Mat-Su snowplow contractors asked for millions in extra costs after last winter’s heavy snow. Some still haven’t been paid.

PALMER — Most of the contractors in charge of neighborhood snow removal in Mat-Su are in an ongoing dispute with borough officials over unpaid bills from last winter that threatens to extend into this plowing season.

The extra invoices total $7.1 million and reflect the time it took to clear snow pushed into roads from private properties by five of the Matanuska-Susitna Borough’s six road maintenance contractors after near-record snowfall in the region, borough officals say.

Mat-Su, an area the size of West Virginia, uses private contractors to perform road maintenance in summer and snow plowing in winter across 16 Road Service Areas where residents pay additional property taxes to fund those services.

The combined bill of the extra plowing costs is just shy of the $7.2 million total annual value of the contracts and more than 30 times higher than the overage bill for the previous winter of 2021-22, according to Borough Manager Mike Brown.

Rather than pay the overage bills, the borough has offered all six contractors a 20% cost-of-living adjustment on their contract values backdated to Jan. 1, with a requirement that they agree to file no overage bills for clearing private property snow during the upcoming winter season, multiple contractors said in interviews.

Borough officials declined to discuss the terms of the offer, citing attorney-client privilege.

Several contractors said accepting the offer could put them out of business or force them to make staffing cuts.

“It’s a death sentence if I go into this winter holding these contracts,” said Brian Ficklin, whose Big Lake company Ficklin Construction holds four of the area’s 16 road contracts and submitted a $1.3 million overage invoice, which he said accounts for both overhead and profit for the extra work. “It’s also a death sentence if I don’t reclaim my losses. What am I to do?”

Private snow, public problems

At issue in Mat-Su is a problem known among plow operators and borough officials as “homeowner snow.”

According to borough code, property owners are barred from pushing snow from their yards into the public rights-of-way. But the rule, which carries a $150 fine for the first offense, is rarely enforced. Contractors must clear the additional snow in the road regardless of how it gets there or stand in violation of their contracts. Moving snow into the right of way is also illegal in Anchorage, where it carries fines that start at $300.

The 2022-23 snow season brought a parade of problems across Southcentral. In Anchorage, municipal and state plow crews struggled to clear clogged streets after a series of December storms, burying neighborhoods in several feet of heavy, dense snow and closing schools for four days. A woman died in the February roof collapse of the Turnagain CrossFit gym. As the winter wore on, at least 16 roofs in Anchorage plus the roof on the Palmer Public Library buckled under the weight of snow and ice.

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In Mat-Su, many homeowners overwhelmed by drifts pushed driveway snow into public roads where it could be moved by road maintenance crews. One contractor estimated as many as three quarters of the homeowners in his contract areas put their snow in the road over the winter, while another logged more than 300 infractions in a single week.

The borough’s road service area contracts didn’t leave room for the kind of extra costs incurred last winter.

The amount contractors are paid is based on various factors including anticipated snowfall — which varies across the borough — and the size of the service area. All of the current contracts expire by the end of June 2025, with several expiring in June 2024, borough officials said.

For decades, borough public works officials solved the homeowner snow issue by permitting contractors to bill the borough for that extra work, a move not explicitly allowed by contract. But a new set of top officials at the borough’s public works department said they read the agreements differently than their predecessors, choosing to instead require the current contractors to absorb the costs.

The contract “is very ambiguous,” said public works director Tom Adams, who took over the role June 2022. “This contract speaks nothing to additional payment for any work.”

‘We cannot carry that burden’

Several of the contractors involved in the dispute say accepting the borough’s offer and explicit ban against future homeowner snow overage billing doesn’t scratch the surface on their bills from last season and leaves them in the hole going into the new year.

Ficklin, for one, said the offer would only pay $100,000 toward his $1.3 million invoice, plus an additional $150,000 annually towards his contracts.

Todd Minnick’s Wasilla company, Big Dipper Construction, holds three road service contracts spanning 288 miles with entrances from about 10,000 driveways. Minnick this month said going into the new season unpaid for that past work with no remedy for future costs puts him in an “impossible” position. His overage bill to the borough totaled about $2.9 million.

His team documented more than 110,000 incidents of homeowners dumping snow in the right-of-way over last season, he said. That calculates out to an overage “charge” of about $23.45 per homeowner infraction, plus about $60 per cul-de-sac requiring extra work, which he said is also outside what scope of the contracts.

Had borough officials enforced their no-dumping rule for property owners after the first offense and levied the $150 fine during one of the season’s about 25 snow events, Minnick estimates they would have brought in at least $663,000 in just his three contract areas.

”We are covered to do the work inside of our contract, to plow the roads based on how we’re doing it,” he said. “It’s the snow that gets placed in the right-of-way by others — we cannot carry that burden.”

David Spain, whose company Spain Excavating holds one road service contract in Trapper Creek, said he billed the borough $140,000 in overages. Their offer gives him $56,000. Spain said if he accepts the offer he will have to cut staff to keep his doors open, and instead do almost all of the work himself.

For now, Spain, Ficklin and Minnick said they are working with a lawyer on next steps.

Bill Sterns, who operates D&S Road Services and holds two road service contracts, accepted the borough’s offer. He said the offer was close to his $200,000 overage bill and fighting it didn’t justify the cost of a lawyer.

Officials with Northern Asphalt Construction, which holds two contracts, did not answer calls for comment. Officials with McKenna Brothers Paving, which holds the remaining four contracts, did not respond for a request for an interview.

Cracking down on snow scofflaws

The contractors are without apparent remedy for forcing the borough’s hand. Earlier this year, in a closed-door meeting with borough officials, several offered to give back their contracts so they could be re-bid under the borough’s new interpretation, Ficklin said. That idea was abandoned when the borough threatened to pursue legal action and go after the contractor’s bonds, he said.

Borough officials confirmed this week that handing the contracts back would would trigger bigger problems for the contractors.

“There are steps to be taken on that, that we would deal with,” Adams said. “Obviously, when you when you fail to perform on a wholesale contract level there’s bonding issues.”

Ideally, any time contractors realize that aspects of a job may fall outside the terms of their contract, they should get pre-approval from their borough-assigned road service superintendent, he said. Such work can be approved and billed later to the borough.

“We don’t anticipate that we allow them to just collect charges, and then submit an invoice at the back end of the season,” he said. “If there’s valid claims for additional compensation, we want to be able to deal with that in a timely manner.”

In the past, with less snow and different people in charge at public works, that’s what happened, said Spain. If he encountered a problem, he called his road service superintendent to document it, regardless of time or day of the week.

“It was no issue — the borough superintendents had no issue with going to bat for you for getting extra money for this,” he said.

But when the person in that role changed out in January, Spain said he found calls often went unanswered, leaving him to make a decision on the work in the moment.

Adams said because staff charges the borough overtime for off-hours calls, he’s worked to curtail it — and some of it might have gone too far.

“There’s never a time that we told them we could respond to their duties as a superintendent,” he said. “But I think some of them probably took the conversation and maybe leveraged it a little bit and chose not to answer some of those calls.”

Borough officials said they are working to roll out a problem reporter that can be used by contractors and members of the public to document road issues in real time, including homeowner snow scofflaws.

In the meantime, they say, officials plan to add urgency to messages about driveway clearing this winter.

With wet El Nino weather — and with it, the potential for heavy snow — expected to continue into this coming winter, borough residents will need to change their snow-clearing behavior this year or face penalties, said Brown, the borough manager. The borough plans to launch an education campaign alerting homeowners to the rule against pushing snow into roads, possibly followed by fines in hopes of curtailing the problem this coming winter.

“From an enforcement perspective, our take has been we should start educating and informing before we start issuing warnings and citations,” he said. “That takes time.”

Adams said that road service area contracts coming into effect as the current ones expire starting next summer will be changed to address the need for this type of extra work before it becomes a problem for the borough and the contractors.

“It needs to be fair to both sides,” he said.