Tidelands appraisal  reviewed

The borough assembly Feb. 7 declined to accept either of two appraisals for determining annual lease payments by the White Pass & Yukon Route Railroad for the municipally owned waterfront property. The assembly voted 3-2 to reject the higher of the two appraisals and then postponed a vote on the other valuation, pending further discussions.

Adopting the lower appraisal of the waterfront property, at $2.2 million, would have set the railroad’s annual payment to the borough at $127,000. That valuation was from the borough’s long-time contract appraiser Horan and Co., of Sitka. A second-opinion appraisal ordered by the borough from Integra, a nationwide appraisal firm, set the property value at $14.7 million, with the lease payment jumping to $882,000 a year.

“It’s way past time to make a decision on, which way to go about this,” Assemblymember Steve Burnham said.

But with the mayor’s seat vacant and Vice Mayor Tim Cochran on vacation, the assembly could not muster the four votes required to accept either appraisal among the five members in attendance Feb. 7.

Assemblymember Dave Brena had moved for the assembly to adopt the Integra appraisal. After Horan came back with the same numbers as its previous appraisal, the assembly sought the new valuation from Integra, Brena explained. “(Integra) said that the appraisal from Horan was not credible and not acceptable,” Brena said.

The difference in the appraisals is because Integra valued the improved property compared to comparable docks, while Horan appraised the land as uplands, unchanged from the original 1968 lease.

The annual rental rate for the lease is based on six percent of the appraised market value of the property.

“(The assembly) is here representing the people of Skagway. We’re not here to give people a friends and family rate,” Brena said, speaking in support of adopting the Integra appraisal.

However, Assemblymember Orion Hanson said adopting the Integra appraisal could cause litigation. And though he agreed that $127,000 a year is inadequate for rent, he said it could be used as a negotiating point for the municipality with White Pass.

Burnham said that while he believes the Integra appraisal is correct, it may not be the right one for the people of Skagway, as it could have long-reaching impact. “Without a doubt, we’ll be whirlwinded into court and the decision could take years,” Burnham said.

“Probably neither appraisal is right to approve,” Burnham said.

The Integra appraisal failed to win approval, with Assemblymembers Burnham and Brena voting in favor, and Assemblymembers Hanson, Burnham and Dan Henry against.

Brena recommended ordering a third appraisal or an appraisal review.

Decision on changing fire chief to paid position

The assembly has postponed a decision on an ordinance to switch the fire chief from a volunteer position to a paid job.

The ordinance was on the Feb. 7 assembly agenda for second reading when Assemblymember Dan Henry proposed moving it to a later meeting so that the public safety committee could further discuss the issue.

“There is a collective agreement that this is the way the community is going to go to address a very strained emergency services department,” Henry said.

“The hope was to try to get this done before the beginning of the (summer) season,” Henry said.

Henry moved to delay the ordinance until the March 7 assembly meeting so that the public safety committee could further consider the issue, while still allow for hiring a fire chief before the start of the summer season.

Assemblymember Dave Brena said some are concerned that Skagway may need to have paid responders as well as a paid fire chief, due to the heavy influx of residents, workers and visitors in the summer.

“We could postpone this until there’s a meeting between the chief, the city manager and public safety is scheduled to determine a comprehensive solution,” Brena said.

Brena offered an amendment to delay a vote on the ordinance until after a meeting between the police chief, fire chief, city manager and public safety committee. His motion passed 4-1.

Borough funded short-term loans

The assembly has rejected introduction of an ordinance intended to establish a short-term municipal loan program for laid-off workers. In particular, the intent was to help federal employees furloughed in a government shutdown.

Assemblymember Dave Brena had introduced the concept of a short-term loan program funded by the municipality for displaced workers. The proposed ordinance would have covered all full-time workers in Skagway laid off without benefits. The loan amount would be limited to three times the worker’s monthly income and would be paid back in installments over a year after the worker was employed again.

“Since I proposed this, I’ve had a number of federal employees thank the assembly,” Brena said.

Assemblymember Orion Hanson recounted his experience with getting short-term loans paid back at the Eagles. “I don’t think we, as a city, want to be in the loan collection business,” Hanson said.

Hanson said he felt compassion for those who were furloughed in the five-week federal government shutdown, but said there would be issues with the municipality giving out loans without collateral. Additionally, he said the Elks and the Eagles both give out loans to those in need.

Assemblymember Dan Henry said the ordinance proposed seemed more like a draw on future wages than a loan, and the ordinance didn’t have anything in place to retrieve money that wasn’t paid.

The motion to introduce the ordinance for public hearings and consideration failed to pass with three in favor and two opposed. It takes four assembly members to approve an action.


Construction dumping rate increase

The rate for dumping commercial construction debris at the borough incinerator will add a $68 fee per cubic yard, under a change approved unanimously by the assembly Feb. 7

The rate increase applies only to construction-based trash; no other rates will change.

The municipality had determined that the old rate did not cover the costs needed out of shipping out the debris.

Assemblymember Orion Hanson, who works as a contractor, said all the debris hasd to be transported to the Haines landfill. “(Skagway) is kind of out flat ground to use,” Hanson said.

The existing rate structure is insufficient and forces the municipality to subsidize the service, Hanson said. “These rates should have been raised decades ago.” 

Hanson mentioned that there were contractors who took garbage from Haines to Skagway because the costs are so low.

Priority Improvement and CPV Funding

The assembly voted unanimously Feb. 7 to set the priority list for capital improvement projects and request cruise ship passenger tax funds for the projects. 

The three priority projects are an extension of utilities on the Klondike Highway, upgrades to the incinerator and improvements to the borough’s wastewater treatment plant. 

Assemblymember Orion Hanson said the incinerator door is in severe need of repair, and could be a problem during the heavy use of the summer season.

The wastewater treatment plant upgrade would be primarily focused on increasing its capacity to handle the heavier volume during the summer.

Dock and port improvements were listed on the resolution for cruise ship tax funding, but not on the borough’s general priority list.

Sewer Jet and Vacuum for water department

The assembly unanimously approved additional funds to buy a jet/vac unit for the borough water department to better clean out and maintain water and sewer lines.

“The increased costs here are due primarily to increased freight charges, above what we budgeted,” Assemblymember Orion Hanson said.