Assembly borrows $2.5 million to fix broken dock

PALMER — In the midst of repairing one years-old maritime budget disaster, Mat-Su Borough officials have discovered another and swallowed an associated multi-million-dollar price tag.

The borough assembly voted 5-1 on Tuesday night to approve an emergency $2.5-million loan from the borough’s land management fund to cover the cost of repairs to the barge dock at Port MacKenzie. The expenditure was offered as an amendment to a piece of legislation originally intended to advance the sale of the troubled M/V Susitna (approval of payment for the ferry sale also passed 5-1). The move is allowed in certain emergency situations under Alaska law, but was extremely unusual, assembly members said.

The loan comes from a fund containing the proceeds of borough land sales, limiting the short-term exposure of taxpayers to the costs of repairs, according to District 1 Assemblyman Jim Sykes. However, the appropriated money could potentially affect taxpayers down the line in what is likely to be a difficult budget season next year, Sykes said.

Borough port director Marc Van Dongen said the borough became aware of the damage in June, and listed a series of steps they had taken to try and prevent what was at first a four-inch gap as it gradually grew into a nearly four-foot hole in the dock, imperiling nearby electric panels and a conveyor belt connecting the port’s deep-draft dock to the shore and threatening to inflict damages of between $10 and $15 million. The damage occurred at a roughly triangle-shaped piece of steel — called a wye — where two cells in the dock run together.

Ordinarily, insurance would step up to fill in the gaps and cover the cost of repairs. However, the borough’s insurance company wants an analysis on the original gap before paying out any of the costs of repairs, Van Dongen said.

“They want us to pull that damaged wye and cut sections out, take it to a laboratory and figure out what caused it,” he said.

The original gap allowed seawater to seep behind the protective plating at the edge of the dock and remove gravel from behind the wall, eroding the dock.

The original gap occurred on a piece of solid steel driven into the seabed. Officials aren’t sure why it happened, though Van Dongen outlined a few possible causes.

“It could have developed a crack when they [drove the piles] back in ‘99,” he said. “If they hit a rock, for instance. It only goes about 16 feet into the seabed. If they hit a rock, it could have started a crack, and it could have taken 16 years to work its way back up.”

Even despite the steep price tag, the borough has gotten off light relative to maintenance expenditures at the port, which have totaled roughly $200,000 over 16 years, excluding large-ticket capital projects like a $1.5-million installation of cathodic protection at the dock and thousands of dollars in rip rap deployment at an area just to the north of the dock.

Other possible sources of the damage include any of hundreds of earthquakes that have happened since the dock was installed or perhaps flaws in the steelwork created by overheating the steel that makes up the wye. By Oct. 22, the half-measures had necessitated the use of an emergency contractor and excavation. Funding particulars were under wraps among borough staff until the last possible minute, Sykes said. Borough staff handed District 5 assemblyman Dan Mayfield the amendment earlier in the day Tuesday, and he moved it forward at the meeting.

Because of the looming threat of sea ice in Cook Inlet, Van Dongen and borough manager John Moosey both say repairs can’t wait.

“Certainly this is not the preferred route,” Moosey said. “However, with the tear in the cell and winter coming, essentially our concern is that if we cannot move immediately on these repairs — and this appropriates funds to allow us to do the repairs — we think there will be a much greater loss, much more expense. And also, too, we are concerned with the weather. We have worked on every option that we can.”

The amendment route was necessary because there was no time to introduce the measure as a separate ordinance, Moosey said.

“If we felt in the examination we could wait three days, a week, a month it would be done,” he said. “We need to borrow additional funds from our community development earnings, and it needs to happen ASAP.”

In the past, the assembly trimmed budgets by eliminating funds that could have been used to deal with the situation in the past, precipitating the loan, Moosey said.

“We always do this,” he said. “So essentially, we have had funds for these type of events, and nothing happens so we make ‘em smaller and smaller so we can do more things.”

He compared the situation to having inadequate insurance in the event of an emergency, Moosey said.

“It’s probably a bad, quote, but it’s essentially ‘I didn’t get hit by lighting this year, and I didn’t die, so I saved money,’” he said.

Assemblywoman Barb Doty said the suddenness of the maneuver and the absence of a clear financial statement — officials could not say whether they had obtained a performance bond (money used to insure the cost of a large capital project in the event of project failure) for the project — was unnerving.

“I’m uncomfortable with this being attached to this particular issue,” she said. “It’s a critical issue with discussion. I understand the urgency of the matter, but I see no clear financial statement about why this has to be done in the next three days to two weeks, but I’m uncomfortable with how this is being presented.”

District 3 assemblyman George McKee cast the lone dissenting vote over insurance issues and concerns about the project’s longevity.

“There are two things that concern me about this,” he said. “Number one, that no one knows what is causing this. So, if we fix it, what’s to say three years from now we’re not gonna have the same problem? I’ve dealt with this kind of thing for five years, and if the insurance is telling you that they’re not going to pony up the money right now, that they want to investigate it, that tells you that they really aren’t sure what caused it and they’re not gonna foot the bill for repair down the line.”

Some assembly members appeared shocked when they found out the details and price tag of the repairs. Borough officials had worked to finalize details for the emergency loan as recently as noon Tuesday, Sykes said. Assembly members had known about issues at the port and anticipated some kind of funding amendment would be needed, but were taken aback by its appearance Tuesday, according to Sykes. Sykes said he didn’t regret voting for the expense — just the manner in which the repairs were brought to the public.

“In the end I don’t think we had many choices,” he said. “We took the most reasonable choice of a small array of not-good choices.”

Contact reporter Brian O’Connor at 352-2270, brian.oconnor@frontiersman.com, or on Twitter @reporterbriano.