Port gets $1 million

MAT-SU -- The Mat-Su Borough Assembly recently agreed to set up a contingency fund of nearly $1 million for work being done this summer to build a deep-draft dock at Port MacKenzie.

The fund will allow the administration to be more flexible if cost overruns occur as the dock is built. Some assembly members challenged the idea of setting up a contingency fund, saying that having the pot of money on hand was an invitation to contractors to let costs creep up.

The fund was suggested, Mat-Su Borough Manager John Duffy said, after opening bids for construction and finding the lowest bid was $9.97 million -- almost all of the $10 million in bond funding approved by borough voters in 2003.

Assembly Member Jim Colver said he was concerned about the public perception of setting the money aside in the contingency fund.

"At this time, I think we need to be in damage control," Colver said, noting that the delay in construction and the small number of leaseholders at the dock have people questioning its viability. "I think we need to be a little bit more cautious -- If we don't open the door for the money to be right there, then we can monitor it more closely."

"I don't think we need to nickel and dime it at this stage," Assembly Member Betty Vehrs said.

When asked if a decision not to set up a contingency fund would delay the already time-pressed project, Duffy said it could.

"At a minimum, it would create a one-month delay, and could stop the project a minimum of two to three weeks," Duffy said.

Assembly Member Talis Colberg said he, too, was concerned about placing the money in what appears to be a readily accessible fund that could allow contract overruns to be approved without assembly approval.

"We seem to be taking ourselves out of the oversight role, and that could cause significant problems," Colberg said. He, along with Colver, paired up in an attempt to quash the move to create a contingency fund, but the motion to deal with the issue separately failed by a 4-2 vote.

Duffy said borough staff won't be able to approve any large contract overruns. Any change order exceeding $15,000 will still come before the assembly, he said. Duffy said it was unusual not to have a contingency fund for a project of this size -- school-construction projects generally have a contingency fund built in, he said.

"This would be the first construction project of this size we've ever, if we do not appropriate these funds, didn't have contingency funds," Duffy said. "In every case, we've used some of the contingency -- but we have not spent it all, in every case."

Assembly Member Jody Simpson said she was surprised to hear Colver suggest residents were opposed to work on the Port.

"I take issue with the characterization that putting aside a contingency fund of 10 percent … is equivalent to damage control," Simpson said. "It's a project that has been passed by the voters and funded by the legislature … To quibble over [the fund], at this point, is ridiculous."

Colver said he believed dealing with the issue now would stay potential overspending.

"I think this project is going to run way over," Colver said. "I'm not in favor of just having a blank check out there."

Despite Colver's objections and his sole opposing vote, the assembly passed the ordinance.

Contact Rindi White at rindi.white@frontiersman.com.