Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966


Borough, tribe seal deal to swap utility, road work


May 20, 2010

The Haines Borough will pay for water and sewer mains in the Chilkoot Indian Association’s new subdivision in exchange for money to maintain local roads under a deal the assembly approved recently.

The assembly voted unanimously to approve a $1.2 million grant to CIA.Work on the water and sewer mains for the Chilkoot Estates subdivision was set to get under way immediately, tribal officials said.

In return, CIA will pay the borough $1.2 million plus 14 percent interest for road maintenance over several years. "You make $168,000 just for approving this," said CIA tribal administrator Jim Carnahan.

Borough officials said this week the tribe’s road money could be used to pay for downtown paving projects passed over by the Alaska Legislature this year, but said that would require the assembly to overturn a decision it made last year to use the tribal money to reimburse the borough for road maintenance.

Assembly members last year said they were reluctant to spend the borough’s own money on road paving, wanting to use legislative money on such large projects, instead.

Borough road maintenance included in the budget each year includes about $300,000 for snow plowing and sanding, painting lines, sweeping, brushing, and other tasks.

The deal to swap sewer and road projects is nearly a year in the making.

The tribe last year received federal highway funds it intended to use for the water and sewer work in the subdivision, but federal highway officials later said the money could be used only for roads. The borough assembly last October approved a memorandum of understanding with the CIA to swap funds after lawyers approved the deal.

The borough will pay the CIA out of the townsite area general fund, the same pot of money that pays each year for borough road maintenance.

The tribe’s money will essentially reimburse the borough each year for work it already does, said chief fiscal officer Jila Stuart.

"It’s pretty broad," said borough facilities manager Brad Maynard, who said road maintenance comprised most of the $540,000 public works budget for six months out the year.

Under federal requirements for the tribe’s highway grants, only 25 percent of annual appropriations can be used for maintenance, meaning the CIA will make payments to the borough over several years until the money is repaid.

The tribe is slated to turn over about $300,000 for road maintenance this year.

Chief fiscal officer Jila Stuart said if the borough assembly decided to use CIA’s highway money for paving instead, repayment of the entire amount could be made quickly, as construction projects don’t carry the same restrictions as money used for maintenance.

Federal highway officials told the borough deals such as the one between it and CIA were fairly common.