Assembly member Debra Schnabel speaks as Kevin Forster looks on at a May 14 assembly meeting. “Our owner advisor has failed us,” Schnabel said of R&M Engineering after revelations of a nearly $3 million bill from Turnagain. (Lex Treinen/Chilkat Valley News)

Assembly members voted for additional legal review and to look into hiring new project managers after learning of a surprise bill for nearly $3 million from the contractor in charge of rebuilding the Lutak Dock. 

At a work session last week and at Tuesday’s assembly meeting, members and the borough’s attorney questioned the validity of an invoice from Turnagain Marine Construction.

The invoice included about three-quarters of the total costs for “project management” before any work had been completed. And at least one of the line items that Turnagain billed hadn’t been included in its Phase 2 contract with the borough. 

“Essentially what we have in front of us … is an application for payment that does not follow the schedule of values,”  said Charles Cacciola, the borough attorney, at Tuesday’s assembly meeting. 

The invoice included $750,000 for project management. It also included a line item for design and engineering, which assembly members said had already been billed for in an earlier phase of the project. 

Turnagain was not represented at either meeting and president Jason Davis has not responded to requests from Chilkat Valley News for clarification. Mayor Tom Morphet said Davis declined an invitation to attend. 

The invoice from Turnagain increased concerns about oversight of the project that have been percolating since the new assembly took office in the fall. It ultimately voted to hire an independent construction contract attorney to review the latest invoices and previous contracts with Turnagain Marine and to replace a key consultant on the project, Don Porter with R&M Engineering.

“Mo’ lawyers is mo’ better, at this point,” said Morphet during Tuesday’s assembly meeting. 

It’s still unclear how the borough racked up millions in expenses in the last year without assembly being aware.

Several assembly members pointed to confusion about who is actually responsible for managing the project. Borough manager Annette Kreitzer has referred to herself as the project manager in past meetings. But at Tuesday’s meeting, Kreitzer said that R&M Engineering, which the borough has contracted as an owner-advisor, is the project manager. 

Cacciola said a project manager should be reviewing invoices, comparing it to the schedule of values included in the original contract, and staying on top of progress reports. None of that appeared to have happened. The borough hadn’t gotten an invoice for work completed by Turnagain in about a year, something mayor Tom Morphet said was a big oversight despite being in regular meetings with the contractors. 

“These are basic questions we didn’t ask,” he said.  

The borough ultimately voted to look at hiring its own project manager to oversee the project.

The federal government granted $20 million for the project through the Department of Transportation’s Maritime Administration. The project is awaiting an environmental assessment before it can move forward, something that was expected earlier this spring. 

The project to rebuild the Cold War-era dock has divided Haines for years. The borough government has pushed forward with its current plan, a $25 million design that relies on a steel wall to prevent further erosion of the dock. The new assembly, which took office in October, has questioned the need for such a large project and floated the idea of a smaller project.

During last week’s work session, Don Porter from R&M blamed the assembly for slowing down the project, saying they led Turnagain to question the process. 

Assembly members pushed back on that assessment, arguing that they haven’t taken any official action that would delay the project. And, they pointed to Turnagain’s own missteps. The Anchorage-based company was found in December to have ordered $10 million in steel for the project before it had authorization. 

Several assembly members said it appeared the same thing may have happened again. Turnagain had been approved for about $300,000 in expenditures from the $20 million grant for Phase 1 of the project.

“Inherently it doesn’t make rational sense how they would operate outside of pre-obligation and expect that we’d be liable for it,” said member Kevin Forster. 

That left assembly members to speculate on Turnagain president Jason Davis’s motives. 

“He’s just scared and wants out,” said Gabe Thomas, who also blamed members of the assembly for questioning the project. Thomas said he was worried about the borough being forced to bond for the project or scrap it for a much smaller one. 

Davis submitted an invoice on April 8 before submitting a second, corrected one. The original invoice included line items for several purchases of supplies like steel which had not been approved, something that raised the eyebrows of assembly members and the borough attorney, who called the earlier invoice “highly inappropriate.” 

“It’s possible he’s done a lot more work than he’s authorized to bill for in Phase 1 and so he had to scramble to make it look legal,” said Schnabel about the bill. 

In any case, Don Porter, the lead advisor on the project with R&M, should have been reviewing the costs, assembly members said. The company is on a $200,000 contract with the borough. 

“Our owner-advisor failed us,” said Schnabel. 

The assembly ultimately voted to direct R&M to appoint someone besides Porter to oversee the project.