Mat-Su Borough officials hope to trim $12.3M ferry bill

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ANCHORAGE, Alaska — The Matanuska-Susitna Borough will likely avoid paying back all of the $12.3 million it owes the federal government, manager John Moosey said of a bill that stems from a failed attempt to start Knik Arm ferry service.

Moosey said borough leadership is putting a plan together that will hopefully convince the Federal Transit Administration to change its view on how the grant money should be handled. That plan should be sent to Washington, D.C., for consideration by late November, he said, as part of a revised schedule agreed to by the agency and the local government.

"(A resolution) is probably going to take a couple months to hammer through, but I'm pretty sure we're going to be successful," Moosey said. "By successful I do not mean the whole thing goes away, but certainly not as onerous as the whole $12.3 million."

He added that the borough has worked extensively with the FTA Region 10 office in Seattle and that the feds understand how exhaustive the search for a resolution has been.

Borough officials have hinted that some sort of payment plan on a lesser amount could be a probable outcome.

In August, acting FTA Administrator Therese McMillan wrote a letter to Moosey ordering the borough to repay the $12.3 million spent of $21.2 million in federal grants allocated to developing ferry service between Port MacKenzie and Anchorage. The agency is open to working with the borough to resolve the issue, McMillan wrote, a sentiment that seems to have held true.

At the time the borough had 30 days to repay the debt before it became delinquent and began accruing interest, a statutory requirement that has been withdrawn, according to Moosey.

The $21.2 million was awarded in three chunks from 2002 to 2009. Of the money the borough spent on the project, $3.6 million was on a passenger terminal at Port MacKenzie and other funds were used to help pay for construction and outfitting of the 195-foot M/V Susitna, which was turned over to the borough shortly after construction.

The U.S. Navy footed most of the $78 million bill for the Susitna, a prototype catamaran-style landing craft built in Ketchikan.

The whole plan fell apart when the borough was unable to get the remaining $40 million needed to complete the ferry landings.

For more than a year the borough has tried to sell and even give away the Susitna with no luck. If another government would take the Susitna, the borough would likely be off the hook for at least some of the grant money.

The vessel's one-of-a-kind design provides it unparalleled capabilities but also makes finding it a new home difficult, Moosey said. It docks differently than traditional ferries and has a limited payload that does not meet most industry needs.

The Susitna can carry 110 people, cargo and land on a beach in as little as four feet of water.

When describing the vessel, Moosey said, "The only thing I can equate it to —Grandma's at home and she's got to go to church and to go buy groceries and the only thing she's got is a Ferrari and she can hardly afford the insurance and the cost to operate it."

It is currently docked at Ward Cove outside of Ketchikan at a cost of about $30,000 per month when insurance, maintenance and other fees are added up, he said.

Moosey noted that everyone involved has "gone out of their way" to help the borough minimize costs associated with the Susitna.

In the end, the FTA understands the borough's situation but must follow through on its requirements, Moosey said.

"They just want it resolved in a timely manner and so do we," he said. "My assembly wants this resolved and they've been saying that for six months."


Information from: (Anchorage) Alaska Journal of Commerce, http://www.alaskajournal.com

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