AP&T behind, but not down, say officials
Company hopes to meet obligations soon

With rumors of an Enron-like scandal at Alaska Power & Telephone, company officials are trying to reassure employees and customers that job cuts will not be deep, the lights will stay on and the phones will work.
“We’re a little bit upside down now,” said President Bob Grimm from the Port Townsend, Wash. headquarters. “...AP&T has been in the business of providing services in Skagway since 1957. We’re lucky to have knowledgeable and capable people who live in the community working for us. The lights will be on.”
The problem, said Executive Vice President Stan Selmer, is that the company’s debt to equity ratio is off.
“There was $23 million for Goat Lake, $16 million for the GTE loan, $7 million for Black Bear Hydro on Prince of Wales – that’s $46 million in bond debt,” Selmer said.
The Securities and Exchange Commission requires a 30 percent equity to 70 percent debt, so the company has a plan to right that beginning January.
“It took an audit to find out how far out of compliance we were,” said Selmer.
AP&T expanded in many directions over the last few years, too many say some former employees and current stockholders who described it as “Enron of the North” but did not want to be quoted.
In April 2001, the company bought 40 percent ownership of an Anchorage construction company, Summit Alaska, and invested money in Summit’s gravel pit operation, Alaska Rock.
At the time, now-resigned AP&T Chief Financial Officer Howard Garner, told the Alaska Journal of Commerce, “As a public utility we want to keep it very separate. We look at this as an investment...For us this represents an investment opportunity that complements our long-term business plan in construction.”
Alan See, formerly of Skagway, was made president and chief executive of Summit, but he is no longer with AP&T or Summit, having resigned from his job, but is still on the board of directors. He could not be reached for comment as his phone is unlisted in Washington.
Grimm said he expects AP&T’s stock to dip further until the financial situation is corrected. Employee’s retirement funds are in a separate trust, he said, and are safe.
According to the NASDAQ Web site (see graphic below), AP&T stock has dropped from $24 a share in August to $10 last week.

Asked about an off-shore account in the Cayman Islands, Selmer said the money in that account is from the Pasa Bien hydro project in Guatemala.
“So why would we want to devalue our money 64 percent, when we have our own project and employees in Guatemala,” said Selmer, referring to the corporate tax the company would have to pay if it transferred the money to the U.S.
“I feel confident that the plans we’re making which includes the sale of new equity in the company is what is necessary to fix AP&T,” Selmer said.
Company shareholders authorized the sale of new equity (stocks) at the September meeting, Selmer said, “but the process of and the schedule for selling new shares has not been established at this time.”
This week, Alaska Telephone Co., AP&T’s telephone subsidiary, filed for a rate increase with the Regulatory Commission of Alaska – an increase of 17.08 percent. The residential line charge would increase from $13.80 per month to $16.60, the commercial, $18.90 to $22.13. The stated reason in the application is a “revenue deficiency of $488,038.”
What this means, ATC’s President Mike Garrett said, is that the commission required the company to file a change of depreciation rates. Garrett said the filing has nothing to do with the company’s financial situation.
“There have been significant changes in the telecommunications environment,” Garrett said. “This doesn’t mean the commission will accept our rates.”
It’s a multi-step process, we won’t even have a hearing until July of 2003,” he said.
Meanwhile, customers will receive with their bills, notice of the filing and the hearing schedule.
In related news, Selmer said the Otter Creek Hydro Project was issued its license permit from the Federal Energy Regulatory Commission Oct. 13.
“We’re still in the running to get the $5 million in federal funds slated for construction,” Selmer said. “We’ll know about the funding issue before the end of the year.”
By the way, he said, the name of the project will be officially changed to the Kasidaya Creek Hydro Project.

Reception attendees got to see a video of Fran Ulmer and later talked to her via teleconference. -DL

Candidates agree with Skagwayans
They support borough effort, no Juneau road

The weather whipped them all, well, almost all. Only Gary Graham, District 5 Republican candidate for state representative made it through our weeks-long foggy skies. He was in Haines and it was actually clear enough to fly. If he had been in Juneau, he’d have been a no-show.
Voters arriving at candidate receptions saw nothing but campaign literature, whistles and key chains, plates of cookies and brewing coffee – but no candidates.
Frank Murkowski and Loren Leman, Fran Ulmer, Albert Kookesh and Georgianna Lincoln all made dates, all had to cancel.
But what the Skagway News could gather from contacting state representative and senatorial candidates, they unanimously agree that if Skagway doesn’t want a road, it shouldn’t have to have one.
“I’m not there to dictate what any community wants or doesn’t want in the community,” said Sen. Georgianna Lincoln. “If that’s not something the community wants, then I am not going to support that and will do all I can to prevent that from happening.”
Rep. Albert Kookesh was more to the point – “No,” was all he said when asked if he supported a road.

House candidate Gary Graham, left, talks issues with Paul Taylor at the WP&YR depot. DL

Graham, a Cordova city councilmember, said it was one place where he and Murkowski parted ways. Murkowski has said he favors completing the road’s Environmental Impact Statement. Ulmer has also supported continuing the EIS process. Graham is running against Kookesh.
“I’ve been fighting a road in for 24 years in Cordova,” he said. “That’s where Frank and I disagree. If the people of Skagway and Haines don’t want a road, then the people of Skagway and Haines shouldn’t have it shoved down their throat.”
Mac Carter, Republican candidate for state senator from Central running against Lincoln, e-mailed: “Personally, I believe the decision should be left up to the people of that area and the Juneau area. Not the Legislature!”
As for the other important issue facing Skagway – borough incorporation, candidates unanimously said they would support Skagway’s efforts to form a borough.
“Sure,” said Kookesh, who pointed out the intent of the original language was to get as many cities to incorporate as possible, but that has not happened.
Lincoln said she has worked with Sen. Carl Morgan (Aniak) to hold the mandatory borough bill in his committee to prevent it from going forward.
“I have been adamantly opposed to mandatory boroughs, and have fought that tooth and nails,” Lincoln said. “...I represent communities with a dozen people up to the thousands, and one size doesn’t fit all. What is a model in Alaska? Every area is so different, nothing just fits into a model.”
“I don’t see what’s wrong with a single-city borough,” Graham said.
“I can tell you how we in Central feel, we want our own borough and don’t want to be included in someone else’s! So the answer is yes.”

A coho salmon makes a break up the falls at Liarsville’s Gold Rush Trail Camp. A larger than normal silver run is happening all over Southeast, say Alaska Department of Fish and Game staff. See story below. - Dimitra Lavrakas

Natural silver run a screamer this year
Fish and Game says it’s the same all over Southeast

They’re lined up like Boeings at Kennedy Airport. A natural silver run, the biggest in recent memory, is screaming up the Skagway River and into the creek that runs through Liarsville.
At the Gold Rush Trail Camp, they come to a 45-degree waterfall, where they hurl themselves up the boiling water only to be washed back down. It’s kind of a sad thing to watch, but then it’s an indication there’s still a strong, natural silver run. It’s something seen in old photos of gold rushers fishing in the river, holding up some big fish. These are some whoppers too, along with the odd Dolly Varden looking for a free meal of fish eggs.
The creek that is known by many names, said resident Stan Selmer, can be called Lillegraven, Sanitarium, Atchinson, or Liarsville – it’s your pick, he said.
“When I was a kid it was the same way, you could walk on the backs of them,” Selmer said.
Selmer said Bert Bounds, who lives along the creek, had asked for a valve to be added to the dike so he could control the flow of water when the fish are running.
“What happens now, is the fish die in the river when the water isn’t high enough for them to get in,” Selmer said.
Bounds was out of town and couldn’t be reached for comment.
Ben Kirkpatrick with ADF&G’s Habitat Division said the Lillegraven run depends on where the main channel of the river is and whether it’s anywhere near the entrance to the stream, not if the water is high enough to pass into the creek.
Jerry Myers Fish Hatchery Manager Rex Kilburn said there had been an attempt to catch some silvers and strip eggs in Pullen Creek, but the ones captured had already spawned or were males.
Randy Ericksen, fisheries biologist with the Alaska Department of Fish and Game Sportfish Division in Haines, said it’s happening all over Southeast. With the low coho prices this year, commercial fishing has been light, and coupling that with the large run of coho smolt observed last year, makes it one of the biggest returns, he said.
So, get your fishing pole out, there are no restricted areas, Ericksen said, except on Pullen Creek above Second Avenue.


Belisle, Carlson vie for open school board seat
The Skagway School District received two letters of interest from residents for the open board seat by the Oct. 22 deadline. Darren Belisle and Bob Carlson were interviewed by board members and the public at a special School Board meeting on Thursday evening after this issue went to press. It was the first use of a new board policy requiring public participation in the process.
The board will make its selection at its regular meeting on Oct. 29. The seat became vacant Oct. 9 with the resignation of Tom Cochran for personal reasons.– JB

Development corporation awarded grant
The U.S. Department of Agriculture Rural Development Office in Palmer notified the Skagway Development Corporation Oct. 18 that the SDC has been awarded a $118,600 Rural Business Development Grant, according to a SDC press release.
The SDC is a private, non-profit economic planning and development organization founded earlier this year.
The corporation applied for the grant in June, according to Stuart Brown, SDC president. The application was “scored” and ranked at the regional office in Palmer, and then sent to Washington D.C. for national funding competition.
“The grant funds will be used for the SDC’s Revolving Loan Fund Program,” Brown said, “which is aimed at providing low interest loans to start-up businesses and expanding existing small businesses in Skagway.
“Generally, these are folks who have been turned down by the bank for one reason or another, usually not related to credit problems,” the release said. “As the loans are paid back, the funds are loaned again to other small businesses. Participants of the program will be assisted in writing a business plan, take part in a mentorship program, and undergo a review process and monitoring throughout the course of their loan.”
Two local businesses were included in the original application, with additional funds included to be loaned out to more businesses. Brown added that anyone in the Skagway area who is interested in the revolving loan program and is considering starting a new business or expanding their existing business is encouraged to contact him or one of the other SDC board members – Lorraine Cook, Curt Dodd, Lynn Herbig or Janilyn Heger to learn more about the program and the application process.
Other grants being researched or applied for include funding for the Rec. Center swimming pool, the rifle range relocation project, childcare center development, a business incubator, and a learning center/boarding school/vocational-tech center proposal.- DL

• SPORTS: Trip from Hell

• EDUCATION: Author visits

• WHAT THE HECK? - NPS rocket ship?

To read every story in The Skagway News, you have to subscribe to the real thing. Cost for an out-of-town subscription is just $35 a year second class mail or $45 a year first class mail. We take credit cards. Call us at 907-983-2354, 9 a.m. - 5 p.m. weekdays Alaska time, or just mail a check to Skagway News, Box 498, Skagway, AK 99840.