The borough is preparing to go public in a search for offers on Port Chilkoot Dock management, pending another assembly vote next month.
Even just a few months ago the concept of outside management at the borough’s cruise ship facility wasn’t on the radar. The borough has long owned the facility, maintained it, and in recent years has collected a head tax there from docking cruise ships.
In late April, an international port management company, Global Ports Holding, approached the borough with an unsolicited offer. In that offer, the company proposed taking over much of the operations and costs at the dock, as well as its main revenue streams. As part of the deal, the company said they would significantly increase the number of cruise passengers landing in town.
Following news of the Global Ports offer, two other companies, Huna Totem Corporation and Survey Point Holdings, said they would be interested in competing with Global Ports for the right to manage the facility.
Borough staff have been in contact with Global Ports for weeks now, after the assembly two months ago asked the company to put forward an official offer with more concrete details for the body to consider.
In some ways, it seems that process has stalled: borough manager Alekka Fullerton said Tuesday the company asked the borough to sign a non-disclosure agreement regarding the proposal, hoping to keep confidential what they said was proprietary business information that would be in a detailed offer. The municipal government, however, is subject to broad public-records laws which allow the government to keep information confidential under only a narrow set of exceptions to the law.
A solution proposed by the borough’s attorney, Fullerton said, was to put out a general call for proposals, open to any company interested in managing the facility. Fullerton had said she was considering the idea, referred to as an RFP, or request for proposals, as early as mid-June.
The assembly Tuesday was generally supportive of the idea and directed borough staff to draft documents for an RFP. That draft will be considered for assembly approval at its next meeting.
Under current plans, the RFP would be somewhat open ended, and wouldn’t bind the borough to choosing the lowest bidder. As Fullerton described it at the meeting, the borough would select an option from the range of bidders. Rather than accept the submitted offer outright, the borough would then begin negotiations with that company.
“It’s a qualitative relationship we’re talking about entering,” she said. “Certainly there’s an income component in terms of how much the lease would be, but that’s just one of several components should we choose to go forward.”
There are still outstanding questions about how to judge the quality of a deal in the first place. For instance, Global Ports has been offering an increase in passenger count, but it’s not clear whether that is seen as a positive or a negative by the community, or even the assembly itself.
“I couldn’t put out a credible RFP today because two parties would want to bid on the same deliverable, and we don’t have a deliverable right now,” said assembly member Eben Sargent.
“If we let these guys in… they’ll overrun us and do what they want,” assembly member Craig Loomis said. “The community should tell them what we want rather than them telling us what they want to do.”
Global Ports may be frustrated with how the borough is planning to open negotiations with other companies.
In a letter sent to the assembly prior to the meeting, the company said it would be amenable to participating in an RFP process, but asked for a sort of special treatment.
“While we appreciate that the borough wishes to test the market, we respectfully submit that it would be inequitable if the investment made by (Global Ports) in creating this opportunity were simply used to establish a competitive process without any recognition of our contribution,” the letter said.
The company proposed it be given best and final offer status, allowing it to match any “best” offer submitted by a different company.
The assembly did seem receptive to the company’s concerns about proprietary information, and it believes an RFP process would keep information confidential until a set date when all the proposals would be unsealed.
The assembly did not, however, vote into place or substantively discuss any measures to give Global Ports best and final offer status.
In a brief comment on the issue, assembly member Kevin Forster said “it feels like offering a best and final offer to one entity will open us up to all sorts of legal challenges.”
Chilkoot Moratorium
The borough will not grant any new commercial tour permits next season in the Chilkoot Lake area, including the bridge over the Chilkoot River. The assembly voted nearly unanimously Tuesday to put into place a one-year moratorium on new permits, a measure that had been recommended by the Chilkoot Corridor Working Group. The working group, comprising representatives from user groups and government agencies, has been tasked with addressing crowding and wildlife interaction concerns at the popular tourism destination.
Assembly member Cheryl Stickler said she supported the measure specifically because of a new state regulation banning tour operators from driving large buses into the Chilkoot Lake State Recreation Site. Critics of the regulation say it has resulted in more total vehicles and more congestion.
“Taking a year to see how this falls out, to get our feet under us and figure out how to proceed, is a wise decision,” Stickler said.
Assembly member Mark Smith was the only vote against the moratorium.
Dock contingency number stays put
Assembly member Eben Sargent Tuesday proposed increasing the amount of funds set aside as contingency for Lutak Dock construction.
The contingency number determines how much is set aside to be used in the event of cost overruns — funds not dedicated toward planned costs and construction. The borough has $26 million in total funding for the project, some of which has already been spent.
There’s been discussion for months over how large that contingency fund should be. In initial talks with the borough in November 2025, Moffatt & Nichol’s Shaun McFarlane, a borough advisor on the project, said he expected the contingency fund to be in the ballpark of 15-25% of total budget. In a memo from the same time, borough harbormaster Henry Pollan recommended a 20% contingency.
By May, Moffatt & Nichol had revised their advised contingency number to 10%. Borough staff in turn, based off the Moffatt & Nichol number, recommended a 12% contingency because it resulted in a “round number” of $22 million in available funds, Fullerton wrote at the time. Fullerton brought that figure to the assembly on May 12, asking for assembly approval, but the assembly did not vote on the issue at the meeting.
Sargent’s argument Tuesday was that circumstances had changed since that decision, requiring a reevaluation of the decision itself.
Specifically, he said, the recommendations were “made by Moffatt & Nichol with erroneous information.”
“At the time, (Moffatt & Nichol) communicated clearly they believed permitting was completely in place, which proved to be false. It was news to them this summer that they did have to communicate these amounts like pile driving to MARAD,” Sargent said.
Delays in the timeline from unforeseen permitting, Sargent argued, could result in increased costs, specifically because construction work won’t be able to go forward until permitting is completed.
Sargent, however, faced strong pushback from some assembly members and the borough manager who said a larger contingency — Sargent proposed 20% — would “hamstring” the project. “I’m worried that we need every cent for this project,” Fullerton said.
Smith said Sargent’s proposal was aligned with “dark forces in the community that don’t want to see the dock done at all.”
Assembly member Gabe Thomas took a slightly different tack, saying the proper time to limit construction costs was in awarding a bid to a contractor down the line, not increasing contingency funds.
Assembly member Kevin Forster spoke in favor of the larger contingency, calling it a way to ensure taxpayers wouldn’t be on the hook for municipal bonds to fund cost overruns.
The final vote on increasing contingency funds to 20% was tied, with Loomis and Forster siding with Sargent.
That put it to mayor Tom Morphet to break the tie. Morphet responded to the deadlock with a “hm” and a long pause.
The rather momentous decision being entirely in Morphet’s hands wasn’t something he could’ve prepared for, as Sargent’s motion hadn’t been on the agenda prior to the meeting. It was proposed as direction to the manager during the manager’s report. Morphet, when pressed by Sargent as he thought about the decision, said he “wasn’t expecting to vote on this.”
After some time deliberating, the mayor voted no, keeping the contingency at the current 12% figure.
Sales tax on alcohol advances
Voters may decide on a new tax this October: a 2% sales tax on alcohol. The assembly narrowly introduced the measure Tuesday, with the condition it go to the voters for approval.
Putting the tax into place is a somewhat complicated process. With the measure now introduced for consideration, the assembly will hold at least two public hearings on the new tax. Following the public hearings, the assembly will take another vote, on whether the measure goes on the ballot for the municipal election in October.
If that passes, voters will then decide at the polls whether to approve the new tax.
If approved in October, revenue from the tax would go into the areawide general fund, the borough’s broadest funding source, paying for services like the school.
Assembly members Thomas, Smith, and Stickler voted against introduction — the first step in kicking off the entire approval process. The tied vote once more gave mayor Tom Morphet final say. This time, Morphet voted in favor of the motion, saying the tax “deserves a public airing.”
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