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-making.'

See letter, p. 7.