The Anchorage Assembly on Tuesday approved a five-year contract worth $30 million dollars for engineering company CH2M Hill to manage the Port of Anchorage Improvement Project -- a company the city is currently suing over work already done at the port. It also approved an ordinance, sponsored by Assembly member Chris Birch, to move municipal elections to coincide with statewide elections in November.
Port contract approved
The port project has been stalled since 2010 after serious design flaws were found in work already done on the north dock -- work in which former oil field services and construction company Veco had assisted. Much of that work must be redone, and the city sued several companies involved with the project, including Veco. In September 2007, CH2M Hill bought out former Alaska oil field and construction services company Veco, and with it, inherited the court case.
The choice of a company the city is suing to manage a city project was the source of concern for Assembly members, who held several work sessions regarding the issue and delayed awarding the contract earlier this month. In the end, Mayor Dan Sullivan's administration and CH2M Hill executives were able to assure the Assembly of the company's qualifications and intent in the project -- promising to create a "firewall" between the lawsuit and the port management work with which the company is now tasked.
The contract passed the Assembly by a vote of 11-1, with Assembly member Bill Starr voting against and Patrick Flynn abstaining. But the contract award was not a slam dunk and drew more than an hour and a half of testimony and comments from the Assembly. Some of the members were concerned in particular about the city giving a contract to a firm it is suing.
Assembly member Adam Trombley asked, "Is it typical that your company enters into contracts with municipalities or companies you are involved in litigation with?"
Stacey Jones, CH2M Hill's west coast maritime operations vice president, said that the company has been involved in a contract with BP, at a time the companies were suing each other.
Assembly member Paul Honeman said he was worried about the initial five-year length of the contract, and the fact that a design and scope for the project has yet to be chosen. Honeman warned that the project contract is too open-ended.
"Let's pick a lane," Honeman said.
Assembly member Bill Starr wanted to make sure that none of the former Veco employees will be in charge of the new work, since the city is suing over the quality of the construction already done on the port.
Despite its concerns, the Assembly relented and approved the contract for CH2M Hill to take over the port project's management. The contract includes a municipality-run oversight board and Assembly inclusion on all spending, terms that supporters of the award said were enough to approve it.
"We had absolutely none of (the oversight guarantees) before," said Assembly member Jennifer Johnston. Johnston and others pointed out that the ships that come to the Port of Anchorage often have to stop unloading to avoid the low tide and sandbars that have built up near the Port.
"I was not going to vote for this contract the first time," Assembly member Dick Traini said. "But when I hear that ships have to move into the Inlet to avoid the sandbars, I am concerned," Traini said.
The contract would also include two two-year extensions, if needed, at a rate of $6 million per year. In total, the contract could be worth $54 million over nine years. CH2M Hill will provide project management -- overseeing subcontractors and engineers. It would also help the city choose a design firm -- the engineering company that would design the port fixes and other expansion work.
The Port of Anchorage is responsible for handling most of the goods that come into Alaska. It unloads container ships and barges twice per week -- supplying Anchorage and the rest of Alaska with everything from groceries to cars. The port needs expansion work to handle larger barges and more oil deliveries. The project has already spent hundreds of millions of dollars, and much of what has already been done there must be reworked.
Veco had overseen the initial design and troubled installation of controversial open-cell sheet pilings at the port's north dock. The pilings were supposed to create new dock space by allowing workers to backfill earth and rocks, but much of that work will have to be redone after the pilings failed and allowed Cook Inlet silt to flow under and around them.
The contract award, although supported by the mayor and his staff, as well as the city's Building Review Board, had faced some opposition from the Anchorage Assembly.
In January, the municipality announced it had chosen CH2M Hill as its port improvement project manager despite the ongoing lawsuit. At a Feb. 7 work session, Assembly members peppered both the municipality and CH2M Hill with concerns about the proposed contract: They questioned the wisdom of hiring a firm to do work on the same project the city is already suing the company over; the potential of spending $30 million over the next five years for a project manager when the city has yet to choose a final design for the project; and why the management team had to be picked now.
CH2M Hill said it would only receive money if the municipality or Port of Anchorage gave it a work order. CH2M Hill said the size and scope of the initial staff and costs would have to be determined as the project moved forward -- including coming up with a design plan and project management plan. The company also defended its credentials and selection for the project, noting that it has a 40-year history in Alaska and is currently involved with a similar port improvement project in Gulfport, Miss., and the expansion of the Panama Canal.
"Our team has been carefully selected to include individuals with local experience relative to port and maritime facilities, expertise and permitting," said Jones, adding that CH2M Hill would work with HDR Alaska on the Anchorage project. HDR said Tuesday night that most of the subcontracting work would be going to Alaskans.
The city has about $130 million available for future port work, but the scope and size of that work has yet to be determined. The city must first select an engineering design firm to go over proposed alternatives and set a final design. Mayor Sullivan has said that process could take between 18 and 24 months and that he doesn't expect to see any dirt turned there until at least 2016. But that date remains a moving target.
Election move approved, to take effect in 2017
The Assembly also narrowly passed -- by a 6-4 vote -- a measure to move the date of municipal elections from April to November each year -- to coincide with statewide general elections. The move had faced opposition from the Assembly and the Anchorage Ethics Board -- because members were worried it could be a conflict of interest to extend their terms by moving the election this year.
The ordinance passed Tuesday night would make the election change from the spring to the fall in 2017 -- after the terms of the current Assembly members would be over.
Despite the delay in implementation, the election date change has been a contentious issue for the Anchorage Assembly. But Assembly member Birch, who is term limited and won't be running for reelection in April, said the idea to move the election from April to November was a simple one with a simple reason: to increase voter turnout.
Since 1993, when municipal elections were moved to April, on average, only 28 percent of registered Anchorage voters have bothered to show up at the polls. The numbers are slightly higher for years when the ballot included a mayoral race and lower for years when there was none. Before 1993, when municipal elections were held in the month of October, an average of 36 percent of voters cast a ballot. To encourage greater turnout on local issues, Birch wants to move municipal elections to coincide with statewide elections -- which get about double the voter participation, averaging a 59 percent turnout since 1993.
"The objective here (for municipal elections) is for 50 percent turn-out," Assembly member Chris Birch said. "It's good for the community," Birch said.
Depending on how the details are worked out -- and they have not been finalized -- the move to November could bring with it an increased cost to the city, according to the Anchorage Municipal Clerk's Office and the state Division of Elections.
State election workers would have to be supplemented with city workers -- who would handle the municipal ballot -- at each of the city's polling locations. And the city election would have to be put on a separate ballot, meaning people who show up to vote in November of each year would get multiple ballots. Opponents of the ordinance said they were worried about the cost and possible voter confusion the election date change could create. At least one questioned the intent of the ordinance: to increase voter turnout.
"When they changed the election date (in 1993) from October to April, they did it then to increase voter turnout," said Assembly member Elvi Gray-Jackson. "That didn't work then; why would it work now?" Gray-Jackson asked.
"In order to hold this election (municipal) concurrent with the state, there may be eight pages of ballot," Assemblyman Tim Steele said. Steele said he is worried that voters would not work their way through the end of the ballot -- leaving a lot of city issues unanswered.
Before the ordinance passed, Municipal Clerk Barbara Jones advised the Assembly to take its time and warned it that the proposed election date change could have unintended consequences. Jones said her office could not adequately weigh in on the ordinance because of the upcoming election -- to be held in just a few weeks. Jones advised the Assembly to wait until after the April 2014 election to address the issue again.
Despite Tuesday night's vote to move the municipal election date, the debate is far from over. Both the Assembly and the Anchorage municipal clerk are working to determine if the municipal elections might be held by mail -- as is done in other large West Coast cities, like Seattle. That and the three-year delay for Birch's ordinance may mean plenty of opportunity for opponents of the date change to modify the plan before it becomes an active and enforced ordinance.
Contact Sean Doogan at sean(at)alaskadispatch.com