By DAN FOX
Following a retreat aimed at solidifying the Borough Assembly’s direction on a waterfront lease with the White Pass & Yukon Route Railroad, the assembly planned to meet again on Nov. 8 for a special session to finalize details on a memorandum of understanding with the railroad.
Recently-elected Mayor Monica Carlson, who called for the retreat, said it did not really accomplish what she had hoped it would, however the retreat may have gotten the assembly one step closer to finishing the process all the same.
“We’re centered, we’re going to go forward and we’ll see what happens,” Carlson said. “I wanted us to really – I think more than anything – concentrate in on the MOU, but I think it was good to get all this out, and so everybody understands, and we’re going to move forward.”
Carlson said the assembly is close to being ready, with just a couple things that still need to be tweaked in the MOU. Carlson added that she thinks the recent election – where she and Assembly Member David Brena won their write-in bids for their respective seats – was a mandate by the people on where the municipality should head. As an assembly member prior to the election, Carlson was vocal in the belief that Skagway should own its waterfront and work towards remediation of contamination in the Ore Terminal Basin prior to the end of the 1968 lease, among other positions.
“These guys [the assembly] want to take it to a vote, we’ll take it to a vote,” Carlson said. “I might be wrong, that’s okay, because then the public will have spoken.”
The assembly members spent two hours on Nov. 4 in one of the upper rooms at the Public Safety Facility discussing the future of Skagway’s port and the MOU currently before them.
The retreat began with Borough Manager Scott Hahn leading the assembly members in a thought experiment to get a sense of the future the assembly wants for its port, but the discussion eventually turned in a lease/no lease direction.
Brena came to the retreat with a worksheet he’d created, laying out estimated financial numbers comparing the lease/no lease scenarios. Currently, White Pass collects a $8.51 fee per-passenger, and charges the ships by the linear foot in docking fees.
Assuming the municipality owns and is in control of those docks in 2023, and using the passenger count for the Ore and Broadway docks from 2017 and projected numbers for 2018, Brena estimated those two fees would bring in $4,885,667 worth of revenue in 2023. The expenses, which he estimated at $1,600,000 for 2023, were arrived at by looking at expenses Juneau incurs running its two floating docks, according to Brena.
Also factored into the analysis is a cost of almost $1 million per year, to pay down a hypothetical revenue bond that the municipality would most likely seek to fund the $15 million “Option 3B” Ore Dock expansion.
All totaled, Brena’s estimates project that the municipality could have a net income of $2,287,591 for 2023, where the flat lease payment in 2023 would net the municipality $250,000.
White Pass Executive Director of Human Resources & Strategic Planning Tyler Rose said that the railroad plans to do its own math, and will release an economic forecast as a counter-point to what Brena presented.
Rose said that 2017 is a skewed model in regards to the number of ships tied up at the Broadway and Ore docks, as the Railroad Dock was shut down for a chunk of September due to a rock slide.
“In traditional years, we shut down the Ore and Broadway docks first and use the Railroad Dock until the end, and the reason for that is because with the prevailing winds that come through, you have a better chance of docking when the winds pick up on the shoulder seasons here [at Railroad Dock] than you do over on that side,” Rose said.
At the retreat, Assembly Member Orion Hanson said that the trade off in the current negotiations is between giving up some level of control at the waterfront for a degree of security. Of “paramount importance” is stabilizing and ensuring the economy of Skagway as the borough moves forward, according to Hanson, and he said he thinks there is a lot of worry in town about the municipality’s economic stability.
“We have very little risk in this,” Hanson said about the MOU. “And it may not be the great reward that Mr. Brena has presented here, but in terms of the money out of our pockets and out of our coffers, it’s very little, and we have a great deal of stabilization in our economy going forward with the proposal we have here.”
The municipality should have a fiscally wise path forward that doesn’t jeopardize Skagway’s resources and revenue, Hanson said.
Assembly Member Steve Burnham Jr. said he agreed with Hanson, and that he thinks stabilization is what the community is after.
Near the end of the retreat, a plan of action was set out: Hold a special session on Nov. 8, with the goal of having the MOU ready to go to White Pass by the end of that meeting.
Carlson asked Hanson and Assembly Member Tim Cochran – the two members of the municipality’s negotiating team – to have Municipal Attorney Bob Blasco on the phone when they deliver the MOU to White Pass.
[EDITOR’S NOTE: The Nov. 8 special session occurred after press time. The Nov. 22 issue of The Skagway News will go into the details and aftermath of the Nov. 8 meeting.]