On June 27, borough staff recommended the assembly proceed with awarding a harbor project to low-bidder Hamilton Construction. But the assembly took no action after public facilities director Brad Ryan removed himself from further discussion following allegations against him by the losing bidder and as a former assembly member accused that same bidder of inappropriately lobbying assembly members to rebid the job.

Last month, bids for the Portage Cove boat-launch project came in $1 million over engineer estimates.

The project consists of installation of a two-lane boat launch ramp, parking lot and harbor park. The work also includes five possible smaller projects, including water, sewer and electrical work.

Construction will likely start and finish next summer, Ryan said.

Skagway-based Hamilton Construction was the low bidder at about $5.8 million. Southeast Roadbuilders was the only other bidder, quoting nearly $6 million. Southeast Roadbuilders was represented by area manager Roger Schnabel, who sold the company to a subsidiary of The Colas Group, Colaska, in January 2018 and has remained on for a transitional period.

The borough already intended to spend about $750,000 of state grant money on the project, but is now deciding how it will come up with an additional $1 million.

Ryan told the assembly on Thursday that staff recommended awarding Hamilton the job, cutting out some work items to save $250,000 by removing landscaping, concrete memorials, restroom access stairs and a covered shelter.

With those cuts, the borough would spend most of the state grant funds it has available, holding back some of the state money for designs of permanent moorage floats, Ryan said.

Ryan was put in charge of a staff negotiating team with Hamilton Construction after borough manager Debra Schnabel recused herself last month, citing a potential conflict of interest — Roger Schnabel is her brother.

Prior to Thursday’s meeting, Roger Schnabel privately contacted four assembly members to push for rebidding the project. He argued that Hamilton Construction did not comply with the terms of the bidding process, according to Schnabel’s interpretation of the contact timelines.

He contested that the unofficial bid results, emailed by the borough manager’s executive assistant Krista Kielsmeier June 4 at 8:51 p.m., counted as the official posting of the bid, which would start the clock on when the apparent low bidder had to submit required paperwork to get the contract.

“These are draft bid results, not yet confirmed by the engineers,” Kielsmeier wrote in the e-mail to Schnabel and Hamilton, with bid results attached.

Borough clerk Alekka Fullerton, backed by borough attorney Brooks Chandler, called Roger Schnabel’s claim on the official posting date “unequivocally untrue.”

“The term ‘notice’ is a term of art,” Fullerton said, “We had to (post) notice, not just give notice. We had to publish the notice in a specific way, and we did that.”

Ryan posted a memorandum with official bidding results and instructions for the lowest bidder on June 12.

“The apparent low bidder has until 4:30 p.m. on June 17, 2019, to submit the Subcontractor’s Report, Section 00360 to the Engineer Department Contracts Office,” said the memorandum posted on the Haines Borough website.

After a little confusion on the exact requirements, Hamilton submitted all the information on June 17.

At the June 27 assembly meeting, members Stephanie Scott, Tom Morphet and Sean Maidy questioned the timeline of the bidding process.

“I spoke with Roger Schnabel about this a few days ago, I believe he spoke to a couple other assembly members as well,” Maidy said. “It’s all about the way the papers were filled out, and I have some concerns about how they were filled out. At this point, there’s enough questions for me to lean toward rebidding the thing for transparency’s sake.”

Morphet asked to have a committee of the whole meeting to hash out what he called “a couple arguments for possible rebidding of this project,” but the conversation got sidetracked.

Scott asked Ryan for a timeline of when bidding documents were due and turned in, and assembly member Heather Lende encouraged the assembly to take a step back.

“We just got all this information, we’re also hearing some other information, and this is still going to be on the agenda for July 18,” Lende said. “We’re not acting on it tonight, and I think it’d be premature to say, ‘oh yeah, we bid it again,’ and I think it’d also be premature to say, ‘oh yeah, everything’s fine,’” Lende said. “I would ask staff and Mayor to figure out what’s going on.”

Assembly members Will Prisciandaro and Brenda Josephson were not contacted before the meeting by Roger Schnabel, who said he couldn’t get ahold of Prisciandaro and “didn’t want to” speak with Josephson, who works for another development company owned by Schnabel.

“I don’t get why we would rebid it,” Priciandaro said. “Nobody has brought up anything that we’re going to be changing so I don’t see why we’d rebid.”

Audience member Margaret Friedenauer called Roger Schnabel’s discussions with assembly members before the meeting inappropriate.

“The competing bidder has been in communication with (almost) every assembly member, and that’s ex parte,” Friedenauer, a former assembly member, said. “Ex parte” is when only one party to a dispute is present, excluding others from the discussion.

Roger Schnabel was acting against good public policy, said Nils Andreassen, Alaska Municipal League executive director. “Bidders aren’t supposed to contact officials making those decisions,” he said in an interview this week.

Schnabel later told the CVN he had “every right” to speak with assembly members, he worried he would be restricted by the mayor’s three-minute time limit if he waited for the assembly meeting, and he didn’t trust staff to tell the full story.

“This is about the integrity of a bidding system and we have to maintain that integrity,” Schnabel said.

The June 27 assembly meeting ended with Ryan removing himself from project negotiations after a conversation with Roger Schnabel outside during the meeting.

“Roger just came out and accused me of having something to gain from giving the project to Hamilton,” Ryan told the assembly during public comment. Ryan is currently among three finalists for the borough manager position in Skagway. Schnabel accused Ryan of wanting to award the contract to Hamilton in order to get the manager position.

“If you’re going to rebid it, you’re going to have to do it without me,” Ryan said before walking out of the assembly meeting.

Roger Schnabel said the comments Ryan relayed were true, but he wouldn’t characterize them as a threat.

“I don’t believe I threaten folks,” he told the CVN. “However, it is an interpretation of the person receiving the comment.”

Kielsmeier said the idea of rebidding the project makes her “highly uncomfortable.”

“To come with this five-day technicality to throw the low bidder out, it’s unethical and it’s wrong,” Kielsmeier told assembly members. “Would you be talking about rebidding it if Southeast Roadbuilders was the low bidder? Are you being fair to Hamilton?”

Hamilton Construction owner Jeff Hamilton declined to comment as per his attorney’s recommendation.

Assembly members have until their July 18 meeting to review the money-saving reductions in the project and award the bid.