City Of Unalaska Agrees To Pay $1.8 Million In Settlement With Alaska Contractor

Feb 27, 2020


The City of Unalaska will pay Alaska Mechanical Inc. (AMI) nearly $1,882,500 in a settlement that was accepted unanimously by the City Council on Feb. 25. The city has 30 days to pay.
Credit Chrissy Roes/KUCB

Tuesday was a particularly litigious evening for the Unalaska City Council, with councilors voting on two ongoing legal matters.

The first stemmed from a 2013 project, in which Alaska Mechanical Inc. (AMI) was hired to upgrade Unalaska's wastewater treatment plant. Part of those upgrades included removing rock from the plant site.


According to city officials, the company "over-blasted," which resulted in construction delays and ballooning costs.


Both the city and AMI sued each other. Unalaska claimed $2,025,000 in damages, while AMI claimed the city owed $4,758,992.66. Late last year, they both agreed to a settlement: Unalaska will pay AMI nearly $1,882,500.


City Attorney Brooks Chandler said the settlement makes sense.


"I'm not going to say this is some fantastic deal," said Chandler. "I'm not going to say we're pulling the wool over AMI's eyes. It really is a classic compromise. Nobody's going to be particularly happy."


The council accepted the settlement unanimously. The city has 30 days to pay.


Meanwhile, councilors voted to bring a new lawsuit against American International Group (AIG) — the company that insures Unalaska's government against crime. Last summer, when the city fell victim to fraud, it turned to AIG.


Unalaska recovered most of the money it lost, but the city was still out $637,861.67. AIG reimbursed $100,000, and argued the rest wasn't covered under the city's policy. Chandler disagreed, and recommended Unalaska sue for the rest.


Councilors voted unanimously to proceed with the suit.