The assembly has approved a $1.285 million contract with an engineering firm to start on the environmental and design homework required for what could be a $30 million rebuild of the Inner Harbor, Reliance Harbor and Standard Oil Floats.

Borough Manager Mason Villarma called it “by far the most important and consequential new business item tonight,” in introducing the agenda item at the Sept. 22 assembly meeting.

The borough was awarded a $25 million federal grant in 2024 for the downtown harbor rebuild and applied last month for a $5 million state grant to supplement the federal aid to fully cover the expected costs.

The environmental and engineering work contract is with PND Engineers, an Alaska firm that has done multiple projects in Wrangell over the years. The company is expected to complete the work by the end of next May, according to information presented to the assembly by Capital Projects Director Amber Al-Haddad.

The construction project, which needs to be under contract by 2028 for the federal grant deadline, will include new floats, new pilings and new water, firefighting, electrical and lighting utilities at each of the three harbors.

PND was the top-ranked of four engineering firms that submitted proposals to the borough this summer.

The company’s overall proposal totaled about $2.5 million, which would take the design work to 95% completion and a near-final set of construction documents. The borough, however, is starting with a smaller contract covering the environmental homework required for permitting and preliminary design.

The early design and permitting work is eligible for federal reimbursement under the 2024 grant. The borough will have to advance the money, submit its expenses for review and repayment after the work is done and the federal Maritime Administration obligates the money for the Wrangell project.

The initial $1.25 million contract with PND is “strictly limited to professional engineering and environmental services required to move the project through the federal regulatory process,” as required for the federal agency to obligate the full grant, Al-Haddad reported to the assembly.

The borough would need to go through the same reimbursement process when it proceeds with the more than $1 million additional for final design and bid-ready construction plans. The money to pay for the work until the federal reimbursement comes through will come out of the port and harbors reserve fund.

The borough wants to dredge the harbors before installing new floats and pilings, but dredging was not part of the $25 million federal grant. City Hall has been talking with the U.S. Army Corps of Engineers and Alaska’s congressional delegation in hopes of winning an appropriation for the Army Corps to take on the assignment.

Borough officials have been clear in past statements that dredging should occur before installing new floats and pilings.

If the Army Corps and Congress don’t come through before the harbor rebuild project, “I think the fallback position — and we’ve kind of been unwavering on this — is that we’re going to take care of the minimal dredging that we need to do in-house through our own contractor,” Villarma told the assembly Sept. 22.

The borough could do “just enough to be able to get the Inner Harbor dredged and a couple points at Reliance that need to be dredged,” he said. “Beyond that, we’ll remove the floats and do additional dredging down the line if the Corps comes through.”

A lot of silt flows into the harbor from the creek at the back of the basin, Harbormaster Steve Miller explained last winter.

“The Inner Harbor is actually the worst where that creek comes out,” he said. “The entire area needs to be dredged. … All of it is bad.”

He said the last full dredging of the basin was in the 1970s, though the borough did some “spot dredging” under the Inner Harbor floats in 2005.

Reliance also is a problem, Miller said. “Anytime there is a negative tide” it goes dry and the dock can sit down in the mud.