August 24, 2012 • Vol. XXXV, No. 15
Tatum Sager walks her bike up to the racks in front of Skagway School on August 15, the first day of classes. See more photos from the first day of school on page 6 of our print edition.
Photo by Jeff Brady
Restraining order against municipality lifted by judge
Western Marine files protest over ‘local preference’ boat harbor award to Hamilton
By KATIE EMMETS
An Alaska Superior Court Judge on Tuesday lifted a temporary restraining order placed on the Municipality of Skagway last week, after Western Marine Co. was not awarded a bid for the Skagway Small Boat Harbor improvement project. Rather, the judge told the company to proceed with a formal protest with the municipality. He also denied the company’s request for a preliminary injunction.
Six construction companies that bid on the project, and although Western Marine came in with the lowest bid at $9,584,090, the project was awarded to Hamilton Construction, LLC, after figuring in the local bidder preference.
Though Western Marine’s bid was $120,235 lower than Hamilton’s $9,704,325.59, the municipality applied a 5 percent local bidder preference to Hamilton’s bid, which resulted in Hamilton’s bid dropping to $9,219,109.31, which made it the lowest bid.
Pursuant to Skagway Municipal Code 4.05.040, a local bidder preference allows the municipality to award the contract to a Skagway bidder if its bid is not more than 5 percent higher than the lowest bidder.
As stated in the complaint filed by Western Marine Co. on Aug. 14, Western Marine was announced the lowest bidder on Aug. 1 and was told the bids would be evaluated and awarded on Aug. 16. On the morning of Aug. 7, Western Marine employees noticed there was a Special Skagway Borough Assembly meeting scheduled for that night with the Skagway Small Boat Harbor improvement project listed as an agenda item.
When Western Marine President Kriss Hart inquired as to what was going to be discussed in regard to the project, administrative assistant Michelle Ghil said no contract would be awarded, and only bidder preference was going to be discussed.
According to the complaint, when Hart called Ghil on the morning of Aug. 8, she informed him the bid had been awarded to Hamilton Construction, LLC.
Gihl said Skagway Borough Attorney Bob Blasco has instructed her to not comment on this matter.
In the complaint, Western Marine stated that the bidder preference was not set out in the invitation to bid (ITB). After finding out the bid was awarded to Hamilton, Western Marine filed a notice of intent to protest the award.
Western Marine said Skagway’s bidder preference is inapplicable on this project for four reasons.
First, Skagway’s bidder preference is contrary to Skagway’s ITB and violates Alaska Statues 36.30.150, which states that bids shall be unconditionally accepted without alteration or correction, except as authorized in Alaska Statute 36.30.160 .
Second, applicable federal law prohibits use of geographical bidder preferences.
Third, the award to Hamilton violates Alaska Statute 36.30.170, which requires award to the lowest responsible and responsive bidder.
And fourth, the bidder preference violates the Equal Protection Clause of the Fourteenth Amendment, which says no state shall deny to any person within its jurisdiction the equal protection of the laws. The complaint states the Skagway bidder preference does not have a rational basis and therefore violates the Equal Protection Clause.
The complaint also alleges the municipality intentionally misled Western Marine when Gihl notified the company that it wasn’t going to award the bid until Aug. 16, yet awarded it to Hamilton during the Aug. 7 special meeting.
The complaint asked the Alaska Superior Court to assume jurisdiction over the matter by placing on the municipality a temporary restraining order from awarding the contract to Hamilton and also award a preliminary injunction, which would halt any progress in the Small Boat Harbor improvement project.
Superior Court Judge Philip Pallenberg initially granted a temporary restraining order after receiving the complaint, and then heard arguments in a hearing on Monday.
On Tuesday morning, he lifted the temporary restraining order and denied a preliminary injunction, said Skagway Mayor Selmer, who was present in Juneau.
However, Pallenberg did allow Western Marine to go forward with its bid protest to the municipality.
As per Skagway Municipal Code 4.05.050, “a party may protest award to any other party of a competitive sealed bid or competitive sealed proposal, but such protest shall be heard only if protests have also been filed against the award recommended by the manager and against any other bid or proposal having a higher ranking than that of the party filing the protest.”
Because Western Marine was the lowest bidder without a 5 percent local preference, they are able to file a protest.
Selmer said Western Marine formally filed a protest Monday, after it was given the go-ahead by Pallenberg.
According to the code, the borough manager will now review the protest and send Western Marine a written response of his findings within ten business days that either the protest is reasonable or the protest’s outcome would not be in the best interest of the municipality.
Selmer said he could not make any additional comments because of pending litigation, but he said Wednesday that the borough will need three volunteers from the community to serve on a review board to hear the protest. Anyone interested should contact Borough Clerk Emily Deach at City Hall before the Sept. 6 assembly meeting, when they will be appointed.
Wastewater plant project mismanagement alleged by operator Subcontractor Hunz agrees to leave chambers
Update below: Hunz responds
By KATIE EMMETS
During the Aug. 16 Skagway Borough Assembly meeting, Wastewater Plant Manager Tim Gladden gave the assembly an update on the plant’s renovation project, which ran into several delays getting started because of an alleged lack of experience and supervision on the project by the contractor and subcontractors.
Because the project’s superintendent is an employee of Hunz and Hunz Enterprises, Skagway Mayor Stan Selmer gave all six assembly members, including Dave Hunz himself, the owner of the company, the choice on whether or not they thought Hunz should leave the room during the discussion.
“I have a concern with your involvement with the discussion because some of what (Gladden’s) going to discuss is your firm as a contractual representative,” the mayor said. “I think you have a conflict and I don’t think you should be here for that discussion, but I would like you to have assembly agreement or disagreement.”
Selmer said he also did not want Gladden to bring up discussion points about the contract and have it be a reflection on Hunz while he is sitting there.
The assembly unanimously voted 6-0 for Hunz to leave assembly chambers.
Selmer said he went to the sewage treatment plant on Aug. 14 to talk to Gladden and public works employee Tyson Ames and was very disturbed by not only what he saw, but what he heard.
“I have received numerous calls from neighbors in the area about the smell there,” Selmer said. “We’ve had to deal with the incinerator not working and the plant not where it’s supposed to be.”
Gladden said the treatment plant is experiencing “constipation of the plant,” which is something the engineers are trying to avoid.
“We’ve had a back-up of solids both at the sludge end and at the screening end,” Gladden told the assembly. “We had to stockpile (the solids) in a dump truck out on this roadway that the crows were getting into, so there was sewage all over the road.”
Gladden said the truck was out there for about two and a half months, and plant workers continued to fill it with waste nd cover it with a tarp.
Gladden attributes the emergency truck staging to the contractor, ASRC McGraw Constructors, LLC, because of a project completion delay.
Had McGraw finished the project in March as scheduled, the plant wouldn’t need to use the incinerator to dispose of waste, so the incinerator not working wouldn’t have been an issue.
“We had no way to dispose of the screenings, we had sludge that was backing up, our digesters were full,” Gladden said. “We basically had to shut down the clarifiers in our pump systems which made those back up, so the treatment was not good at best.”
Gladden said what he saw floating out of the flume earlier that day would have gotten the Municipality of Skagway a fine from the Environmental Protection Agency.
“Really, what it comes down to, unfortunately, is we have ended up with a contractor on this job who seems to have no commitment or previous experience (with treatment plants),” Gladden said.
Gladden told the assembly that on occasion, the contractor will not provide enough parts or people, so they sit there languishing for weeks with no one on site and no one doing any work.
Gladden went on to add that the subcontractors who are working under McGraw should be directed by a superintendent, but Gladden alleged Hunz and Hunz’s supervisor on the project also doesn’t have the experience.
“A year into the job, he admitted to me the other day that he is finally starting to understand how the process even works,” Gladden said. “So how can he possibly direct the subs under him and keep them motivated and working in a timely fashion?”
But the H&H supervisor is not getting any help, Gladden said. “In the last year, I bet you he hasn’t been supplied one updated construction schedule by McGraw,” he said. “And I don’t blame him for that; I blame the contractor.”
Gladden also added that the supervisor is not there consistently, so he and Ames are left to pick up the slack of the superintendent’s duties.
“Basically we’re doing the superintendent’s job because he’s only on-site maybe an hour here maybe one day, maybe three days you don’t see him,” Gladden said. “I still don’t fault him for that, but he should have never been put in place in that position.”
Even though th supervisor is not on-site often, Gladden said, Hunz and Hunz is still regularly billing McGraw for services rendered.
In the past few months, McGraw has sent letters to the assembly asking for more money to complete the project and blamed the municipality for the delay in completion.
Selmer said he will be discussing this matter with borough attorney Bob Blasco about how to proceed.
Because this could result in litigation, Selmer said he doesn’t feel comfortable discussing the matter at this time.
Hunz responds (Sept. 1 update)
Hunz was unavalable for comment at press time for the Aug. 24 print edition, but he was interviewed the following week. Hunz said H&H has no sub-contractor agreement with McGraw, and the only thing that links his company to the wastewater treatment plant upgrade is that H&H’s general manager was hired to report back to McGraw on project progress.
“We have an employee who goes down there once a day and his job there is to take notes on progress details and (take) pictures and send them back to the contractor,” he said. “He has no authority to direct the (subcontractors) to do anything or to buy any supplies.”
Hunz said McGraw wanted to fill this position with someone local who is familiar with regional parts suppliers from Whitehorse and Seattle so McGraw could get recommendations on which distributers to buy from.
In response to Gladden’s testimony about H&H billing McGraw for hours its general manager isn’t working, Hunz said the company is sending McGraw only bills for logged hours of work, which Hunz said is fewer than 40 hours a month.
The bills sent to McGraw also consist of costs for machines, concrete and other materials H&H provides for the project
Hunz said he thinks leaving the assembly chambers while Gladden spoke was unfortunate.
Asking him to step down from the table while Gladden gave his report was one thing, Hunz said, but asking him to leave the chambers when the assembly wasn’t going to take any action was another.
“Ostracizing one member for whatever they want is kind of disturbing,” he said of the assembly. “And I could see this becoming a trend. If they don’t like your views on something, they could just ask you to leave.”
Hunz was the third person to cast his verbal vote on his staying or leaving the chambers during the discussion.
Hunz voted in the affirmative, he said, because he didn’t have all of the facts and because he could tell the vote was going to lead to him having to leave anyway.
“As I recall, there wasn’t much discussion on whether I should stay or leave,” he said. “(Stan) made his recommendation, and then we took a vote.”
Hunz said he doesn’t see his company’s involvement with the wastewater treatment plant as a conflict of interest with his position as chair of Skagway’s public works department.
“My responsibility as the public works chair is to better understand projects in the department and report back to the assembly,” he said, adding that he’s not there to tell public works entities how to conduct their business. “I’m not there to run the department.”
An update to this story with comments by McGraw will be posted when availalbe.
Left, WP&YR President Eugune Hretzay stands over the area where the piling fell. Right, borough and White Pass officials check out the damage, including a broken piling in the water below them. - Katie Emmets
Repairs made after Ore Dock piling collapses Longshoremen had warned WP&YR about dock’s state
By KATIE EMMETS
After a piling fell off the Skagway Ore Dock on Aug. 9, dock owner White Pass and Yukon Route fixed the problem within three days before losing out on any scheduled cruise ship dockings.
The piling, which is a wooden pole that holds the dock up out of the water, collapsed at about 5:30 p.m. when the Norwegian Jewel was departing from the dock.
Every time that ship leaves the Ore Dock, its stern thrusters send a steady, fast stream of water through the pilings. This has been causing the dock to sway back and forth, said Steward Stephens, Skagway port manager for Cruise Line Agencies of Alaska.
At about 5:30 p.m. the Norwegian Jewel used its stern thrusters to sail away, Stephens said, which is when a piling just south of the ore ship loader fell into the water. That area of the dock is not accessible to cruise ship passengers.
The following day, WP&YR President Eugene Hretzay and Superintendent Ed Hanousek met with Stephens and several Municipality of Skagway officials on the dock to discuss what immediate actions needed to be taken in order to repair the dock in time for its next cruise ship arrival on August 14. The municipality is the landowner and leases the tidelands to White Pass.
White Pass removed the damaged portion of the dock and installed a steel catwalk over it, Hretzay wrote in an e-mail. Repairs were completed on August 12.
Longshoreman John Tronrud said he isn’t surprised about the falling piling and added that Skagway Ore Dock issues aren’t something that started overnight.
Tronrud, who is also the chair of the Port Commission, said he first started noticing the dock’s condition deteriorating about five years ago, and this summer it became apparent that the wood was sinking.
He said he could tell because the large metal plates between the wood on the dock were rising off the wood, which meant the wood was sinking down. Tronrud also said he thinks the falling piling was not secured.
Tronrud has been writing letters to White Pass asking them to fix the dock, but they have not responded with any action, he said, adding that he doesn’t think the railroad has put adequate funding into the repair of the dock since the company began leasing the original dock section from the Municipality of Skagway in 1968.
Hretzay, however, said White Pass had kept up with maintenance issues.
“We retain engineers that survey our docks on a regular basis, and they recommend repairs and maintenance as needed,” he said.
Hretzay also added that White Pass has spent about $10 million on Ore Dock repair work in the last 15 years.
The municipality plans to use the Ore Dock for its Gateway Project and wants to gauge its current condition.
In an August 16 meeting, Skagway Borough Assembly members voted to award the Ore Dock Condition Survey bid to Moffat & Nichol, a coastal and civil engineering firm located in Anchorage.
Skagway Mayor Stan Selmer said the condition survey would require Moffat & Nichol to dive underwater to closely examine the state of the dock.
Selmer also added that White Pass is considering a surrender of the Ore Dock to the municipality for it to begin work on its Gateway Project, which is a cooperative project between the municipality, Alaska Industrial Development and Export Authority and the Yukon to enhance industrial use of its port facilities.
“We had suggested the railroad to surrender the dock on a temporary basis,” he said. “We would do the project and then return it to them.”
At first White Pass agreed to that, but then Hretzay told Selmer the railroad could permanently surrender the dock to the municipality, Selmer said.
Details and conditions of the dock surrender are still being discussed. To date, however, only a section of the tidelands southwest of the terminal and dock has been surrendered.
CALLING ALL TOADS – Jaime Welfelt, a biologist with the National Park Service, searches for signals from boreal toads, which she has fitted with transmitter belts. Once she locates the toads, which can be difficult at times, she is able to see how they are living. Toads have been on the decline for several years in Dyea. See story link below. Photo courtesy of Klondike Gold Rush NHP
BOROUGH DIGEST (complete report in print edition)
AIDEA lease not on Oct. ballot
The Skagway Borough Assembly postponed the second reading of an ordinance that, if passed, would have put a proposed Alaska Industrial Development and Export Authority post-2023 tidelands lease on the October municipal election ballot.
After receiving the document on August 1, AIDEA officials had concerns with the parameters of the proposed lease.
According to the Ordinance 12-18, the lease would begin March 19, 2023 and last 35 years. The initial rent would be 10 percent of fair market value with a possibility of adjustment after the first two years.
The proposed lease would also require AIDEA to pay $15.65 to the municipality for each ton of mineral ore that passes through the ore terminal and ship loader to be exported. There would also be a $0.35 per ton charge for an environmental escrow account, which would cover any damage to Skagway’s environment caused by ore haul.
If adopted without amendments, the lease would have restricted the amount of Skagway highway traffic by placing a 650,000 tons per year limit on truck transportation and allowing trucks to deliver ore only from 7 p.m. to 7 a.m. from May 1 to October 1.
In an August 16 assembly meeting, voted 5-1 in favor of postponing the second reading of the lease to a Sept. 6 meeting, with Assemblyman Dave Hunz voting no.
Hunz said he couldn’t support the lease the way it was written during the first reading and, because there were no changes made, he still cannot support it.
Jim Hemsath, AIDEA’s Deputy Director of Operations, will be meeting with municipal officials on August 28 to discuss concerns with issues such as the tonnage fee and the trucking limit.
Any revised lease proposal passed by the assembly would require a special election.
Five candidates file for four seats
Five candidates have filed for four two-term public office seats, but only four made the ballot as of the Aug. 13 deadline.
The candidates filing for the Skagway Borough Assembly seats are incumbent Dave Hunz and two newcomers Gary Hanson and Steve Burnham Jr. They all will appear on the ballot for two three-year seats.
Hanson is currently a Skagway Port Commissioner and sits on the Skagway Arts Council.
A 31-year Skagway resident, Hanson said life in Skagway is a great one, and he wants to keep in that way for all residents.
For the last six years, Hanson has been on various commissions and boards including the Harbor Advisory Board, the Arts Council and most recently the ad hoc Marine Highway Committee. He is also has been a port commissioner for the past three years.
“When I read in The Skagway News that there was going to be an opening on the municipal assembly, I gave a lot of consideration and thought,” he said. “With my wife’s blessing and the deadline approaching I went to City Hall and filed the paperwork.”
Burnham, who is originally from Skagway, serves on Skagway’s Planning and Zoning Commission and is the chair of the Recycling Committee.
“I decided to run for an assembly seat because I am concerned about the lack of meaningful progress on lingering issues both large and small,” Burnham said, citing several issues including housing, year-round economy, school funding and bear-proof garbage cans.
By running, Burnham said, he hopes to encourage young people in the community to take part in Skagway’s future.
“As a motivated, educated, lifelong resident, I can bring a new perspective that could help Skagway to be more pro-active in addressing current and future matters,” Burnham said. “There are too many last minute, forced decisions being made which can only limit our options.”
Hunz, the only incumbent, has held a seat on the Skagway Borough Assembly for 15 years.
He said he has lived in Skagway his whole life and enjoys contributing to his community.
Only incumbent Stuart Brown filed for one of two seats on the Skagway School Board by the 5 p.m. Aug. 13 deadline, but local counselor John Hischer later filed as a write-in candidate. Hischer said he was debating whether or not he should file for candidacy, and after seeing there was only one person running for two seats, he decided to run as a write-in.
Hischer’s oldest daughter, Lina, began her first year of school in the 4-year-old preschool class, and Hischer said he thinks it’s a good time for him to start getting involved in Skagway School. Hischer also said he spoke to several former Skagway School Board members, who all encouraged him to run.
Hischer helped develop policies and procedures for the Skagway’s preschool and helped coordinate fundraisers.
Those who wish to be in the running for these positions can still file as write-in candidates until September 28.
Three more Skagway project bids awarded
In an August 16 Skagway Borough Assembly meeting, members voted to award bids for three municipal projects which are set to begin soon.
The assembly awarded the bid for a condition survey of Skagway’s Ore Dock to Moffat and Nichol for the amount of $169,000.
Because the Municipality of Skagway, along with AIDEA and the Yukon Territory, plans to revamp the ore dock as part of the Gateway Project, it wants to get an idea of what shape the dock is in before making any large plans.
Two companies submitted bids, Moffat & Nichol and PND Engineers Inc.
Former Skagway Mayor and longshoreman Tom Cochran was on the scoring committee.
“Both companies are well-qualified, but PND has too much history with White Pass for too long,” he said. “It is our opinion that we want an independent company to do this.”
The assembly voted unanimously to award the bid to Moffat & Nichol.
The assembly awarded a Recycling and Solid Waste Management Plan bid to SCS Engineers for $95,870.
There were two companies that applied, SCS Engineers and Sheinberg Associates.
Skagway Recycling Committee Chair Steve Burnham Jr. said SCS Engineer’s plan was much more tailored to what the committee wanted to see.
SCS is also willing to do a waste audit, which was not included in Sheinberg Associates’ proposal.
The assembly voted unanimously to award the bid to SCS Engineers.
The bid for the Skagway Public Library was awarded to North Point Construction Co. for an amount of $1.197 million.
Although the lowest bidder was Sunland Development Co. with a bid of $1,174,900, North Point Construction Co. is a local company, so a 5 percent local bid preference was added to its bid.
The assembly voted unanimously to award the bid to North Point Construction Company.
Coastal Zone Management program on state primary election ballot
On Tuesday, Aug. 28, Alaska voters will have the opportunity to cast their vote on Ballot Measure 2, which, if passed, would reinstate a federal Coastal Zone Management program in Alaska.
The program operated for 34 years until a political stalemate forced it to sunset on July 1, 2011, making Alaska the only U.S. coastal state to not have a Coastal Zone Management program.
In 2011, Sea Party Alaska, the group behind the Ballot Measure 2, launched a citizen’s initiative to bring it back.
Earlier this year, the Sea Party collected more than 33,000 petition signatures to place the issue before Alaska voters.
The new initiative calls for a governor-appointed coastal policy board made up of 13 members. Nine members will be chosen from a list composed of at least three names from each region. The names will be nominated and submitted by the coastal districts of each region.
The board will also have four state commissioners from these departments: Environmental Conservation, Fish and Game, Natural Resources, and Commerce, Community and Economic Development.
According to the ballot measure, the board will review and approve coastal district management plans after receiving the department recommendations. It will also establish continuing coordination among state agencies to facilitate the development and implementation of the program.
If the initiative is adopted, Alaska coastal districts will develop and adopt district coastal management plans, which could be based upon a municipality’s existing comprehensive coastal management plans.
Skagway Assemblyman Mike Korsmo said he thinks the program is helpful because it gives the public say in what happens in Alaska communities.
“The best government happens at the local level with citizen input,” he said. “It allows residents to give their opinions and weigh in on projects without developers and big industries steamrolling over them.”
Korsmo said the program will be beneficial because it consolidates the permitting process.
The program would also protect Alaska coasts from projects that could potentially harm them, Korsmo said.
He said Skagway has several Areas Meriting Special Attention (AMSA) created during the process. These include Pullen Park and the Skagway River corridor.
Where supporters of the initiative see the program as allowing for more say and discussion from Alaskans in decisions that could negatively impact their coasts, those who oppose the initiative see it as more red tape.
According to a statewide distributed “Vote No on 2” campaign mailer, the initiative will create more red tape.
“Measure 2 means more red tape and new regulations that will harm our economy and jobs, and threatens personal property rights,” read the mailer for the campaign, which is supported by Alaska Miners association, Conoco Phillips and Shell.