Haines Borough elected officials and a development consultant offered opposing views this week about what has caused a series of snafus with the Lutak Dock renovation project, including a recent invoice for more than $2 million that caught officials off guard.
Don Porter, an engineer with R&M Consultants and an advisor on the project, said at a meeting last night that a key impediment has been the Haines Borough Assembly’s hesitation about the current plan to encapsulate the aging freight and fuel dock. He explained that the contractor overseeing the project, Turnagain Marine Construction, had been working to meet a tight timeline to renovate the dock but now is operating with uncertainty because the assembly has shown interest in other designs.
Several assembly members and Mayor Tom Morphet pushed back against Porter’s assessment, noting that the assembly has not formally opposed the encapsulation plan – although Morphet said that last fall he asked Turnagain’s president, Jason Davis, if the borough could halt the project to catch people up to speed.
Officials raised a number of concerns Tuesday about Turnagain’s actions, such as why the company did millions of dollars of work that wasn’t pre-authorized by the federal government and might not be reimbursable with federal funds that the borough plans to use to pay for the project. The surprise bill from Turnagain arrived just months after the company purchased $10 million of steel that was not federally authorized.
Robynne Thaxton, a lawyer working with the borough on the project, wrote in a December memo to officials that Turnagain has a responsibility under its agreement to comply with requirements set by the Maritime Administration of the U.S. Department of Transportation, or MARAD. That’s the agency overseeing the $20 million grant that the borough got to rebuild the dock.
Thaxton wrote, “Turnagain was fully aware that it could not invoice the Borough for the cost until the MARAD grant was approved to obtain authorization.” Thaxton declined to comment for this story, citing a policy that she doesn’t speak to reporters without her clients present.
According to Kreitzer, the latest expenses also were not authorized by MARAD. But she said last night that federal grant administrators indicated they may change their guidelines in a way that could allow the borough to draw from those funds to foot the bill.
Federal requirements aside, Porter said the reason the invoice landed in Kreitzer’s inbox is straightforward.
“The simple answer is that the reason you’re getting an invoice is that you entered into a contract with the contractor.”
But Porter deferred specific questions about the borough’s contract with Turnagain to legal experts. In an April 8 letter to Kreitzer, Turnagain president Davis asserted that the borough owes the company regardless of whether MARAD will cover the expenses.
Turnagain’s invoice includes more than $1.2 million for design, about $500,000 for “project management,” and roughly $300,000 for permitting, among other costs. The contractor initially sent an invoice to Kreitzer on April 8 for $2.4 million but revised it to $2.8 million after Porter recommended they charge for design and permitting and not preliminary construction.
Assembly member Natalie Dawson said she was concerned about discrepancies between the two invoices and suggested that the borough hire an independent contract attorney to help sort things out.
Assembly member Debra Schnabel said that she doesn’t think the assembly is to blame. She said she feels the borough has been “failed” by its paid consultants.
“I kind of resent that the assembly and the community itself is being charged with having messed up its own project.”
Beyond the invoice and questions about liability, there’s also uncertainty about how much the project will end up costing.
In his April 8 letter, Davis said the original guaranteed maximum price of $25 million is no longer valid. On Wednesday, assembly members asked Porter for his thoughts on what they might expect for an updated cost.
He said there’s no way for the contractor to know without having confidence in a timeline.