Tim Forester works on the Skagway Fire Hall apron project with the Hunz & Hunz concrete crew. DL

Bounds and city go to court
Preliminary injunction denied on Monday

A Ketchikan judge on Monday denied local contractor Bert Bounds’ motion for a preliminary injunction to prevent the City of Skagway from paying Hunz & Hunz Enterprises for the Fire Hall Bay 4 Interior Remodel contract.
With this decision, the city can pay H&H for the job with approval of the city council. Some money will be held back, said City Manager Bob Ward, to address some of Bounds’ concerns about the project’s alleged code violations.
In his Memorandum of Decision, Superior Court Judge Trevor N. Stephens wrote:
“Mr. Bounds has raised some serious and substantial questions, as discussed above (in the 45-page decision), concerning the validity of the Project contract. He has not, however, done so with regards to the damage issue. He has alleged ‘favoritism.’ The evidence in the record at this point reflects that no favoritism was involved. He has alleged that Mr. Hunz should be held (to) some extra-ordinary knowledge of the SMOs (Skagway Municipal Ordinance) and Title 36 and that, as a result, he did not act in good faith. The evidence in the record at this point reflects that such super-knowledge should not be imputed and that Mr. Hunz did not act in other than good faith. Thus, though Mr. Bounds has raised the issue, he has not raised serious and substantial questions regarding the same. Therefore, the Court’s conclusion is the same under both tests.
“Mr. Bounds’ motion for preliminary injunction is denied. It is therefore not necessary for the Court to address the laches issue (unreasonable delay in asserting a right or claim). If the City desires that the Court do so it may file a motion to dismiss.
“The Court notes that, though an injunction is not being entered, the Court is not ordering that the City issue check #1652. The City has a legal duty, independent of this lawsuit, to take reasonable steps to assure that the work performed by HHE (Hunz & Hunz) complied with the Project specifications and with applicable codes. The City should make sure that such steps have been taken before paying the entire sum to HHE.”
Bounds said Wednesday that he expected the judgment to happen the way it did.
“I thoroughly expected that to happen,” said Bounds. “ I’m trying to make people aware that we have procedures to follow.
“We lost that but we’re not done.”
The case of Bert Bounds doing business as Bounds Electric & Enterprises vs. the City of Skagway had its day in court – two in fact, April 26 and April 29. The judge’s order stems from this hearing.
The first day both parties were in front of Superior Court Judge Stephens in Ketchikan and the next, Mayor Tim Bourcy and Ward participated by teleconference from Juneau with the city’s lawyer, Bob Blasco. Bounds teleconferenced from Skagway and his lawyer, Ron Black, from Anchorage.
On April 12, Bounds won a temporary restraining order from Stephens which kept the city from paying H&H for the Fire Hall Bay 4 Interior Remodel contract.
Black and Bounds contended the city violated city code by awarding the contract to Hunz without the bid going to the council for approval, or being signed off by the mayor, and that the solicitation to bid did not contain all the contract terms and conditions. He further contended the city manager cannot award a contract over $10,000 per city code. Also, no other bidders for the contract were notified within five days that the job was awarded to H&H.
Bounds also claimed Skagway taxpayers were harmed by the multiple violations of the competitive bidding statutes.
Black also questioned the conflict of interest of Stan Selmer, a councilmember, whose wife is the office manager for H&H, and that the $16,000 a year she is paid does constitute a substantial financial interest. Bounds also contended the job was not completed on time, and had serious electrical code violations when he went to observe the project.
Bounds sought from the court an order permanently enjoining the city from making payments on the Hunz contract until the city can prove in court some basis for payment and the proper amount of the payment; for the city to pay attorney’s fees and all costs of litigation; and any other relief the court may decide.
The case will continue to wind its way through the court, with a pretrial hearing set for July 1.
The city did file an initial motion to dismiss, but the judge hasn’t ruled on it yet. Ward said the city intends to refile a motion to dismiss when the time is “ripe.”
Feb. 12, Bounds was awarded the Fire Hall contract, but in the late afternoon, on the advice of his attorney, he refused to sign the contract with $1,000-a-day liquidated damages included. Bounds said he was not aware of the damages and they did not appear in the bid packet. The same day, Ward awarded the contract to the next lowest bidder, Hunz & Hunz Enterprises, whose owner, Dave Hunz, is a city councilmember.
Bounds entered into the city’s appeal process for redress of his grievances. April 9, Ward denied his appeal saying it was filed in a timely manner and that it was due Feb. 7, but was not filed until March 4. If the liquidated damages had been included in the solicitation to bid, would Bounds even have bid, and if he did would his bid have been the lowest amount, Ward questioned in his report to the council on the appeal.
“Since he refused to sign the contract, it appears he would not
have bid on the contract,” Ward wrote.
At the city council’s May 2 meeting, Bourcy, in the role of commissioner under state Title 36 on procurement codes, said he reviewed Bounds’ appeal and rejected it.
In the interest in doing it in a fair manner, Bourcy said the city would pay Bounds the $900 that Bounds claims he spent in preparing his bid for the Fire Hall contract.
Hunz abstained from voting on or discussing the matter.
“This (referring to the bid process) is part of the problem and difficulty we had when we adopted state statutes that don’t overlay with out city ordinances,” Bourcy said. “We’re dealing with a process that doesn’t fit. After this is all settled, we need to review the statutes we adopted from the state.”
“We’re rejecting his appeal, what would have happened if we accepted his appeal,” asked Councilmember J. Frey.
“We would have to rule on it and pay the $900,” said Bourcy.
“So, we’re giving $900,” said Frey. “I’m missing something here.”
“If we’re giving the $900, it seems to me we should have accepted the appeal,” said Councilmember Colette Hisman.
Ward said that Bourcy is the only person in Skagway that can be the commissioner under Title 36, and that Bourcy rejected the appeal and it won’t go to the council for approval or discussion, but the matter of compensation would.
“This is a gesture for the cost of the doing the bid,” said Ward. “It recognizes that our adoption of state statute doesn’t fit well in Skagway.”
“What I want to do is move forward...,” said Bourcy.
“I will vote yes, but I want to look at what we did,” said Hisman.
“What I’m trying to do is accept responsibility for what we did,” said Bourcy.
The vote to compensate Bounds for his costs failed 3-1, with Henry, Korsmo and Frey voting yes and Hisman voting no, and Hunz abstaining.
Later, Hisman said she didn’t vote for the offer because she didn’t think it was the right thing to do to redress the situation.

City lobbyists pull substitute bill through Senate
Bill passes Senate on reconsideration Thursday 16-4

There were high fives all around, after a bill relating to mergers and consolidations of boroughs passed the Senate Judiciary Committee May 1.
Senate Bill 296 was seen as a fire wall for Skagway’s move for its own borough, and to protect it from being consolidated or merged. Skagway could have been annexed if the bill had not passed.
Mayor Tim Bourcy and city lobbyist Jan Wrentmore waited at City Hall for two-and-a-half hours for the Judiciary meeting to convene May 1. After Bourcy testified for the bill, he was told the amendment that Skagway lobbyist John Walsh pushed for was already included in the bill and approved, and so Bourcy’s concerns had already been addressed.
The amendment to protect the right to vote on mergers, consolidations and annexations passed, and the bill headed for the Rules Committee.
“Skagway is in an unorganized borough,” explained Wrentmore later. “Our question is if you look at state statues we were safe, but the proposed new regulations in this bill would make us unsafe. It contains language that would weaken our position.”
The Local Boundary Commission, which approves or disapproves borough petitions, recently adopted new rules that allowed annexation without popular vote of the impacted area. HB296, as amended, was aimed to redirect those rules to state statutes.
Wrentmore went down to Juneau the week of May 6 with Bourcy and city lawyer Bob Blasco to lobby for the bill. Wrentmore waived her fee for this year, she said, because she felt Walsh’s expertise was needed more.
“The amendment doesn’t protect us from being put into a borough by the Legislature or the Boundary Commission, but does protect us if Haines tries to annex us,” said Wrentmore. “It gives the small communities the opportunity to vote.”
Wrentmore said she hadn’t intended to testify at the House Finance Committee hearing, but a senator pulled her aside and advised her she had to.
Haines Borough Assembly did pass a resolution last year that it would not seek to be included in a borough with Skagway.
Wrentmore got up and told the committee hearing that Skagway was the oldest incorporated city in the state; that it has been self-governing for 100 years; it collects sales, real estate and tour taxes; it funds 50 percent of its own school’s budget; and it paved its own streets.
“We rarely come to the state with our hand out for money,” Wrentmore told the committee.
She said heads were bobbing in agreement as she was speaking, and it was a good indication.
The bill now goes to Gov. Tony Knowles. –DL

‘Designated heretic’ offers advice for tourist towns
Try and stay true to the character of the town, he tells audience
Hal Rothman is one of those rare historians who spends as much time looking forward as looking backward, and he admits it sometimes gets him in trouble in small towns where folks don’t necessarily like to hear what he has to say.
Situated in Las Vegas, where he teaches at the University of Nevada, Rothman has been able to observe tourism on its grandest scale, and also venture into small towns that hope to embrace the industry. Skagway has welcomed tourism since the gold rush, but only in the past decade have visitor numbers reached what would be considered “industrial size.” Rothman had some keen observations after watching Skagway deal with its first boats of the season.
The historian was here in early May to speak to the annual training sessions for National Park Service interpreters and rangers, which are open to the public. Rothman’s 1998 book, “Devil’s Bargains - Tourism in the 20th Century American West,” won a prestigious prize, and his advice is sought throughout the West. He doesn’t think tourism is bad – “If I did my book would have been called ‘Tourism Sucks’” – but it “does a lot of things to a lot of places,” he said, and critics in the industry have called him the “designated heretic.”
At the beginning of his talk, he joked that Alaska had moved from what once was a resource-based state to “the Princess state.” Many towns in the West have sought tourism, especially in areas where logging and mining have declined. And all are going after the same market, which the cruise lines have already tapped.
“There’s no shortage of potential tourists,” Rothman said. “And the reason you are going to get more people is that the richest group of people are retiring, people in their 50s and 60s. You’re in a pretty good position here.”
But he cautioned that tourism, with its lower paying, seasonal jobs – most with no health or retirement benefits – should not be considered a “replacement economy.” And it often creates an underclass, as well as powerful growth coalitions, usually driven by real estate developers.
Roth was surprised to learn that Skagway currently has no Realtor, but said it was apparent that many who do own property in downtown Skagway have driven up rents to the point where local residents cannot compete for the retail spaces. “This leads to tension,” he said, especially when visitors move in to stay, and demand more than the town can offer.
He said local residents need to maintain their town’s identity, and not become what the visitor industry may want them to be.
“They will challenge the idea of who you are,” Rothman said. “In essence you end up playing yourself on TV ... or a version of yourself to please the visitors.”
In worst case scenarios, the town’s residents will let growth overwhelm them to the point where “you look in the mirror and not like who you are,” he said.

Hal Rothman speaks at the NPS auditorium. - JB

But Rothman said Skagway has controls already in place to prevent this from happening. These include the seasonal nature of the Alaska tourism economy, which controls access to the community, and the National Park Service, which has assisted the town in maintaining the historical integrity of Skagway, in addition to being an environmental watchdog. “They (NPS) do a good job of tamping down change,” he said but planning must come from the community.
In order to mitigate impacts, towns that jump at tourism need to “plan, prepare and execute.” Planning and zoning in target areas for growth is a key, and he commended the city’s moratorium on tours in the Dyea area. “That indicates that you think that place is special,” he said.
When informed of the tour-selling dilemma on Broadway, where the city has unsuccessfully tried to regulate the hawking of tours from doorways and spaces between buildings, Rothman had no solution.
“There are First Amendment issues,” he said. “It’s like the porno distributors in Las Vegas. The only way you can get them is if they are impeding traffic.”
Rothman said a major key to having a successful tourism industry is getting people to spend the night. Overnight visitors are more inclined to learn about the area, stay longer, and spend more. To them, Skagway is not just another port.
Rothman was mistaken when he said people won’t drive to Skagway. When told that many do drive here – more than 82,000 arrived on the highway in 2001 – but that room nights have been in decline in recent years, he said Skagway may need to freshen up its message to get more people to come, stay and feel welcome.
“People don’t go on vacation to get educated, they go on vacation to be told how good they are,” he said.


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