Borough, insurance company negotiate over school cost

Mat-Su Borough finance director Tammy Clayton said that broadly the dispute centers on how much it would have cost to rebuild Su Valley High like it was, on the old building footprint, before it burned. The new school is a little larger, at more than 50,000 square feet and more modern than the old building.

Clayton said she couldn't be more specific about the dispute, or the dollar figures involved. That information is still confidential until the final agreements are made, she said. She hoped that would happen in December.

The old school was valued at $13.23 million, but that was when it was 34 years old. Replacement value is difficult to determine and part of the ongoing discussion with the insurer, Clayton said.

Collins Construction is under contract to build the new school for $17.7 million. Borough purchasing officer Rustin Krafft said Collins is on track to be finished by Dec. 1, the date the company agreed to hand it over to the borough.

The contract included an incentive to build the school quickly or face penalties. Krafft said Collins is eligible for a $2,500 bonus for each day before Dec. 1 that the school can be used. But the flip side is, if construction runs late, Collins must fork over $2,500 for each day after Dec. 1 the company is still working on the school.

The incentive clause was added because the community wanted assurance that the school would be ready for teachers and students to move into at the semester break. Teachers will move to their new classrooms in December and students will begin classes there in January. The project stalled briefly during the bid process when the Borough Assembly canceled construction bids and sent the project out for a public bid again.

The cancellation happened because of what Krafft called "bid irregularities." Two competing contractors, in a phone conversation, told each other how much they bid on the project before the borough opened the sealed bids. Borough bidding procedures prohibit communication among contractors until the borough opens the bids.

Krafft found out about the discussion via e-mail and the process started over. Collins was selected as the winning bidder a month later.

Krafft said the delay made the difference between Su Valley opening in August -- which the School District and the community wanted -- and its later opening.

"In Talkeetna you lose your building season really quick. That short delay, it destroyed the first summer of construction," he said.

Clayton said the insurance company has so far paid $15.5 million toward the cost of rebuilding the school. A grant from the Alaska Department of Education requiring a 30 percent match from the borough will cover any gap between the school cost and the insurance payments, she said.

Find Rindi White online at adn.com/contact/rwhite or call 352-6709.