Former Haines mayor says he did not authorize controversial $10 million steel purchase

Someone made a $10 million mistake purchasing steel for a critical port project in Haines. The dispute over who is responsible for the bill — Haines taxpayers or the construction contractor — has now been going on for almost a year and continues to delay the project.

For nearly a year, the city had been in a $10 million dispute with Turnagain Marine Construction; The company signed a contract to renovate Lutak Wharf for $25 million. Money for the project comes from a grant from the U.S. Department of Transportation – Maritime Administration, or MARAD. To meet grant requirements, purchases must comply with federal guidelines and receive prior MARAD approval.

Turnagain purchased approximately $10 million worth of steel pipe for the project in spring 2023. MARAD determined that steel was not eligible for grant repayment.

Last December, Haines Mayor Tom Morphet said the council was surprised to learn Turnagain had already purchased the steel. Haines claims that Turnagain has not yet been granted permission. come back again He said the pipe purchase was included in a program the county approved “upon the effective date of the Phase Two Amendment on March 1, 2023.”

The dispute is heading toward mediation between county staff and Turnagain. However, this issue was brought up at the Port and Harbor Advisory Committee meeting on October 31.

The purpose of the meeting was, in part, to allow council members to ask questions about the pier design. Councilman Craig Loomis had questions about who authorized the purchase of steel.

Harbor and Harbor committee member Don Turner Jr. said in February 2023, then-Mayor Douglas Olerud recommended Turnagain seek a permit after the city signed the contract to begin the second phase.

“And Mayor Olerud told them when they signed, we signed this contract so you can buy the steel before the prices go up,” Turner said.

“I did not give written or verbal instructions to Turnagain to purchase the steel for Lutak Wharf,” Olerud responded in an interview with KHNS.

Olerud said that as mayor he did not have the unilateral authority to grant such permission. He explained the content of the statement that the Liman member focused on.

“I think the comment that Mr. Turner is referring to is a meeting that took place on February 23, 2020, at a council meeting where we were discussing a resolution that would allow moving forward to the second phase of the port contract,” Olerud said. “And moving to phase two would allow Turnagain to purchase this steel after getting pre-approval from MARAD. And so they still needed MARAD’s pre-approval before they could proceed.”

Olerud was not at the Port and Harbor meeting and said anyone with concerns should speak to him directly.

Port and Harbor committee member Shawn Bell redirected the Lutak Wharf discussion.

“I don’t know if this private conversation is doing anything right now,” he said. “…I don’t see any use in discussing what happened.”

Port and Harbor Advisory Committee Chairman Jake Eckhardt said it was not his committee’s responsibility to resolve the steel issue. The committee continues to support the design of an encapsulated pier.

“I’m not sure how much I want to spend to unravel the complex web that has emerged after this incident,” Eckhardt said. “This is me personally… Let the weavers sort out that tangled web.”

Morphet said mediation was the next step. There is no date planned so far.

Lutak Pier was built by the US Army in 1953. Today it is Haines’ main loading point for fuel and freight. The grant for the reconstruction of the dock was approved in 2021. Lutak Dock has become a political hotspot, with some citizens concerned that it could eventually be used to transport ore.