Lutak Dock conversations dominated Tuesday’s Haines Borough Assembly meeting. Last week the U.S. Department of Transportation, Maritime Administration delivered a review of the project. It gave the borough two options on how to move the project forward. Both options attempt to rectify the mismanagement of $10 million of federal funds that were spent on the project. Assembly members voted unanimously on one of the choices.
On Friday, Haines Borough Manager Annette Kreitzer and Mayor Tom Morphet met with a representative from MARAD to discuss the federal agency’s official review of the Lutak Dock project.
The project was under review because of a steel purchase. Turnagain Marine Construction, the borough’s contractor, bought nearly $10 million of steel for the project last fall. In the review, MARAD concluded that this purchase was mishandled because it was done without prior authorization from MARAD.
By determining that the steel was an unauthorized purchase, this meant that the borough’s federal grant to reconstruct Lutak Dock, worth $20 million, could be revoked.
The review gave the borough two options to move forward without losing federal funding. Under the first option, the Borough could use the roughly $10 million of steel that was purchased atoward the project. If the Borough decided to do this, MARAD would reduce the federal grant from $20 million to $10.2 million.
Under the second option, the Borough could retain the full $20 million of federal money, but they could not use the steel that was purchased by Turnagain toward the project.
Opponents to the current dock design called it a “mega dock” at Tuesday’s meeting. During public comments, several members of the community said they would like to see the Borough pursue a smaller dock, which would have lower maintenance costs and would be unable to ship ore. But both Kreitzer and Morphet said that, after their Friday discussion with MARAD, they were advised that any pivot from the current design would delay the project and make it ineligible for the $20 of federal funding.
The Haines Borough Assembly voted 6-0 during Tuesday’s meeting for the second option presented by MARAD. This is the option that would keep the entire $20 million of federal grant money. With this vote, Kreitzer is expected to advise Turnagain to sell the steel that was purchased without authorization. If the project moves forward under the current design, Turnagain would have to re-purchase the same amount of steel.
Several assembly members asked what this would mean for the cost of the project to the Borough, if the price of steel rises. Kreitzer said during the meeting that she needs to speak with Turnagain before answering that question.
But while the vote to not hold onto the unauthorized steel was unanimous, the fate of the dock is still undecided, for multiple reasons. The first is a September 30th deadline, from MARAD. All permitting and assessments for the dock must be completed by then or MARAD will withdraw the grant funding.
The dock has yet to undergo an environmental assessment, or EA. The borough is expected to submit an EA to the agency early next week.
If the feds review the EA and determine that the design will not have a significant impact on the environment, it is likely that the current dock design will meet the September deadline and the project can move forward. But if the current dock design is found to have a significant environmental impact, then the project will have to undergo an Environmental Impact Statement, or EIS. This is a more involved process, which can take 1-2 years to complete. If this is determined, then it is likely that the project will not make deadline and federal funding will be pulled.
Part of an EA requires a comparison. The proposed dock design must be compared to other possible designs. Environmental consultant for Turnagain Robin Reich attended the meeting. She said that EA draft that will be submitted by Borough next week will include a comparison of three options. The current design under contract by Turnagain will be compared to no action, and it will also be compared to a smaller dock design, a dock design that she said was similar to a dock design proposed by opponents of the current design.
Assembly member Natalie Dawson, who has been an opponent of the current design, expressed frustration that assembly members were unable to see the EA draft. Dawson said she wanted to determine if the smaller scale comparison was truly similar to the dock design that opponents of the dock have suggested.
Also, as part of the National Historic Preservation Act, a consultation is conducted between the tribes and the federal government. While there has been no official statement from the tribes, Mayor Tom Morphet said that Chilkat Indian Village does not support the current, larger dock design. And he said that representatives from CIA have abstained from showing support for or against the current design.
CORRECTION: An earlier version of this story stated that “Another permit that still needs to be required for the dock is the Sacred Sites and Traditional Use permit.“ This version of the story now has been corrected and reads, “Also, as part of the National Historic Preservation Act, a consultation is conducted between the tribes and the federal government.” The earlier version also mistakenly stated that “ Kreitzer told KHNS that Jason Davis of Turnagain had agreed to sell the steel and not pursue a lawsuit against the Borough if they chose this option.” Upon review of the interview tape, Kreitzer did not make this explicit statement and the current version has been corrected to delete this sentence.
