Mayor Bronson backs off plan to pay contractor for unauthorized shelter construction after Anchorage Assembly threatens court action

The Anchorage Assembly on Wednesday took two new steps to block any potential settlement payments from the Bronson administration to a contractor over work done on a contentious homelessness project without formal approval.

Within a day, Mayor Dave Bronson said that as a result of those moves, he is “unable to pay the claim” to the firm.

The measures relate to Bronson’s proposed navigation center at Tudor and Elmore roads on the city’s east side, and the bungled procurement process that saw $4.9 million in construction work go forward without the requisite Assembly approval. In February, the Bronson administration told the Assembly that by March 24, it planned to pay Hickel Contracting, the firm that did the work, $2.5 million to settle the outstanding bill.

The Assembly said the move would be illegal, particularly given a measure it passed a few months earlier restricting the mayor’s ability to pay out settlements without getting its approval.

Wednesday night’s measures by the Assembly warned Bronson that should he try to transfer public money to Hickel Contracting, the Assembly would have asked the courts for an injunction to halt the payment.

The first measure, a laid-on-the-table item, authorized “the Assembly Counsel’s Office to initiate litigation, on behalf and in the name of the Anchorage Municipal Assembly, appropriate to prevent an unlawful disbursement of funds.”

That could have entailed Assembly leadership directing its legal counsel to pursue an injunction in court.

A companion resolution spelled out that there are no funds available for any potential settlement to Hickel.

“This is the meat of it, this is what says there’s no money for payment,” said Midtown Assembly member Meg Zaletel, one of the measure’s sponsors.

Members took up the items on Wednesday night in a continuation of the prior night’s regularly scheduled meeting.

Asked repeatedly by Assembly members about his intentions during the meetings, Bronson would not say whether he planned to follow through on the settlement payment by the Friday deadline.

But on Thursday afternoon, his office released a statement from the mayor saying his hands were tied.

“Based on the decision last night by the Assembly ... I am unable to pay the claim submitted by Roger Hickel Contracting, Inc for this project,” Bronson wrote. “I hope the Assembly will work with us to settle this dispute as quickly as possible.”

Assembly members have said they need to be part of discussions of any potential settlement with the construction company.

Wednesday’s meeting was acerbic, with several Assembly members ripping into the mayor and administration over what they said was a “shocking” lack of detail or analysis on the legal liability involved in transferring millions of dollars for unapproved work. In the process of questioning where the March 24 deadline came from, no one from the administration knew whether it stemmed from an invoice or a formal demand letter.

[New proposal for Anchorage homeless shelter site quickly turns into a political fight and stalls]

“I expect more analysis and depth of thinking when we are presented with an invoice. I would want to see a demand letter laying out why they think they should be paid,” Zaletel said. “This seems like very little rational basis for the purpose of cutting an over $2 million check.”

Assembly Vice Chair Christopher Constant said he has major concerns about separation of powers if work can be green-lit by the executive branch and public money disbursed without the legislative branch ever weighing in.

“(Then) whoever is the mayor gets to write checks to his friends,” Constant said. “We cannot allow the code to become dead letter.”

For his part, Bronson said the settlement is a legal issue.

“This is a bill we have to pay. I’m kind of agnostic on the whole thing myself. I worry about the credibility of the city,” Bronson said at the meeting. “We’ve been dealing with this for more than a month, and the lawyers are quite clear I’m obligated to pay this.”

The administration’s acting municipal attorney, Anne Helzer, who has been in the role for just four weeks, said Wednesday she had not yet had the “opportunity to review the historical side of things” on the proposed settlement.

“We’ve given notice that we’d like to pay the bill, and we don’t want to turn this into a political event, if at all possible,” Helzer said. “I wouldn’t want to see the city incur unnecessary legal fees.”

Both measures passed 9-2, with members Kevin Cross and Randy Sulte the lone votes against in both cases.

“It just kinda feels like it’s more, ‘How do we stick it to the mayor,’ ” Cross said of the resolutions. “I really wish we were focused on a solution. It feels like this is a step in the wrong direction.”

But the majority of other members did not share that view.

“Frankly, I think the credibility of the municipality is at stake if the law is not followed,” said Chair Suzanne LaFrance. “And the law says … that the Assembly must approve the settlement before any payment is made.”

An injunction was not a given: The measure created the mechanism for taking action in the courts, but would still need to be formally initiated by Assembly leadership. As of Thursday, no such injunction had been filed in court.