Heavy rains damage mothballed Mat-Su ferry's engines

PALMER -- The Matanuska-Susitna Borough's high-tech but never-used passenger ferry suffered serious engine damage during heavy rains in Southeast Alaska earlier this year and will need repairs before it runs again.

Three of the ferry's four engines don't work, borough officials say.

The repairs should come in at "less than $1 million," Borough Manager John Moosey said Thursday. The ferry is insured, but the policy comes with a $250,000 deductible.

So paying for repairs could be a tall order for the already cash-strapped borough as it wrangles with a difficult budget for the upcoming fiscal year, which starts July 1. Budget talks this month revealed a proposed property tax hike amid an $11.9 million deficit and uncertain state contributions.

"This is just not a simple 'let's get it fixed' issue," Moosey said Thursday of the ferry.

Borough administrators did not publicly announce the ferry's status but confirmed it this week after being contacted by Alaska Dispatch News.

The 195-foot M/V Susitna, originally billed as the world's only ice-breaking catamaran, was designed as a half-size prototype of a U.S. Navy double-hulled beach landing craft. Refitted as a ferry in Ketchikan, the Susitna is capable of holding up to 129 passengers and 20 vehicles.

But it's been berthed in Ketchikan's Ward Cove ever since the borough took ownership in 2011. And now the vessel doesn't even run.

Heavy rains that hit Southeast in February flowed down the smokestacks and into the exhaust manifold and to the engine cylinders, according to borough port director Marc Van Dongen.

Crews discovered the water-damaged engines a few weeks later during a monthly check, Van Dongen said.

"When they went to start the engines they wouldn't start," he said. "Only one of four started."

The borough brought in a factory-certified representative from the company that made the engines, the port director said; the insurance company that covers the ferry sent an adjuster.

The discovery of major engine problems is the latest in a long run of bad news for the star-crossed ferry.

The Susitna never made it into passenger service between Anchorage and Port MacKenzie as intended after funding -- and political support for an Anchorage landing -- dried up. The borough has failed to find a buyer or even another government entity to take it away for free, though officials say there continues to be interest in the ferry. Last year, the Federal Transit Administration demanded the borough pay back $12.3 million in grants.

While the borough got the Susitna for free from the Navy, costs are mounting. Ward Cove costs added up to $1.2 million as of October 2013, though the Assembly later cut back on maintenance to lower monthly charges to just under $30,000. The borough expects to spend $709,000 on the ferry through June and projects spending another $527,000 in the next fiscal year -- not counting repair costs.

Moosey said the borough is currently in negotiations with the insurance company. He doesn't plan to bring any ferry repair request to the borough Assembly until after they approve a budget.

He may meet with resistance. One Assembly member, Vern Halter, has already asked for an analysis of scrapping the ferry. Another, Ron Arvin, has historically voted against even paying the monthly fees to store the Susitna at Ward Cove.

For now, Van Dongen said, there are "old Alaska tarps" atop the stacks to keep out water.

He's got four potentially interested parties that want to check out the ferry, he said. "But if you can't even start the engine, we can't even show it to them."