Daily Sitka Sentinel

Assembly Rejects All Haulout Bids

By SHANNON HAUGLAND
Sentinel Staff Writer

Following City Administrator John Leach’s recommendation the Assembly voted Tuesday night to reject all bids received for a boat haulout at the Gary Paxton Industrial Park.

The vote at the special meeting was 5-0 in favor of rejecting the bids.

The city had been negotiating with Sitka Industrial Marine Shipyard LLC – formerly WC Enterprises – to hammer out a proposal for building a new haulout facility to serve the fishing fleet once Halibut Point Marine closes its haulout facility in the spring of 2021.

In the course of negotiations, SIMS changed the terms of its offer,  including funding and the design of the haulout itself.

Leach said the company’s new funding proposal and the requirement for city infrastructure marked a major change from the original proposal.

“I believe, and the municipal attorney concurs, that although SIMS’ shift from the ramp to pier style haulout was not a substantial shift in the proposal, the new funding design and city infrastructure requirement is,” Leach wrote in his memo.

Leach recommended that the Assembly reject all bids submitted, and issue a new request for proposals “with more structured requirements” after the city learns whether it will receive a federal BUILD grant for the project.

Leach added that the prospect of the city’s receiving a BUILD grant “muddied the waters” around previous negotiations.

The meeting was attended by Assembly members Richard Wein, Kevin Knox, Valorie Nelson, Thor Christianson and Mayor Gary Paxton. Keven Mosher and Steven Eisenbeisz were absent. (Knox and Nelson attended by videoconference and teleconference.)

Two companies submitted proposals for a haulout, and SIMS received the highest score by the city selection committee. The Assembly directed city staff and GPIP Director Garry White  to negotiate with the company on the details.

“What has changed since then is grant money – although still not certain – was not a player in this game,” Leach said. “And that somewhat complicated the entire process, knowing that there’s a potential for grant money to be invested versus a private investment.”

At the time the RFP was issued, the city and bidders had not known about the possibility of receiving a BUILD grant. The city has since applied for a $8.2 million grant from the federal program, and hopes to get the final word on September 15.

Leach said in the memo: “If (SIMS’ bid) now relies on the outcome of a BUILD grant, and they shifted from a $1.5 million loan request to a city infrastructure requirement (financial investment), SIMS has gone outside the scope of their original bid.”

The GPIP board at its June 22 meeting recommended approval of the SIMS offer, contingent on a legal review.

“The thing that was apparent was, when these bids were originally scored the financial investment of the private organization was one of the scoring criteria,” Leach said. “Since that changed, we have changed the scoring criteria, which goes outside the confines of their original bid.”

Speaking in favor of Leach’s recommendation, Christianson said the possibility of the grant money represents a “huge change,” for the haulout proposals. He said in this case, he is concerned about the process.

“If it’s starting to make me uncomfortable, someone who is more process-oriented would be very uncomfortable,” he said. “The grant uncertainty is a reason to slow down... My only real hesitation is if we don’t get the grant we run the risk of not having anything out there.”

Nelson agreed.

“I think with the changed situations, we would be better to issue another RFP when we know what the grant situation is,” she said. “I’m concerned that legally we may be getting ourselves into a bit of a jam.”

Wein called it a situation of “back to the future.” He said he’s been in favor of the city’s taking the lead on the project since the start.

“I always felt if we get process started and while we are moving forward, begin to draw people in, with their ideas, keeping it an open, transparent process, and develop it in that way, I always felt that was probably the best way towards success,” he said.

He recommended starting a new bid process, with or without the BUILD grant.

Dan Cooper, representing SIMS, asked the Assembly to vote against the administrator’s recommendation, and allow the company to continue working out the financial details with the city.

He said throughout the process he checked in regularly to make sure the SIMS plan was within the RFP. 

“We were assured it was acceptable up to and including the point of the GPIP meeting,” Cooper said, noting the board gave the plan unanimous approval to move forward. He said he was not aware of the areas falling outside the RFP requirements, and asked for more time to correct the terms, instead of rejecting the proposal.

“We have no desire to move forward with the terms if they are outside the RFP guidelines,” Cooper said. “We want to get this right, that’s the bottom line.”

Local shipwright Michael Nurco urged the Assembly to move the process forward “without the recent replies to the RFP.”

“I would like it to be an inclusive process,” he said. He recommended a “set ground plan for what the boatyard needs. ... We have a lot of information out there that’s gathered toward that end.”

There was some discussion of the timeline pressure, with the impending closure of the HPM facility. While some favored a more measured approach to moving ahead, others said the sooner “something” is in place, the better.

Baker Hensley, who submitted the other proposal for Sitka Sound Industrial, asked the city to reject the proposals and issue a “request for information.”

“You’ve got a short timeframe to start hauling boats out again once Halibut Point Marine closes down,” he said. Noting the one-year timeframe the city has to build a new haulout before HPM shuts down, “That gives you a good window - almost a year - to actually have something in place.”

Hensley encouraged the city to collect the best information available in designing a boatyard. That includes recommendations from a user group committee that will know what the boatyard needs.

Amy Underhill, from the seining business Underhill Marine, stressed the need for Sitka to have a boatyard and talked about the amount of work that went into the request for proposals.

“I think it’s very important to get what goes into another RFP right this next time,” she said.

In closing, Leach said he had been reviewing earlier discussions, from some seven years ago, when work toward building a new haulout facility came to nothing. He said he’s seeing some of the same issues that were brought up before.

“I’m hoping that wherever we go with this one we don’t do a repeat of 2013-2014 and we move forward with something,” he said.

“We’ll solve the problem,” said Mayor Paxton.

About a dozen members of the public attended the meeting in Harrigan Centennial Hall. Over the past week an email chain started by Jeremy Serka objecting to what he saw as the privatization of public property under the SIMS proposal drew support from a range of local fishermen and marine businesses, all calling for the Assembly to reject the proposal.

In other business at the special meeting, the Assembly appointed Wein to the University of Alaska Southeast Sitka Campus Advisory Council. Council president Garry White said earlier that an Assembly member would be a welcome addition to the council, particularly in light of conversations under way that could lead to the elimination of one or more of the UAS campuses.

Wein talked about the importance of UAS-Sitka to the community, and volunteered to serve. The motion to appoint Wein passed 5-0.