Rebuilding the Lutak dock is one of the biggest infrastructure projects the borough is currently tackling. Community members have taken issue with the chosen design, called an encapsulation. It involves surrounding the current dock with a 600’ metal wall, and filling the gaps. Critics have said the large design this could facilitate a controversial mine in the Chilkat watershed. Others have balked at the potential maintenance costs, and the limited life span of metal in salt water. The issue became a focal point of the last local election, where opponents of the design won all the seats. Yet, the borough still has a contract with Turnagain Marine Construction for building an encapsulated dock. 

But in the last year, some issues have arisen. Turnagain has purchased materials in violation of the terms of the federal grant that funds the project. And the company has sent invoices that the borough find questionable. 

The contract between the borough and Turnagain lays out a process for conflict resolution. As a first step, senior representatives for both parties met earlier this month. Jason Davis, the president of Turnagain, met with former borough manager Annetter Kreitzer and assembly member Natalie Dawson. Both parties brought their attorneys. 

Dawson sums up the discussion: “At the meeting, he said that he felt like the meeting of the senior representatives had failed, and that it needed to move to mediation.” 

Mediation is the second step in the dispute resolution process, the next step would be going to court.

Borough attorney Taylor Mc Mahon spoke at the latest assembly meeting about the company’s latest communications: “They primarily relate to payment of two invoices that are outstanding and under discussion. And then a request for commitment on the part of the Haines borough to the encapsulation design.”

The assembly learned about the invoices in April. The invoices totaled more than $3M, and were billed as “design and Permitting.”

Dawson says under the terms of the contract, design and permitting was only about $300K, that the borough already paid: “So now, Turnagain is trying to get ten times that amount for design and permitting. It’s not the Haines borough’s responsibility to pay for cost that were maybe not budgeted.”

Dawson says an attorney advised the borough to hold off on paying those invoices until Turnagain provides more information: “So what we are asking for is paperwork that shows why they are billing us $3.2M, and then if they give us that paperwork, we can have our lawyers go through it, and the assembly can look at it, and we can decide whether we are going to pay all of it, or a portion of it, of talk to the contractor about why certain costs are reported, and start those negotiations.”

Dawson says Turnagain has not provided that paperwork yet, and that the information will be required to enter into mediation.

The other thing Turnagain has requested is a commitment from the borough to the encapsulation design. This points to a sort of chicken and egg problem. Dawson says the company has walked back on its guaranteed maximum price for the project. She says the company should give the borough its new estimate of what the project would cost before committing to it. But in its letter, the company says it wants commitment from the borough before it produces the new estimate.

Dawson says the wording of maximum guaranteed price is misleading. She says the contract included multiple caveats: “Actually you can go over cost, most definitely, and that becomes a negotiation between the contractor and the borough. But in the meantime, we’ve also told the federal agency that we would bond for those overages. So there is I think a misconception that we’ve got the money, it’s all covered, it’s free money, we can just go forward, there is not going to be any cost to the taxpayers, and the reality is there likely will be costs, because this is a huge project.”

The company also refers to a purchase of materials worth $10M, that it made last year, without approval from the federal agency that is funding the project. Turnagain is asking the borough to reimburse that amount. This came as a surprise to assembly members, who thought the company had resolved the issue by reallocating the materials to a different project. 

McMahon says even she isn’t sure where things stand: “I would say that that issue is in flux. When I initially came onto this project, I also heard that it was a resolved issue,  I’ve subsequently heard that Turnagain Marine is still in possession of that pipe pile and wants to be reimbursed. I don’t currently perceive it to be the primary dispute, but it’s definitely something that’s going to be discussed at a mediation.”

Meanwhile, Turnagain is busy working on the Environmental Assessment for the project. Dawson says even if the borough decides to change the design of the dock, this wouldn’t necessarily go to waste. She says the document assesses the impact of multiple designs: “And so, hypothetically, when our work has been done on each design, we could recycle some of that material when we go forward with any of  the designs.” 

Dawson says there could be local advantages to a different design: “Because if we are doing steel encapsulation, that is going to require a lot of outside expertise, if we do a rubble mound, maybe we can have more that is just based here in the community with materials sources locally. These are all questions we could ask, but the assembly hasn’t made the decision to pivot in a different direction.” 

Dawson says she sees a path forward for the project, especially in light of a recent extension for the deadline for the federal grant. 

The assembly voted 4 to 1 to direct the borough attorney to enter into mediation with Turnagain. Turnagain president Jason Davis did not return calls requesting comments for this story.