A superior court judge has ruled against a former mayor of Sitka who was suing the city over the construction of a dock, and who wanted to hold the city’s administrator and current mayor financially responsible.
Judge Trevor Stephens issued a 69-page ruling on Monday (1-9-17).
The decision averts a trial scheduled in July of this year.
Judge Stephens denied a motion for summary judgement by Marko Dapcevich, who argued that the City of Sitka failed to comply with its own charter when it awarded a design-build contract for a new dock to Turnagain Marine Construction.
Although Turnagain was not the “lowest qualified bidder” under language spelled out in the city’s 46-year-old municipal charter, the company’s proposal was determined to be the “best value” for the available funding, under language subsequently added to municipal code to give government more flexibility in procuring large projects.
The dock is a 250-foot floating barge at the city’s industrial park. The $6.8 million project was completed in December.
Dapcevich sued in March, 2017, after an extended struggle with the city over correspondence involving the dock. Dapcevich had filed a public records request for emails between the administration and assembly members regarding the project. The city responded with some materials — like the contract documents — but withheld many others on the grounds that they were protected by attorney-client privilege.
Dapcevich’s lawsuit was followed by a settlement offer, which called for the city to cancel the contract with Turnagain, and for then-city administrator Mark Gorman resign.
When the city rejected the offer, Dapcevich amended his suit to include Mayor Matt Hunter and Gorman by name, and to hold them personally liable for the difference between Turnagain’s proposal and one submitted by Pacific Pile & Marine, the nominal low bid — but the second “best value.”
Both Dapcevich, represented by Juneau attorney Joe Geldhof, and the City of Sitka, represented by Anchorage attorney Michael Gatti, made oral arguments in the case in December before Judge Stephens, who appeared over the phone from the bench in Ketchikan.
Regarding whether the city violated the “low-bidder” provision of the municipal charter, Judge Stephens writes that the Alaska Supreme Court has “rejected a mechanical application” of plain meaning in favor of a “sliding scale.” So the intent of statutes written with “competitive bidding” and “qualified low bidder” is an important consideration. Stephens agreed that the alternative procurement process defined in municipal code was both “reasonable” and “practical” as applied to the new dock. He writes “The Charter does not expressly require or prohibit the use of any particular ‘competitive bidding’ process.”
Regarding whether Hunter and Gorman could be held personally liable, Judge Stephens ruled that the two city officials were entitled to “qualified official immunity,” because both were acting with discretion in their capacity as local officials, neither individually had the power to stop the project, and any legal prohibitions around the use of a design-build procurement process had not been “clearly established.”
The parties now have opened negotiations on additional matters, like whether the city may ask Dapcevich to pay its legal fees. For that reason municipal attorney Brian Hanson declined to say how much Sitka has spent to defend the case.
Nevertheless, Hanson did say, “We’re very happy about the decision. It rules in our favor in all respects. We always felt that we properly contracted for the dock in accordance with the code and the charter.”
Dapcevich’s attorney Joe Geldhof says his client is disappointed. “It could have gone either way,” he says. “Mr. Dapcevich wanted his day in court and he got it. He still believes that the charter requires competitive bidding. He thinks the right thing to do here would be to amend the charter to allow best-value bidding.”
Marko Dapcevich served two terms as Sitka’s mayor, from 2004 to 2008. He now divides his time between homes in Arizona and in Alaska.