Turnagain Marine is asking the Haines Borough for “prompt payment” of $2.8 million in work on the Lutak Dock project that likely won’t be covered by the federal government as expected.
The news came from an invoice that was shared with assembly members, ahead of a planned workshop on Wednesday evening about the $25 million dollar project to rebuild the town’s aging cargo port infrastructure.
In three letters attached to the invoice, Turnagain said its guaranteed maximum price could exceed the $25 million for which it was contracted.
“The suspension of the contracted scope of work, the Borough’s failure to advocate for the project, and the Borough’s refusal to support the progression of the scope of work has resulted in delays and impacts to Turnagain,” wrote Turnagain President Jason Davis.
Borough manager Annette Kreitzer said she contacted the Department of Transportation’s Maritime Administration (MARAD) to see if the costs were reimbursable. The borough has been awarded a $20 million grant for the dock rebuild. In an email Kreitzer wrote that a MARAD grants administrator told her it likely wasn’t reimbursable. She said she contacted the borough’s federal lobbyist to see if they could help.
The news about the invoice drew questions and criticism from assembly members. Several assembly members declined to speak on the record until they have more information about what the news means for the borough.
“I have more questions than I have answers right now,” said assembly member Ben Aultman-Moore, “I’m a little perturbed by the idea that it’s entirely the borough’s fault.”
Turnagain purchased nearly $10 million in steel last year before it had approval from the federal government. Officials said Turnagain had acted without borough approval too, and the company ultimately sold the steel.
“It seems like [the guaranteed maximum price] Turnagain offered us [was] based on the idea that they would be purchasing the steel out of turn, which is exactly what happened. So I think they have to take more responsibility,” Aultman-Moore said.
Jessica Plachta, director of Lynn Canal Conservation, and critic of the current Lutak Dock design, said that the company is wrong to charge the borough for the services.
“The bottom line is that Turnagain did this work prematurely, and they shouldn’t be charging the borough for it. If Turnagain had waited for approval from MARAD, this invoice would have been eligible for reimbursement,” she said.
In one letter, Turnagain claimed the borough had “elected to halt the progression of the MARAD approved pile dock concept and wishes to examine other options and alternatives.” Assembly members have been looking into adding options for a downsized version of the dock, which Turnagain blamed for delays in the project.
But Assembly member Debra Schnabel pointed out that the assembly has never taken any action to abandon the current design, which relies on an encapsulated steel bulkhead. She called the assertion in Turnagain’s letter “erroneous.”
“The assembly has never pulled that encapsulated design. We have never said there’s an approved alternative,” said Schnabel.
Turnagain’s invoice also contains line items for purchasing and coating pilings for a planned steel bulkhead. Assembly members said their understanding was that Turnagain had not been authorized for any work beyond design and permitting.
Schnabel also raised concerns about the timing of the assembly receiving information. The letter was sent on April 8. Assembly members heard about it just a few days ago after mayor Tom Morphet asked the manager to release the information.
“The content of all three letters in my opinion would be worthy of informing the assembly almost immediately,” Schnabel said.
The Lutak Dock work session is scheduled for 5:30 p.m. at the assembly chambers and online.