WASILLA --A nearly $3 million Mat-Su Borough road project to alleviate Parks Highway congestion is on hold until at least next month because the company providing the gravel was found to be operating without a valid permit.
The borough stopped work on the ongoing Machen Road extension project after a code compliance officer showed up at the B & E Construction sand and gravel pit on Pittman Road on a separate junk investigation last week. That's when she realized the company's gravel extraction permit had expired four years earlier, officials say.
B & E learned about the permit issue last Friday, co-owner Steve Bargabos said. He said a "third party" filed the paperwork back in 2007 and he was under the impression the company had a permit that didn't expire until 2017.
The company this week applied for a new permit. A 15-day public notification period means the earliest date for permit approval -- and resumption of road work -- is July 8, said borough development services manager Alex Strawn.
Bargabos said Scarsella Brothers Inc., the Seattle-based contractor on the $2.9 million job, thinks the roadwork will wrap up by Oct. 31 like it's supposed to, despite the work stoppage.
"They think the timeline is still going to be doable," Bargabos said. "But it did put 40 or 50 people out of work. Over a hundred-dollar permit."
So why did it take this long for the borough to discover the permit glitch?
Borough construction and planning officials said it's the contractor's responsibility to make sure subcontractors like B & E hold all the permits they should.
Nonetheless, the B & E situation is expected to change new road construction contracting procedures.
The borough is going to start requiring that contractors disclose companies providing material like gravel early in the bid process so officials can check their paperwork, capital projects director Mike Brown said.
"I kind of chalk it up as a lesson learned but ultimately it's on the pit owner and it's on the contractor who built their bid on those prices," Brown said.
Calls made to Scarsella co-owner Bob Scarsella and the company's Wasilla office were not returned.
The contract on the state-funded job calls for a 7,000-foot road to extend Machen to a signaled intersection at Church Road. It is meant to serve as a frontage road to access homes and businesses along the busy section of the Parks Highway that the state plans to change to a four-lane divided road.
The permit blunder surfaced publicly Tuesday night at the Mat-Su Assembly meeting. Officials with B & E unsuccessfully lobbied the Assembly for an immediate resolution to the problem through a variance.
"We've been at that location for 10 years selling sand gravel. It was my understanding we had a current permit. It has come to my attention we did not," Bargabos told the Assembly. "We'd like to be able to supply material to finish that job."
Borough staff have been directed to make the permit application a priority.
But planning staffers say the company should have known the paperwork was expired.
Borough planners in 2007 gave B & E a two-year administrative permit to extract gravel, Strawn said. The permit expired in 2009 and planners OK'd a one-year extension but the company never updated the permit after that though there was "plenty of communication back and forth," he said.
That kind of permit is the simplest of three options for gravel companies compared to a more stringent conditional-use permit process or the creation of an interim materials district, both of which grant approval for a much longer time period.
"So they were just operating without a permit," Strawn said. "Pretty simple."
B & E is also the center of a separate investigation into debris stored at its 200-acre site on Pittman Road, documents show. The borough issued an enforcement order to co-owners Bargabos and John Emmi in April. The borough claims the company has been operating a junkyard without the conditional-use permit needed to do so.
Pamela Ness, the compliance officer on that case, discovered the expired gravel permit last week during a site visit to make sure the company was complying with the order by either cleaning up or getting the permit, Strawn said.
As of Thursday, they had done neither, he said.
Bargabos said a company representative was supposed to submit a conditional-use permit soon. He said B & E does a lot of recycling, cleans out people's yards and has done some demolition over the years, "so we've got some construction debris."
He said Ness several years ago told his company that no permit was necessary. Ness didn't return calls for comment.
Reach Zaz Hollander at email@example.com or 257-4317.
By ZAZ HOLLANDER