Alaska News

Mat-Su Assembly weighs nearly $900K repair for beleaguered ferry

Officials say the Matanuska-Susitna Borough needs to pay for nearly $900,000 in repairs to the never-used ferry M/V Susitna before the borough's insurance company will cover the costs.

To that end, the Assembly on Thursday voted unanimously -- with member Matthew Beck absent -- to forward the ferry repair funding ordinance for introduction at the next meeting on Dec. 1.

The Susitna, which was supposed to carry passengers and cars across Knik Arm from Point MacKenzie to Anchorage, foundered on short money and political will. It's been moored since 2011 in Ward Cove near the Ketchikan shipyard where it was built, costing millions in storage and matching grant money.The federal government has also demanded the borough return $12.3 million in grant funds spent on the ferry, which never fulfilled its public purpose; borough officials and the Federal Transit Administration continue to negotiate.

Heavy rains earlier this year damaged three of the ferry's four engines, and officials estimate repairs at about $1 million.

The borough in September agreed to sell the ferry to the Philippine Red Cross for $1.75 million, including an initial $250,000 deposit to cover the insurance co-pay on ferry repairs. The borough agreed to make the repairs.

The Assembly ordinance passed Thursday appropriates $870,000 from a reserve fund. The money would go toward engine repairs necessitated by the damage the ferry sustained early this year during rainy weather in Ward Cove. The ordinance also puts the money back into the general fund reserve pool once the borough's insurance company pays them back.

The company, Lloyd's of London, is requiring the borough to submit expenses for reimbursement as opposed to paying them up front, Borough Manager John Moosey said Thursday morning. The company wants to make sure the insurance money goes only to damage repairs and has agreed to pay up to $1.1 million.

If the Assembly ultimately approves the repair funding on Dec. 1, parts can be ordered and shipped for repair work estimated to take several months, Moosey said. Once the repairs are done, the borough can bill Lloyd's of London.

The Assembly "approved the sale based on the repair and it's just some extra steps," he said. "Everything about this boat is complicated and, I guess, why would this be any different?"

Zaz Hollander

Longtime ADN reporter Zaz Hollander is based in the Mat-Su and is currently focused on coverage of the coronavirus in Alaska. She also covers the Mat-Su region, aviation and general assignments. Contact her at zhollander@adn.com.

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