EDC will become non-profit
Council votes to disband EDC board

By DIMITRA LAVRAKAS
With five of six councilmembers present at the Skagway City Council’s May 3 meeting, the council voted for the ordinance to reorganize the city’s Economic Development Commission into a non-profit organization.
With Councilmember Dave Hunz absent, Councilmembers Tim Bourcy, Stan Selmer, Dan Henry, and J. Frey voted for the ordinance, and Colette Hisman, council liaison to the commission, voted against the move.
“I just wanted to commend the people who have served on the EDC, who have put in their blood, sweat and tears to move the EDC forward,” said Hisman. “It was a pleasure to be a liaison.”
City Manager Bob Ward said he believed by making it a non-profit, the organization will have more room to move.
An amendment to the ordinance, proposed by Selmer, was adopted that would shorten the time for the commission’s startup from six months to two. It passed 4-1 with Frey voting nay.
But the city council would still have some say in who’s appointed. The Civic Affairs Committee would submit seven names, forward them to the mayor, and then the mayor will go to the council for their approval. As before, there would be a liaison from the council on the EDC board.
All records of the EDC would be the property of the city and would remain in the city’s possession.
A number of people addressed the demise of the current EDC, with most in favor of the change.
Irene Henricksen said she thought the council was “throwing the baby out with the bathwater,” and that the council’s move was a slam to the people who had worked on the EDC board. She also thought that EDC Director Candice Wallace did not have sufficient support from the city when she took over the position.
“I don’t feel you have really supported the idea of economic development in Skagway,” Henricksen said.
Bourcy said it has been the desire of EDC to protect the confidentiality of potential business owners who come to them for advice. If it were a non-profit public entity, then all communications would not have to be made public.
Wallace believes it was ethical problems that caused the EDC and the city to part company,
“There were some severe ethical differences,” she said in an interview at the newspaper office. “A lot of people told me we were set up to fail from the start.”
Asked why, she said because she never got any support.
“We just wanted to do things right,” she said.

Peterson Sullivan auditors Matt Mason and Jessi Brummett work on the city's audit in late March. DL

Audit finds no money missing

Mayor John Mielke released the report from the city’s auditors, Peterson Sullivan of Seattle, at the council’s May 3 meeting.
“I was asked not to release it, but except for some grammar, I wouldn’t change it,” Mielke said.
Mielke ordered the audit to clear the air after an inquiry by the State Troopers and Skagway Police turned up nothing last month. The inquiry resulted after KHNS passed on a tip to the troopers about alleged embezzelement and illegal hiring practices at city hall.
After inspecting approximately 2,560 checks, the auditors noted two checks that were signed by only one person or two employees. The City Code requires all checks to be signed by a Finance Committee member and a city employee. The auditors recommended the city follow its code.
Three checks out of 109 were found that were not supported by either a purchase order or vendor invoice, and the auditors recommended that checks only be written after receipt of a vendor invoice.
Payments to a vendor should include a signed receipt by a city employee. The auditors suggested that two employees sign the receipt and note for which project the item was used.
No exceptions were found in payroll checks.
Expense reimbursement, the auditors noted were supported by adequate documentation, but it was recommended that all food and meals receipts include the individuals in attendance, who the item was for, and the business purpose.
They also suggested that city departments submit their cash logs to the city to ensure their calculations are correct. It was also recommended that the Economic Development Commission issue receipts to the people who bought the goods at the fund-raising auction, showing the purchase price and the fair market price as required by the Internal Revenue Service for charitable contributions.
There was a disclaimer at the bottom of the report.
“We were not engaged to, and did not, perform an audit, the objective of which would be the expression of an opinion on the specified elements, accounts or items. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
“I’ve heard already we haven’t done the right one (type of audit), because some folks wouldn’t accept one, except one that would find something,” Mielke said.

Mill rate may go up as much as one mill
Because of the budget shortfall at the Skagway Medical Clinic, the city may have to raise the mill rate as much as one mill.
While the clinic was short $125,000, after Tuesday night’s Health, Education and Welfare Committee meeting, the clinic appears to be $150,000 in the red.
“We do have some level of social medicine in Skagway,” said City Manager Bob Ward by phone.
The council is considering using some of the Tongass Forest Funds to subsidize half of the shortfall, Ward said. The other half would come from property taxes.
The proposed mill rates would be: Service Area I, 9.20 mills; Service Area II, 7.59 mills; Service Area III, 6.07; Service IV, 3.96; Service Area V, 1.66 mills.
There will probably be a special city council meeting before the end of May to make the final decision on the mill rate, Ward said.

Wayne Ames and Roy Nelson of the city's Public Works Dept. move a S.M.A.R.T. bus sign in preparation for the visitor season. DL

Horse tour still uncertain
The council giveth, the council taketh away, and the mayor gives it back

By DIMITRA LAVRAKAS
The Skagway City Council at its April 19 meeting approved a hitching post at Sixth Avenue near the city’s public bathrooms for Ron Walker of Haines Carriage & Trolley Co. to tether his Clydesdale horses.
On May 3, it denied Walker’s proposal to bring his business here, by placing a moratorium on animal-drawn conveyances until July 1.
But on May 7, Mayor John Mielke vetoed the council’s action, saying he agreed with the concept of a moratorium, but didn’t think the timing is appropriate.
“I don’t believe it’s fair to deal with congestion on a company-by-company basis especially this late into the year without warning in advance to prevent someone investing money into a venture that won’t be permitted,” he wrote in his letter to the council.
The council has an option to override the veto at the next meeting on May 17, or within 21 days of the action.
Walker wants to run two carriage tours that would carry 20 passengers in a carriage that ,with the horses, would be approximately 33 feet in length.
A concern arose over traffic congestion on Broadway and that the horses would impede traffic. As a result, the council decided to look into congestion on Broadway and how to relieve it. There was also a delicate discussion of what horses leave behind.
“There’s a question of sensitive nature,” said Hisman. “Years ago, we had a problem with refuse – what the horses leave behind.”
Debbie Walker, representing Haines Carriage, said the horses would be fitted with bun bags.
Casey McBride asked what they would do about the urine smell, and Walker said they would go back and spray the spot.
“I don’t want this to be a popularity contest,” said Charles Doland. “We have a problem of congestion.”
Sharon Garland, who owns a horse and buggy tour here, said her operation is the appropriate size for Skagway. She also said she wasn’t concerned with dollars and someone coming here and taking money out of her pocket, but that she didn’t see a need for the hitching post. She had concerns about what may happen if the driver leaves the horses unattended.
Robert Murphy, who has a horse tour in Dyea, said the first thing he thought about when he decided on horses was having a place for them.
Walker said the horses would be kept three miles out of town on Bert Bounds’ land at Liarsville. Bounds said the manure would be composted on the property.
Tina Cyr had a concern over the speed of the tour.
“Don’t fix what’s not broken, enough is enough” said Dorothy Brady.
“Under this moratorium, will my burros be able to come down to the bar for Cinco de Mayo?” asked Jan Wrentmore.
Steve Hites said his contribution to solving the congestion problem was to cut his streetcar fleet in half this season by using vehicles that can carry twice as many.
“With all of this talk about hitching posts and bathrooms, I have to go to the bathroom,” said Mielke, and a recess was called.
When the meeting resumed, Mielke said he wanted to be fair to everyone, but there are a lot of buses on the street and they’re big and slow.
“The city of Skagway needs to polish the apple – we have a great community here,” said Councilmember Dan Henry. “...Now we have to talk about congestion on Alaska Street because people are avoiding State and Main. We’re pretty much at our limit.”
Vice Mayor J. Frey asked what the city had told the Walkers, whether they could come and operate here.
“There is nothing here now to preclude them from operating,” said City Manager Bob Ward. He said the resolution is a stop-gap measure until the congestion issue is addressed.
“This is kind of embarrassing, we approved the hitching post,” said Councilmemebr Stan Selmer. “...The size of the vehicles do make a difference. What impact would the moratorium have on your business if you couldn’t come until July 1?”
Walker said they were told their business would be OK and ordered two carriages for $30,000 apiece.
Mielke said that fact was a little disturbing to him, and also that council had agreed on a hitching post and now were not in favor of the business.
“We have been consistent in our efforts to deal with congestion – the moratorium on walking tours, single provider bus service, and the moratorium on commercial use of Dyea Flats,” said Selmer. “It’s unfortunate if the Walkers did get an OK to come to Skagway and then spent the money.”
Selmer worded an amendment to lengthen the moratorium until Sept. 1. But before that could be voted on, Convention and Visitors Bureau Director Buckwheat Donahue said he checked to see if the tours were pre-sold on ships, and found they were not.
“I strongly urge you to continue with the moratorium,” Donahue said. “We’re off on the wrong foot with this company from Haines. This doesn’t bode well for working with them in the future.”
Walker said she didn’t want to divulge which ships they would be carried on, and that they are an add-on tour for overflow when other tours are booked.
“I agree we should not throw up barriers to business, but a lot of people have raised concerns and I’m not satisfied the Walkers have addressed those concerns,” Selmer said.
There was a motion to table the moratorium, but it was voted down with Councilmembers Henry, Selmer, Colette Hisman, and Tim Bourcy voting no and J. Frey, yes.
Then it was back to the main amendment.
Henry asked if the city had any legal exposure with having the tour company here, and Ward said whatever happens on a city street is exposure.
After several failed votes to approve an amendment, the council returned to the original resolution and passed it with all but Frey voting for it.

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