Seven years ago, a fire displaced the Kuskokwim Learning Academy, a boarding high school in Bethel. Without classrooms or housing, students moved into the dorms at Yuut Elitnaurviat, an adult learning center, where they soon resumed classes on the second floor of the campus’ administration building.
“We had over 100 high school students up there and we realized that we were crammed for space,” said Mike Hoffman, the current executive director at Yuut. He said with the limited space, the school could only house about 45 students.
Working with the Lower Kuskokwim School District, Yuut decided to move ahead with plans to expand the administration building and add another dorm to the campus. Designs were finalized. Funding was tricky, but they were able to square that away too with a bank loan, said Hoffman.
“But then COVID came a couple years ago,” he said. “And we heard and knew that prices were going to escalate. We didn’t expect them to escalate by 20% — they did.”
Prices never really came back down. Hoffman said finally, a few months ago, Yuut and the school district decided — with the pressing need for more classroom and living space — they would have to bite the bullet and absorb the extra costs.
But then, suppliers facing huge backlogs told Hoffman they wouldn’t be able to get materials to Bethel in time for the short summer building season.
These delays and price surges are indications that COVID-19 is still playing a huge role in the global economy. Every step of the supply chain — from manufacturing to shipping to distribution — has lost any sense of a normal rhythm, said Darren Prokop, a professor of logistics at the University of Alaska Anchorage.
“If any one of those things gets jammed up due to COVID, due to a blockage at a port of entry, something like that, then you end up with bottlenecks,” Prokop said. “So you end up with too much stuff in one place and not enough in another.”
Prokop said the supply chain holdups, plus now inflation, inevitably lead to higher prices.
Supply chain difficulties add an additional layer to the already complex challenge of building in rural Alaska. Barge season in Western Alaska only runs May through October. It’s a narrow window to bring in the large shipments of lumber and other building materials that construction projects require.
That tight timeframe compounds the problem for builders trying to navigate supply blockages and the resulting price hikes.
CEO of the Alaska Village Electrical Cooperative Bill Stamm has one word for it: “grueling.”
The utility maintains power generators for 58 rural communities stretching from Old Harbor to Kivalina. Maintaining dozens of diesel power plants, wind turbines and solar arrays, plus 500 miles of distribution line, is a complicated, year-round effort — in a good year.
During the pandemic, prices and lead times for big items like power poles and cables have effectively doubled. Stamm said the delivery estimate he was quoted on a new transformer is 40 weeks.
“That’s most of the year,” he said. “We like to have a backup plan for just about everything, but the margins get thinner and thinner.”
Stamm said delays have meant communities have to rely more on smaller backup generators while they wait for materials.
“It’s a bit nip and tuck at times to make sure the lights stay on all the time,” he said. “And it doesn’t look like it’s going to improve much through this summer.”
It’s not just big projects being affected by increased prices and supply chain hang ups.
Shelby Clem is a field supervisor for RurAL CAP, a nonprofit that, among other things, helps maintain safe and affordable housing statewide. He’s in the middle of surveying homes in Bethel for weatherization improvements. The idea is to make upgrades that will ultimately help residents save on heating and maintenance costs.
Surveying happens now so that they can place all their material orders on April 1 when RurAL CAP receives its annual funding from the Alaska Housing Finance Corp. Clem said it’s difficult to make his recommendations while delivery schedules are so backed up and prices are through the roof.
“Three years ago, a piece of plywood was $17. And now, last time I checked, it was close to $58. That’s really coming into play a lot because everything we do has to have a savings investment ratio on it. And it’s really tough to get a payback when you’re paying triple times the price of plywood,” Clem said.
In Bethel, after already waiting more than five years to add on to the Yuut Elitnaurviat campus, Hoffman recently had to accept that rebuilding won’t start until the 2023 season. He said the materials weren’t going to make it in time to start this summer.
“So we have to wait. We’re ready to go. We are ordering all of our materials, but talking to our vendors, we will not have them until next year,” he said. “Not this spring but the spring after and we’ll have a lot of that coming in on that first barge in 2023.”
Pre-construction work will be done in the next few months, Hoffman said. Then the site will stay vacant and ready until 2023.