Dawson bailout doesn’t cover the bill

Premier Dennis Fentie announced a $3.43-million bailout package for Dawson City on Friday. The package is fine, but it does little to solve the…

Premier Dennis Fentie announced a $3.43-million bailout package for Dawson City on Friday.

The package is fine, but it does little to solve the town’s problems, said Klondike MLA and former deputy premier Peter Jenkins.

“The devil’s in the details,” he said, noting the town’s forensic audit still has to be completed.

“The government is obligated to collect misspent taxpayer money,” he said.

Nevertheless, the government “doesn’t appear to want to do anything” about the forensic audit, said Jenkins.

As well, the recreation complex hasn’t been fixed and the sewage treatment facility remains outstanding.

Finally, the $3.45-million bailout package is exactly what the former town administrator suggested two years ago.

Since that time, the Yukon government has spent about $3.9-million running the town.

There isn’t much to show for that investment, said Jenkins, noting more than $400,000 has gone to legal fees.

Toss in the $3.4 million announced Friday and another $1 million for capital, and more than $10 million has been spent on Dawson in the last two years.

Yet the underlying problems remain, he noted.

“Everything else must be addressed,” he said.

Friday’s deal writes off $3.43 million of the town’s debt, said Fentie.

The town’s remaining $1.5 million in debt has been consolidated as a loan with fixed interest at four per cent, to be paid over 25 years with single annual payments.

“Consolidating the remaining debt will reduce the community’s annual payments from $485,600 to $94,470 and allow the new city council to manage the town’s cash flow with greater flexibility,” said a government release.

“We felt as a government it was critical that we presented this fiscal package to the citizens of Dawson and the advisery council before we went public with it, and we’ve done that,” said Fentie on Friday.

“Past governments have made decisions in regards to issues in Dawson, especially around capital projects and other matters that have ensured that Dawson City would incur debt.

“We felt it unfair to leave that debt burden with the city of Dawson.”

The government also agreed to provide $1 million in capital funding to “address the immediate needs of the community.”

“The targets for this investment will be developed in conjunction with the new mayor and council, so we can get on with addressing some of these capital needs,” said Fentie.

But the bailout package does not include money for Dawson’s decrepit sports arena or non-existent sewage system.

“The rec plex is a bit of a gong show and the troubles and costs that it’s incurred should not rest with Dawson,” said Fentie.

“We have to fix the building. You shouldn’t even walk into it. There are serious problems with the roof, its structure. There are major challenges with trying to put ice in that building.

“We’re going to take care of that issue. We’ll come up with options with the new mayor and council about what we’ll do with that building, which could include the government leasing that building, but we’re not limited to that option.”

The government would be “challenged” to continue to pour money into the arena, he added.

“We think we have to look at other options.

“Of course the sewage treatment issue is huge, and we want to make sure that we don’t encumber Dawson long into its future with unnecessary (operations and maintenance) costs by putting in the wrong sewage treatment system.”

Those options could include building aerated lagoons, he said.

The territorial government will likely still pay for both projects to be resolved.

“We’re not going to put that in Dawson City’s fiscal framework,” said Fentie.

“If it’s not in Dawson’s fiscal framework, the territory is going to have to address them.

“But I can’t give you a number because we don’t know what the options are.”

Dawson has been under the territorial government’s wing, without a mayor and council since April 2004, when the Community Services department fired town officials in light of misspending.

The town’s debt was later revealed at more than $4 million.

“The decision to appoint a trustee and remove the mayor and council was critical to this matter, because that put a stop to the direction the finances of Dawson were going,” said Fentie.

“Then it required a forensic audit to get an idea of what has transpired here.

“We also needed to make sure we had a financial statement that was unqualified and that an accounting firm would actually sign their name to.

“We just received that a few short months ago.

“Then we had to work to ensure that a new mayor and council will have the tools they require.”

Fentie made the announcement from the town offices in Dawson.

He also planned to attend the Tourism Industry Association conference in the town.

“If I was a citizen of Dawson I would have concerns no matter what a government provided, in terms of a fiscal package, considering what has happened in the past.

“But I think it is clear now that we have come to a point where we are going to move on.

“The reaction is positive. I think that we did hit a number of the targets that we had to, to ensure that Dawson felt that their situation was being addressed in a manner that meets their needs.”

Municipal elections must be held in Dawson no later than June 15, according to the Dawson Municipal Governance Restoration Act that was passed in April.

“The act we passed this sitting for Dawson City ensures that a new mayor and council elected on or before June 15 do not have to go back to the polls in October, when all other municipalities must,” said Fentie.

Jenkins has not ruled out making a run at the mayor’s job.

“All options are open,” he said.

The Dawson Restoration Act will “sunset” once the $3.43 million has been paid out and Dawson’s remaining debt has reduced to within the $1-million limit acceptable under the Yukon Municipal Act.