Borough may accept a loss on ferry sale

PALMER — In its quest to marry off its star-crossed ferry to a suitable suitor, the Mat-Su Borough appears ready to settle.

“What I am planning to do is to put together what we feel we have — two solid offers to purchase the boat for less than $6 million, and I will bring that back to the assembly at the next regular meeting for confirmation,” borough manager John Moosey said at the end of Tuesday’s Mat-Su Borough Assembly meeting. “It will change our question from ‘can we ever sell the boat’ to ‘OK, how do we mitigate our obligation to (the Federal Transit Authority) and so it changes from a market issue to more of a political and legislative issue’ then I think, there is a possibility that we can be successful.”

The obligation he referred to was $6 million in grant funding the borough would be liable to repay the FTA if it didn’t, as promised, set up a ferry service with the twin-hulled military prototype M/V Susitna. That obligation was once $20 million, but the borough, through negotiating with FTA, has managed to reduce the obligation substantially.

The ferry had at one point been envisioned as a transportation link between Point MacKenzie and Anchorage, making regular runs across the 2-mile stretch of water between the two ports. Anchorage, however, was a less-than-willing partner and the borough never secured a landing on the Anchorage side. Meanwhile, money to build a landing on the Mat-Su side was frozen when it became clear an Anchorage landing wasn’t materializing. Now the borough is on the hook for regular $65,200 monthly payments to keep the vessel docked and secured, the latest of which was actually approved at the same meeting in which Moosey spoke.

Now, Moosey said, when he talks to the FTA the advice he had gotten is to take the solid offer he has on hand for less than $6 million and then go to Washington, D.C., and see what he can get in the way of forgiveness for the balance.

He started the meeting saying he didn’t want that much uncertainty in a deal like this, but Assemblyman Steve Colligan argued otherwise.

“I think we’ve done more than our fair share, in my opinion, of trying to mitigate the costs and expense and liability that we have,” he said.

That should go a long way to proving to the FTA that the borough was acting in good faith and simply couldn’t make the ferry idea work, Colligan said.

“It was a bad idea to start with, it wasn’t the ship we ordered,” he said.

The assembly didn’t disagree with Colligan, and directed Moosey to bring those offers back to the table at the Aug. 6 meeting.

“Also be prepared and send us early, if possible, what is the insurance premium due at the end of August,” Colligan told the manager. “I would like to have this thing sold or liquidated or whatever before that insurance premium comes due.”

Contact Andrew Wellner at 352-2270 or andrew.wellner@frontiersman.com.