By DAN FOX
At her first meeting at the head of the Borough Assembly table, Mayor Monica Carlson began pushing for a different direction regarding discussions of a memorandum of understanding (MOU) with the White Pass & Yukon Route Railroad.
The MOU currently contains an amendment to the current 1968 lease, which is in effect until 2023. It also includes language governing remediation in the Ore Terminal Basin and a new 15-year tidelands lease agreement post-2023.
“Sitting here as an assembly, we all have a decision to make,” Carlson said. “We’ve spent five months of back and forth negotiating with White Pass. We’ve missed the 2019 deadline, but we need to be ready for 2020.”
Carlson called the recent election a “mandate for change,” and expressed concern about the ongoing MOU discussion using up time and resources.
The mayor proposed halting negotiations with White Pass, formally informing the company that the municipality would “work in partnership the next five years to ensure a smooth transition of ownership” and negotiate building a floating addition to the Ore Dock to accommodate larger classes of cruise ships.
She also proposed the municipality contribute $1.5 million in contamination cleanup and enter into an agreement to purchase the Ore and Broadway dock assets.
Carlson then opened the floor to the assembly members, to take the temperature of their thoughts on her suggestions.
New Assembly Member David Brena said he understands all the work that’s been put into the negotiations, but that he feels a lease is not the way forward for the municipality.
“The lease extension proposal would pay Skagway $250,000 a year,” Brena said. “The municipality can earn more if we own our own waterfront.”
Assembly Member Steve Burnham Jr. said he thinks there is a lease out there that is mutually beneficial, but that he doesn’t think the document currently being discussed is that lease.
Pointing out the semantics of the situation, Burnham said the municipality is not negotiating a “lease extension,” but an amendment to a current lease and a new lease “that has entirely different language than the current lease we’re under.”
“The current lease we’re discussing is not $250,000 a year, it’s $250,000, and then the next year it increases three percent, and so forth,” Burnham said. “And if we put investment into the infrastructure, it gets assessed, and there are code requirements that increase the lease payment.”
Continuing down the table, Assembly Member Orion Hanson said Skagway cannot afford to lose sales tax.
“That is primarily where our budget comes from as a municipality,” Hanson said. If the municipality loses business because it cannot accommodate larger cruise ships at the waterfront, Skagway will see an economic hit, Hanson said.
“And we’re going to see that economic hit across the whole community,”
Hanson said, adding that his support of an MOU could be called “fiscally conservative,” and a fiscally safe way to keep business as usual happening in town.
“I think if we just abandon the MOU today…then we’ve eliminated an option, and it’s a very stable option,” Hanson said.
After the assembly members made their comments on the situation, Carlson announced her intent to call a retreat for the assembly to spend a day discussing the MOU, bring it back to the table and present it to White Pass. Borough Clerk Emily Deach said the retreat would have to be an off-site work session, to be in line with the open meetings act.
At several recent meetings, assembly members have expressed some frustration at the negotiating process. White Pass Executive Director of Human Resources and Strategic Planning Tyler Rose addressed the assembly at the meeting, and acknowledged some of the frustration at the table.
“There’s been frustration on the White Pass side as well, but we understand, and I hope the community comes to understand, that negotiations by their very nature are difficult,” Rose said. “Sometimes communicating the needs of a variety of individuals and getting that together and going from proposal to proposal, things get lost.”
Rose said that a report by Golder Associates Ltd., including a survey and risk assessment of the contamination in the Ore Terminal Basin, should be completed in the next month.
“Right now we’ve spent a pretty substantial amount of money on the Golder report,” Rose said. “It is not an effort to delay things, it is not an effort to not dredge. We are committed to some form of dredging, but we need the risk assessment first to put together a remediation plan.”