Haines elected officials recently learned that the contractor in charge of rebuilding the Lutak Dock has purchased $10 million worth of steel for the project. Borough officials were surprised and angered by the purchase, which represents a commitment to a design that newly elected leaders had expressed interest in changing.
The Lutak Dock is the main entry point for freight in Haines. It was built by the military 70 years ago, and has fallen into disrepair. But the design the borough has settled on has become controversial. The chosen design involves surrounding the existing structure with a wall of metal pipes and adding fill.
Proponents of the design say it will provide the most functionality, and has been approved by the Maritime Administration, or MARAD, the federal agency that is providing the funds for the project. Opponents say the design is too large for the community’s needs — that it will be expensive to maintain and will have to be rebuilt when the metal pipes eventually rust.
They also say such a large dock would invite mining companies to use the facility for ore transfer, which could attract heavy truck traffic that would pass through downtown Haines.
The debate became central to the last local election, when all the candidates in favor of changing the design got elected. The new leaders expressed interest in pausing the work and considering a design with a smaller footprint. They discussed the situation at a workshop on Nov. 15.
Turnagain Marine Construction is the company in charge of rebuilding the dock. Company president Jason Davis attended the meeting, and two days later he wrote an email to Haines Borough manager Annette Kreitzer to alert her that his company had purchased close to $10 million worth of steel.
“It appears that we had the coil ordered, the steel order converted from a hold to a binding order, I believe it was in August,” Davis said.
Kreitzer says she did not fully grasp the importance of the email until after she returned from vacation, three weeks later. She did not alert elected officials.
“I wanted to talk to MARAD first, and hoped that I would have some kind of an answer for the assembly about the impact or the effect of this action,” she said.
Mayor Tom Morphet says on Dece. 20, he told the manager that he was going to speak with Davis about project costs. That was more than a month after Davis sent the email.
“And that is when the manager shared with me the Nov. 17 letter. And my question for the manager is, ‘When were you expecting to share that information with us?’”
Morphet called a special meeting of the Borough Assembly to find out more about the situation. At the meeting, Kreitzer said she understands assembly members’ frustration, but defended her approach.
“I understand the feeling of assembly members that I’ve been withholding information from them and I apologize for that,” she said. “It is the way that I have done business, in terms of trying to make sure that there is context in whatever I present to the assembly. I try to get the facts so that I can present them to the assembly. You may not like that answer, but that is my answer.”
Assembly members were concerned that purchasing the steel before receiving approval from MARAD to do so might jeopardize the funding.
Assembly member Kevin Forster brought up the case of another grant the borough lost amid allegations of improper management -this one from the Federal Emergency Management Agency, for work on the Porcupine road.
“We are just on the tail of being involved in another grant reimbursement program in which we are still trying to figure out exactly where it went off the rails, but we are left holding the ticket for the bill and we are not being reimbursed by the agency,” he said.
MARAD requested information regarding the steel purchase. Morphet summarized his understanding of the situation.
“Today our project is in limbo,” he said. “The federal department of transportation marine offices, known as MARAD, which sponsors our $20 million grant, is investigating issues relating to our administration of this grant offer, and why apparently in October, Turnagain purchased $10M of steel without the required authorization of the Haines borough and MARAD.”
Davis, of Turnagain, denied that the company did anything wrong.
“The only reason there is a question about this process is because members of the council want to terminate the project,” he said. “And that’s certainly within your power to do so, but I think that it’s somewhat disgraceful that you are trying to take the borough staff and a contractor that have been working in good faith to execute the agreements and to fulfill the grant obligations and try and find some way to pin fault.”
The meeting went on for more than three hours, and the atmosphere was tense at times. Many questions were left unanswered.
How significant of a breach of the grant’s requirement was it for Turnagain to purchase steel?
Kreitzer recently sent MARAD a letter with a detailed timeline of the purchase. In it, she states that Turnagain purchased the steel at their own risk.
Can the borough still change course and choose a different design under the same grant?
Mayor Morphet says he has been in communication with Sen. Murkowski’s staff and that they are willing to help the borough effect that shift.
If the design is changed, who would be on the hook for the $10 million steel purchase? At this point Turnagain and the borough disagree and point at each other.
The answers will largely be determined by MARAD, and multiple attempts to reach the agency for comments have remained unsuccessful.
