the Haines Borough Assembly unanimously approved a $598,000 settlement to be paid to small boat harbor contractor Pacific Pile & Marine for its claim of differing site conditions.

PPM claimed last summer that the harbor basin was harder than described in contract documents, causing a $1.1 million budget increase.

In 2013, PND Engineers analyzed the dredge basin for a geotechnical report that was used to determine the project’s expense. In its response to PPM’s claim, PND questioned the sample size used to test the dredge materials and the accuracy of its testing method, including how the materials were handled and stored.

After a series of discussions about the validity of both sides’ claims, the borough entered into mediation with PPM.

In a committee-of-the-whole meeting last week, borough manager Debra Schnabel recommended the assembly settle with PPM. She told the assembly the cost of mediation would likely be less than battling the company in court. “I think we came to understand the position that PPM had…nobody walks away from a mediation saying, ‘Yeah that was great.’ Everybody walks away saying, ‘Well we did the best we could and it’s settled.’”

PND recommended to the borough the number of test holes to drill when analyzing the harbor basin. Assembly member Tom Morphet said during Tuesday’s assembly meeting that the borough should ask for more test holes next time it receives a similar recommendation.

Assembly member Heather Lende said when a bid for a project comes low enough that it seems too good to be true, then it probably is. “That’s kind of a lesson in my mind, that when you have a bidder that comes in that much lower they’re probably going to figure out how to make that up somewhere and I don’t know how much a government the size of the Haines Borough is going to be able to do about that no matter how many test holes we drill.”

The borough will now pay PPM $13.3 million for the contract. Engineers originally estimated the project to cost $15 million.