnham. “She said ‘yes,’ so I think she knew it right away.”
The next day, Atkins said she noticed some things were moved on the shelves at the police department building but no damage was done.
“Things that are usually up against the wall on the shelves were moved as much as an inch forward,” she said.
Tim Authier at Fairway Market said he found just one thing on the floor when he came to work – a package of coffee filters.
No damage reports were received as a result of the quake.
In fact, not everyone felt it.
Jim Jewell was hosting a birthday party and said he missed it.
“I am the only one who was in the garage last night who did not notice it,” Jewell said the next day while eating lunch at the Sweet Tooth Cafe. “My first indication something was going on was when everyone just stopped and then they started laughing and pointing at my two kayaks hanging up (that were shaking).”
Jewell’s lunch partner, Scott Logan, said he was watching TV at his Liarsville area home when he felt the quake. He said his dogs slept through it until he got up and started looking around, and called it “a boring earthquake” compared to one he experienced in the 80s.
“At first, we just thought it was a car wreck or something,” Logan said. “We could actually hear a loud noise. I don’t remember hearing an earthquake making a noise before but it was obvious it was an earthquake after that.”
Both Jewell and Logan said they did notice, however, how quickly the AEIC website, found online at http://www.aeic.alaska.edu/Seis/recent/sum/quakes/2010344_evid10135472/evid10135472.html, had details of what had occurred.
Jewell said one of the guys at his party checked the website from his cell phone immediately after the earthquake occurred and the 4.6 measurement was already posted.
“It’s posted there as fast as you can get on it,” Logan agreed. “We had a star on our location last night but I think it’s gone now – you only dance for a short while on that page.”
John Baldwin and his wife Tegan were sitting inside Mile Zero Bed and Breakfast, which they are caretaking, when they felt the quake.
“It sounded like a huge boom and the walls were like a jelly funhouse,” Tegan Baldwin said. “At the very first, we thought it was an ore truck going by.”
“Pictures started swinging on the walls,” John Baldwin said. “It was like being on a boat.”
Juneau resident Dan Lowe who was also dining at the Sweet Tooth said he flew into Skagway the morning after the earthquake. Lowe said he was staying at Captain’s Choice hotel in Haines at the reported time of the quake but didn’t feel anything that he could differentiate from the wind.
Natasha Ruppert, a seismologist with the AEIC, said the epicenter of the quake was located exactly15 miles southeast of Skagway. She said researchers had not determined which fault line this quake originated from, but it was located up in the Juneau Ice Field near the Canadian border.
“The biggest fault line near Skagway is the Denali fault line,” Ruppert said. “It (this earthquake) was quite a ways from Denali.”

Duff and Karla Ray named Helen B. Clark Award winners for 2010

Duff and Karla Ray were honored with the annual Helen B. Clark Award for Skagway Community Service at the Yuletide Ball.
In announcing the award, which is sponsored by the News, publisher Jeff Brady read the following from their nominating statement:
“This couple has called Skagway home for more than 30 years. During that time they have continually served the community in one form or another. He served on the City Council for several years as well as being a member of the Conventions and Visitor Bureau. She currently serves on the Chamber of Commerce board, and has been helping with the Community Food Bank for many years. And they have also both served the community through their volunteer positions in their church.
“Through their local businesses they have contributed to countless charities, fundraisers, and local events. They never let the daycare kids walk by without getting them all an ice cream treat. They have always strived to make Skagway a better place for everyone. They have provided first-time jobs for so many of the Skagway youth, coaching them and giving them advice and experience for working in the real world. They put a lot of love and hard work into the annual Kone Kompany opening and other events to make them special for the entire community.
“They believe Skagway has given them so much and look continually for ways in which they can give back. You will not find two people who love Skagway and serve the community more than Duff and Karla Ray.”
Karla Ray accepted the award and said that they indeed love Skagway and giving back to the community they love.
In addition to Ray, two members of the community were given special recognition certificates as new nominees for the award.
Teacher Dottie Demark was recognized for serving “tirelessly with the Arts Council to bring art and culture to the community through various concerts and workshops,” as well as for being on the Dahl Memorial Clinic Board and spurring local women on to walk in the Klondike Road Relay.
Kareen Hoover was recognized for dealing daily with travelers to the community at Services Unlimited, as well as helping out Paws and Claws and visiting veterinarians, and even being a “seamstress for many bachelors in town who do their laundry at her place.”
Helen Clark was the first recipient of Skagway’s Community Service award 24 years ago, and agreed to have the award named for her so generations would remember her volunteer spirit. The award can recognize volunteer work in the community over the past year, or a lifetime of service. Every November nomination statements are accepted from the public. Then a selection committee of past winners goes over a list of nominees from the past few years and chooses a winner. It’s always a tough job and the vote is often close, Brady said.

Above, Tte first of many hugs for Karla Ray, who along with her husband Duff (not pictured) won the 2010 Helen B. Clark Award, presented by publisher Jeff Brady. Andrew Cremata

ROBOT ADJUSTMENT – Kiara Selmer and Trevor Cox prepare their robot as fellow Winter Weezers Rosalie Westfall, Zoe Wassman, Denver Evans, and Gavin Murphy watch during a recent school demonstration. See School Robotics Feature. Gayle Deaton

BOROUGH DIGEST (complete digest in print edition)

Smoking ban update
 Mayor Tom Cochran said in his report at the Dec. 16 assembly that he’s had several requests to have the smoking ban ordinance issue put to a public vote through a special election. He said he knows Haines and Anchorage both put it to a public vote.
“It’s been done both ways,” Cochran said, adding that the assembly needs to work out its preference for which way it wants to go.
However, Assemblyman Dan Henry said in most communities a smoking ban ordinance is typically something that would be a function of the assembly.
“I certainly think it would be more appropriate to take the school budget to a special vote rather than a smoking ordinance,” Henry said, also noting, “a special election would cost us money.”
A revised smoking ban ordinance has been drafted and copies are available at City Hall for the public to review. Assemblywoman Colette Hisman said the Health, Education and Welfare committee will meet at 5 p.m. Dec 30 to listen to citizen input before putting the revised ordinance up for first reading at the Jan. 6 assembly meeting. – GD

Lobbyist salary increased
 Skagway Borough Lobbyist John Walsh’s contract at a rate of $32,000 per year expires at the end of 2010 so he submitted a contract proposal suggesting he receive an increase in his rate to $50,000 per year for 2011 and 2012. Walsh also stated in his request that he was open to negotiations.
Several assembly members expressed an appreciation of Walsh’s past performance and noted he is a well-known and well-respected lobbyist based in Juneau.
Assemblyman Dan Henry said Skagway was in a special situation “with our smallness and the largeness of the projects we find ourselves involved in” and suggested they take Walsh up on his offer to negotiate. Henry made a motion to offer Walsh a contract salary of $44,800 for 2011 and 2012 for a total of $89,600.
“John is probably worth it in my mind,” agreed Assemblyman Mike Korsmo. “He’s been huge. He knows everybody, and he’s very well respected. We’re really lucky we have a straight-shooting lobbyist working for us.”
Mayor Tom Cochran weighed in with his support as well.
“He’s a lot more than a lobbyist,” Cochran said. “He’s a consultant. He’s invaluable as far as I’m concerned.”
Assemblyman Dave Hunz agreed with the consensus to increase Walsh’s salary but countered with a motion to increase it to $42,500 for 2011, and then $47,500 for 2012 for a total of $90,000.
Henry asked why the difference with the totals coming out so close.
Assemblywoman Colette Hisman explained she preferred the idea of increasing the salary to $42,500 the first year following up the next year with a $5,000 raise to $47,500.
“It shows a little more respect to raise the rate of pay for the next year,” she said.
Assembly members agreed to increase the 2011 through 2012 contract rate for Walsh to $42,500 in 2011 and $47,500 in 2012.
Mayor Cochran directed Manager Tom Smith to contact Walsh with that offer.
“Please tell him how much we appreciate him,” Hisman added. – GD

Christmas Bird Count Results from Skagway - View Preliminary Bird Count Results (pdf) from Dec. 18-21 counting period by Skagway Bird Club.