Lutak Dock
The Lutak Dock rebuild has once again reached a crossroads, with the assembly deciding whether to go on the hunt for more money to resuscitate the project, or to change tack altogether.
The trouble began—or began again—at the end of last month, when a promising dock redesign fell through. The borough and contractor Turnagain Marine had for the late spring and summer worked together on developing the new concept, meant to decrease the scope and cost of the project to within the borough’s budget, while still preserving essential functions. The collaboration initially looked successful: both parties agreed to pause mediation and interim manager Alekka Fullerton was directed to finalize a contract to build the new design.
But soon after, the agreement fell through. Turnagain, after helping develop the design, said costs would be higher than expected, and the project would have to be yet again reduced in scope to meet the guaranteed maximum price. Turnagain president Jason Davis has not responded to messages from the Chilkat Valley News, and Fullerton said Tuesday that he has not been responding to phone calls from her, either.
Turnagain has now sent a new contract for a dock design that they say would fit within the borough’s budget. But borough staff and officials have called that offer unworkable, due to contract terms and the size and functionality of the proposed build.
“I cannot recommend the adoption of that contract,” Fullerton said Tuesday. “I was very upset when I received it, and it was not what we agreed it was going to be. It’s too small, it’s not going to help us in our operations — it’s just not there.”
Fullerton also suggested that contract could be a “walk-away” offer: An intentionally poor offer from Turnagain to signal that they no longer want to build the dock.
“I’ve contacted the borough attorney to ask (Turnagain) if this is a walk-away,” Fullerton said. “I have tried to speak to Jason Davis directly and have not gotten a return phone call. I have to presume they don’t want to build us a dock and are trying to get out of this. I don’t know that, but I think that.”
It’s not immediately clear what the full range of options is for what comes next. One route would be trying to continue down the existing path with Turnagain. That could include pursuing more funding to meet the increased cost demands of the contractor. To that end, the assembly has directed borough staff to apply for a $12.5 million grant to add on top of the existing $23 million in outside funding for the dock. That passed unanimously at Tuesday’s meeting. By spending more, the borough could still get closer to the original dock design.
“We’re this far down the road, let’s see it through,” said assembly member Cheryl Stickler at the meeting. “Let’s not settle for, ‘it’s good enough for today’s needs.’ We don’t compromise ourselves into mediocrity. If we have the ability to build a high-quality structure now that will last 50 to 75 years, it’s our job to make that happen at this time.”
There’s also the possibility that the borough could reopen the bidding process to have a different contractor build the dock—either a similar design, or a different design.
That’s something assembly member Craig Loomis suggested. “If we were to assume they’re either going to walk away, or we’re going to fire them, can we go ahead and rebid this thing out for a local contractor?” Loomis said.
Complicating all of that is the ongoing litigation between the borough and Turnagain over the existing dock contract. At multiple points during the meeting, assembly members suggested pausing portions of the discussion and decision-making until legal exposure was more clear.
“I think we should let our lawyers do their work before we talk too much here,” assembly member Gabe Thomas said.
Assembly member Kevin Forster agreed with him: “Our exposure from a liability standpoint is the place we need to start in order to move forward,” Forster said.
Unfortunately, a number of clocks will continue ticking as the assembly weighs its options. For one, the existing dock is in dire straits structurally, according to recent reports from harbormaster Henry Pollan.
“The dock is completely disintegrating before us,” Pollan said last week. “We are on borrowed time and have been for a couple of years now. Our footprint is slowly shrinking into oblivion.”
And even if the current dock stays intact, both permitting and money for the new dock are not finalized, and expiration dates do exist. On permitting, the borough is still awaiting final approval from MARAD—the federal subagency responsible for the dock funding. And on the money side, the grant agreement funding the potential new dock will not be finalized until modifications to the original design are approved by MARAD. That grant agreement must be complete before September 30, 2027.
Permanent manager hire
After six months as interim manager, Alekka Fullerton will likely become the borough’s first long-term manager in over a year. The assembly Tuesday voted unanimously to extend a formal job offer to Fullerton for a position that, for her, would be both new, and old. Instead of a short-term, fill-in agreement, Fullerton would be signing a three-year contract to stay on as manager. But Fullerton would maintain the same responsibilities, and same $155,000 annual pay, as in her current interim role.
“We don’t even view manager Fullerton as interim (manager),” assembly member Cheryl Stickler said Tuesday. “She’s just our manager.”
While the contract hasn’t been officially signed yet, Fullerton has said in recent weeks she plans to accept the job offer, and reiterated that message Tuesday, and there were hugs and congratulations between assembly members and Fullerton at the end of the meeting.
Before the unanimous vote to offer the contract, assembly members commended Fullerton for her people-management in the borough administration and transparency in the role thus far.
For all the praise and good feeling, the manager job remains difficult and precarious. Fullerton still has major inherited issues on her plate, like the Lutak Dock, and the assembly by code retains the right to fire the manager at any time, with or without cause.
After someone at Tuesday’s meeting referred to the long-term manager position as the “permanent manager,” Fullerton jokingly clarified: “When you say permanent, that’s for three years.”
“Without parole,” added mayor Tom Morphet.
Sales Tax
The assembly entered Tuesday’s meeting with a seasonal sales tax logjam: Many different proposals, and not enough time. It’s been weeks of back and forth discussion among the assembly trying to formulate a seasonal sales tax proposal to put on October’s ballot.
But an August 21 deadline to finalize ballot propositions made Tuesday’s meeting the assembly’s last scheduled chance to get the proposal across the finish line.
And with time running out, there were still plenty of new concerns and new ideas surfacing.
Ultimately, there seemed to be consensus on the need to pass something, even among assembly members who said they were loath to talk about increasing tax rates, even seasonally.
“Nobody likes to raise taxes, and I can’t believe I’m even up here talking about it,” Stickler said. “But we need to raise money in some way.”
Thomas agreed with Stickler’s point. “I don’t like raising taxes, but we’re stuck between a rock and a hard place,” Thomas said.
The rock and the hard place in question, which Stickler also referred to, is the significant drop off in federal and state funding the borough has seen this year, and the need to replace that funding with borough revenue.
“The state doesn’t pay its bills and it draws on its savings every year; the federal government doesn’t pay its bills,” Morphet said. “But we have to pay our bills. The buck stops here.”
There was some talk about the structure of the sales tax, and who it would hit the hardest. Stickler argued that a sales tax increase, which charges the same tax on property owners, residents, and non-residents alike, was preferable over increasing other taxation, namely property taxes.
“If we have a broad (tax) base, it does raise the burden from property owners a little bit,” Stickler said.
But that idea, of the sales tax hitting everyone equally, regardless of income or property holdings, was less popular with others. “A sales tax increase hits working folks a lot harder than some other forms of revenue do,” said public commenter and planning commissioner Eben Sargent.
In the end, the assembly didn’t choose any of the four versions of the seasonal sales tax that were laid out going into the meeting. Instead, they ended up unanimously supporting a new version, which Thomas proposed on the spot: a tax rate of 7% in the summer, and 4% in the winter, with groceries exempt in the winter on top of the rate decrease. The summer increase and winter decrease would both take effect on revenues going into the areawide general fund.
While the assembly voted to move that proposal forward, it is not yet past the finish line. The vote was to have borough staff run projections on revenue created by the proposal. A special meeting is now scheduled for Aug. 19, two days before the final, drop-dead deadline, for the assembly to take one final vote on whether or not to place the proposal on the ballot.
Other Business
Budget adjustments
The new municipal budget passed earlier this summer, but adjustments due to unforeseen circumstances are still underway. That includes the cost of new police chief Jimmy Yoakum attending a state police training academy in Fairbanks in the fall, which only became necessary when a state police board denied the transfer of his previous policing certifications.
The school comes with a price tag of $14,000, plus another $500 for travel to and from Fairbanks. The borough has applied for the tuition to be reimbursed by the state. That request is still pending.
Towers and hospitals
The assembly will be considering an application from cell-tower development company Atlas Towers to build a new cell tower near Jones Point. The potential Atlas tower has been a many-months undertaking, and cell towers have been a hot topic. But perhaps the bigger piece of news was not about the tower itself, but resistance to the tower from neighbors — specifically Southeast Alaska Regional Health Consortium (SEARHC), which owns a neighboring parcel. A letter from SEARHC asked that the tower be set back from their adjacent parcel because of SEARHC plans to build a new hospital facility in Haines. While the planning commission said SEARHC has not submitted any official plans to build, SEARHC said it has taken tangible steps in that direction.
“(SEARHC) is actively planning to develop the property for a new clinic and hospital,” wrote Litia Garrison, SEARHC’s director of strategy and business development. “(SEARHC) is currently conducting geotech studies and has engaged an architect in developing a master plan for a health campus at the Jones Point location.”
Heliski Map
The assembly Tuesday approved a new heliski map that keeps the current heliski map unchanged, except for the addition of one new area proposed by Stellar Heliskiing.
Chair of the Heliski Map Committee Richard Clement reported that the meetings of the committee resulted in fair compromise.
“We went from being (in disagreement) to actually talking to each other about what we needed to do,” Clement said. “We left the meetings with everyone agreeing that they didn’t get exactly what they wanted, but that it was good enough.”
School Siding
The assembly approved a $157,500 contract with Dallmann Bros. Construction to replace siding on the Haines School. Borough facilities director Brad Jensen said his team has checked behind one section of the siding and found no major damage or rot, but that there still could be unpleasant surprises behind other sections.