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Illustration by Palma Berger
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Welcome to the April 23, 2004 online edition of the Klondike Sun, reproducing a selection of the articles and photographs from the April 20 newsstand edition. The Sun has only recently been updated on the web after a hiatus since the January 16/04 issue. Current issues are now available on the site, and the archives from 1997-2003 are linked to this site. We have had many inquiries about the absence of current issues here, and we note that the site has had more than 2,000 hits since the final new posting last January. This issue is one of the most significant of 2004 in that it records the events of the week that Dawson’s city council was removed by the territorial government. There was a lot of press coverage other than our own, and we reproduced some of that. There were also a lot of letters and we used those. ‘ While there were some complaints about the tone and contents of this issue, it is worth noting that that it sold out completely in less than a week. All that remains of that print run are our file copies. As we move through the back and forth process of getting all of 2004 onto our new website, changes keep taking place in the site. It is September 17, 2004 as I write these introductory notes. Our webmaster, John Steins, has now added a search engine to the site which will allow you to compile a collection of articles on any one subject including all the issues from 1996 to 2003. | ||||
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Trustee Appointed To Address Financial Situation In Dawson City YTG Press Release WHITEHORSE (April 13, 2004) The Yukon government is moving to appoint a former deputy minister as trustee for the cash-strapped community of Dawson City. In announcing the appointment of former Deputy Minister of the Executive Council Office Raymond Hayes this morning, Community Services Minister Glenn Hart said it has become abundantly clear in recent days that the financial crisis facing Dawson City is even more precarious than previously believed. “The Yukon government has taken this step to protect the taxpayers of Dawson City as well as the Yukon as a whole,” Hart said. “According to recent draft financial statements provided by BDO Dunwoody, Dawson City is now facing more than $1.14 million in a cash shortfall compared with the earlier predicted shortfall of about $850,000. In addition, city lawyers have advised mayor and council to forward more than $970,000 to be held in trust pending completion of the recreation centre arbitration process. “Dawson also faces more than $4 million in long-term debt and significant future expenditures associated with a sewage treatment facility, as well as other potential payouts from litigation associated with the recreation centre project,” Hart added. The government-appointed trustee is expected to begin work immediately. He takes over from mayor and council and Andre Carrel, the British Columbia-based supervisor that has been working in recent months to stabilize the community’s financial affairs. SUMMARY DAWSON’S CASH SHORT-FALL............$1,140,000 DAWSON’S LONG-TERM DEBT.............$4,468,361 FIRST ARBITRATION CONTINGENCY ....$970,000 YUKON’S INVESTMENT TO DATE IN DAWSON RECREATION CENTRE AND POOL........$5,600,000 SEWAGE TREATMENT TO DATE...........$4,800,000 | |||||||||||||||||||
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‘It’s a bloody takeover,’ NDP says By Jason Small Whitehorse Star, April 13, 2004 Glenn Hart fired Dawson City’s mayor and council today. During a press conference this morning, the Community Services minister dropped the axe on the council elected by the people of Dawson City last October. “Effective immediately, we are appointing a trustee,” Hart told reporters in Whitehorse. Hart said the reason for the mass firings of Mayor Glen Everitt and Councillors Wayne Potoroka, Byrun Shandler and Bill Holmes was the fact new documents show the town has plunged too far into a financial black hole. Hart indicated Everitt would officially resign as the mayor, a position he’s held since 1996, this morning. However, in another press conference shortly after Hart’s, now former mayor Everitt was supposed to announce his resignation. But when he caught wind of Hart’s directive to can him, Everitt chose to let Hart do the dirty work. “I have not resigned, I’ve been removed,” said Everitt. “As mayor, they’re throwing me out.” He was upset when he found out Hart was going ahead with a press conference to announce the council’s firing after Everitt told the minister about his plan to resign. As for the financial difficulties which Hart said prompted his decision to act, he referred to a draft audit being done of the town’s finances which showed the town is short much more money than had been expected. The minister indicated this was new information that recently came to his attention. Hart did not release the draft audit. However, the Star obtained a copy of the document, which was drawn up by BDO Dunwoody and is dated Feb. 25, 2004, 1 1/2 months ago. The minister said the document shows the town is short about $400,000, which is more than the $90,000 initially anticipated. However, Everitt said the new shortfall of cash actually comes from a new accounting system instituted by the territorial government. The full accrual system, which the government has already switched to, puts a cash value on assets and spreads out the cost of capital projects. The former mayor said it was never explained to him how the new system works. His council would never have budgeted such a huge deficit as the system was showing, he added. He said most of the deficit was on paper. Everitt said other communities don’t have to switch to this new system only Dawson, for some reason. NDP Leader Todd Hardy believes the debt on assets and land owned by the town caused this deficit position because it is likely more than the decreasing value on these items. He wonders if this will happen to other municipalities, once they switch accounting methods. As for Dawson City, the town is more than $4.3 million in debt, a figure Hart has been spouting since last Dec. 31. He said another reason for the dismissal is the fact the arbitration ruling on the dispute between the town and TSL Contractors Ltd, which built the town’s multiplex, was going to cost the town at least $970,000 and possibly a bit more. However, the government-appointed supervisor, Andre Carrel, determined last January there wouldn’t be a need for the council to be turfed and a trustee be appointed unless the ruling was beyond $1.35 million. Since the ruling isn’t beyond Carrel’s threshold and the debt is not new, Hart was asked what had changed to cause him to dismiss the council. He replied that the draft audit’s numbers were the biggest, new factor. Everitt admits there are serious financial problems in Dawson City. The town’s precarious position has been noted since the former Liberal government appointed the first supervisor, Ken Hodgins, in January 2001. “Our budgets have been scrutinized through a supervisor for three years,” said Everitt. He said there hadn’t been major problems then. Everitt said Hodgins and the Community Services deputy minister, Marc Tremblay, told the town to keep going, and when major problems like the need for a sewage treatment facility had to be dealt with, the government would help out. But under the Yukon Party government, and with Carrel as the supervisor (he was appointed last Oct. 3), the council was forced to find the money on its own, which put it in a worse position. “Everyone in the Yukon knew we didn’t have the money,” said Everitt. Ray Hayes, a former government deputy minister who retired last summer, has been appointed as the trustee for the town. A new town manager, David Skid, has also been appointed since the previous manager, Scott Coulson, quit recently. Hart said the government wants to work with Hayes and Skid to try to repair Dawson City’s problems. Hardy wondered why the council couldn’t have been worked with in the same fashion Hart wants to work with Hayes and Skid. Hart did not answer that question. Instead, he said the government wasn’t able to fix the situation with the council. The minister also made reference to there being “barking back and forth” between council and the government. When asked if that meant the decision to can the council was based on a conflict, Hart said: “It’s not a personality decision at all.” However, Everitt said Carrel has written a report that indicated a personality conflict has been a factor in the town’s troubles. The former mayor said Carrel read parts of that report to him. Part of it indicates the long-standing feud between Everitt and another former mayor, Klondike MLA Peter Jenkins, now the Health and Social Services minister, has kept the town from positively moving forward and kept Carrel from doing his job properly. Everitt, who will continue to live in Dawson City because it’s his hometown, said one part of the problem has been removed himself. He challenged Jenkins to do the same and resign to help the town. “That would be the honourable thing to do,” said Everitt. “I think you would have to take out Webster’s and spell out the definition of honourable (to Jenkins).” Liberal Leader Pat Duncan, who has publicly battled with Jenkins for years, said that like it or not, both men were elected and therefore they should have tried to get along for the good of the people of Dawson City. “You were duly elected to get along,” she said. Hardy said part of Jenkins’ problem is the fact he still doesn’t understand why he can’t be mayor and MLA at the same time. The Municipal Act currently prevents that. “I’ve heard it from his mouth,” said Hardy. The NDP leader believes this is Jenkins’ way of getting “absolute power”. Hart said the government could ensure the day-to-day operations of the municipality would be conducted — the water will run and the garbage will be picked up — but beyond that, he made no promises. Hart said Dawson City will be without an elected council for at least the next year. He will give Hayes that period of time to do his job. Hardy said Hayes may be able to do good work in Dawson. However, both opposition leaders decried Hart’s decision to axe the council and mayor. “It’s a bloody takeover,” said Hardy. “A hostile takeover.” “It’s arrogant, disrespectful,” Duncan said of the action. “It’s unilateral decision- | |||||||||||||||||||||||||||||||||||||||||||
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Klondike democracy becomes a casualty Whitehorse Star Editorial by Jim Butler, April 14/04
Given the ceaseless barrage of miserable financial news and the poisonous relations between two levels of government, something had to be done to rein in the mounting chaos in Dawson City. Only time will tell whether Community Services Minister Glenn Hart’s dramatic firings of Dawson’s ex-mayor and councillors were a stroke of sensible crisis management or politically-motivated overkill. One trusts the minister appreciates the grave ramifications of the extraordinary situation he has created with Tuesday’s announcement. Using his vast territorial powers, Hart has bluntly repudiated the electoral desire expressed by Dawson residents only six months ago when they re-elected then-mayor Glen Everitt and chose a new council. This brand of direct democracy in the Klondike has indeed been circumvented; those votes, cast in good faith, suddenly rendered mute. Hart’s sweeping obliteration of the ex-council is a slap in the face to those well-meaning citizens who let their names stand for what they knew would be a very stressful job. This affair could well prove a disincentive to people around the territory thinking of serving their communities at the municipal level. Members of other councils, meanwhile, must be wondering if they’d suffer the same fate if their community fell into debt to the immense disapproval of the territorial cabinet. Then again, would the government have opted for this move had it involved municipal leaders in Watson Lake, for example, or in Teslin? Meanwhile, confusion reigned in the wake of Tuesday’s trusteeship announcement. While Hart told reporters Dawson is short $400,000, a government news release put the figure at $1.14 million. Everitt made reasonable responses to the fiscal damage done during his watch. He has correctly conceded the town took on too many major projects in too short a time frame. In quick succession, there was the relocation and refurbishment of the firehall, the renovations of the swimming pool to lengthen its season and the building of the recreation centre, which ushered in a protracted arbitration dogfight with the contractor. The ex-mayor agreed to have his pay slashed in half and offered an apology to his community yesterday. With his loss, Dawson has been robbed of an influential voice across Canada. His lobbying, for instance, helped his town secure millions of dollars in federal infrastructure projects last year. His work as president of the Association of Yukon Communities was likewise a valuable contribution. To be sure, the town made major mistakes, but not all the blame can be confined to the last two councils. For the last three years, after all, Dawson has been under the scrutiny of territorial officials and a financial supervisor. According to Everitt, the town was essentially told to keep doing what it had been doing in its budgetary work. At this point, so many current and future dollars are committed that the former council would have had little leeway to traipse down unwise fiscal routes anyway. Again, that raises the question of why a trustee is expected to do better with the same budgets that confronted the ex-mayor and council. Everitt also says it was never explained to him that a new system of accounting the government imposed on the town would make its deficit far greater than council had envisioned. He wonders why other communities have not had to follow the same new accounting practices as swiftly as perplexed Dawson council members were obliged to. His question is a valid one. Though Hart doggedly begged to differ on Tuesday, personality clashes indeed played a pivotal role in the wicked, corrosive brew that Dawson’s local politics have become. Andre Carrel, the supervisor the government appointed last fall, agreed that volatile personality differences between Everitt and Klondike MLA Peter Jenkins were impeding progress on Dawson’s financial troubles. With the qualified, respected and personable Ray Hayes moving in as trustee, the overall environment can’t help but improve. There will always be suspicions that certain elements of the cabinet wanted Everitt gone from day one. Significantly, though his ex-council colleagues have been invited to play advisory roles to Hayes, Everitt has not. Jenkins has denied any background role in the saga. Nonetheless, he has been remarkably silent through all this when one would normally expect an MLA to defend the autonomy and democratic standing of the duly-elected council in his riding’s major population centre. NDP Leader Todd Hardy flatly declared the striking down of Dawson’s municipal leaders constitutes “absolute power” for Jenkins in the town’s affairs. Many Dawson residents agree, and are alarmed and angry as Hart prepares to face them at a public meeting this evening. Others, according to Jenkins, support council’s removal. Again, another schism, another problem to resolve. Hayes, objective and non-partisan, could well succeed in cleaning up a portion of this mess in the next year without painful service reductions or tax increases. To facilitate that, the government will probably have to bite the bullet and bring more special financial relief to Dawson. It’s unlikely the town can ever claw its way out of this hole without this boost. If the helping hand comes, the former council’s supporters will immediately ask why the council couldn’t have managed that infusion itself, albeit under Hayes’ watchful eye. Either way, through all the painful miscalculations, project pratfalls, fingerpointing and stealthy activities, Dawson residents have suffered the most. They didn’t ask nor deserve to have this situation evolve into the fundamental question of whether they would continue to enjoy the same type of publicly-elected local government that most other Yukoners do. Dawsonites didn’t deserve to see their local governance system turned upside down and shovelled out the door like unwanted placer tailings. As Liberal Leader Pat Duncan said Tuesday, they expect their various levels of government to get along. They were sorely let down in this regard. In exchange for losing the council they entrusted their affairs to last October, Klondikers are entitled to remedies that will rebuild their community’s fiscal health and return normalcy to their politics. And that means the timely restoration of a local government whose direction comes not from a government-appointed trustee, but from a group of local citizens duly installed by local citizens. | |||||||||||||||||||||||
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