Ferry dilemma continues to stymie borough officials

PALMER — With the Mat-Su Borough’s ownership of the M/V Susitna ferry all but official, borough manager John Moosey sought direction from the assembly Thursday regarding what to do with the vessel.

Moosey began by telling assembly members about a letter he received from the Office of Naval Research, the organization that built the vessel as a military prototype.

“They have determined that they are no longer responsible for the boat and it is ours,” Moosey said.

All that remains to transfer ownership is for the borough to take title to the vessel, he said. As for what to do with the craft, he outlined four options:

Use it

The borough can’t use the vessel for its planned purpose — regular trips hauling cars and people between Point MacKenzie and Anchorage — because there aren’t landings on either side and constructing them is estimated to cost $30 million.

Still, the borough is pursuing permitting for a Ship Creek landing in Anchorage just in case.

Meanwhile, three proposals came in when the borough advertised seeking companies or organizations interested in using the ferry. All three proposals were good, Moosey said, but all entailed the borough paying to operate the vessel and splitting the revenues with someone else.

The U.S. Naval Underwater Warfare Center was interested in the vessel, but its proposal entailed the borough spending $2 million to build a cradle system for submarines the Navy would launch from the Susitna, plus a half-million to offset the Navy’s costs.

The Alaska Marine Highway System of ferries doesn’t want the vessel on a short-term basis, but might on a long-term basis, Moosey said.

Finally, Moosey said the U.S. Coast Guard “loves the boat, but they have no use for it.”

Store it

Moosey said a drydock in Seward quoted a price of $9,000 per month to store the M/V Susitna, but the one-of-a-kind vessel would require the Seward facility to build a special cradle to haul it out of the water, which the borough would have to finance.

He said Lew Madden, who helped design the Susitna and represented the borough when it came time to outfit it for civilian use, checked into an idea the borough assembly had floated to pull the vessel out of the water and store it on land at Point MacKenzie. Madden advised against the idea, Moosey said, because it would damage the vessel.

Surplus it

The federal government runs a program for surplus equipment. The borough could put the vessel into that program and a federal agency could potentially take it.

Sell it

It’s unclear what price the borough could get if it sold the Susitna. Moosey told the assembly that he has an appraisal, but would only call it an appraisal “for insurance purposes,” as it doesn’t reflect what the ship is actually worth on the market.

“If we go for sale, I think that will be the best way to find out what the vessel is worth,” Moosey said.

The ship is a dilemma for the borough because Mat-Su has taken in $12.5 million in Federal Transit Administration grants to build a ferry system. If it doesn’t start running a ferry, federal rules say the borough will likely have to pay that back.

Moosey said the surplus and sale options probably are the borough’s best chances of recouping the money it may owe the FTA.

Entertaining those options, Moosey said he needed to make clear to the assembly that either route would mean the borough would very likely not get federal money to set up a ferry system — with a different vessel — for a long while.

“I think the sale or the surplus option would make it very difficult to go to FTA for a ferry anytime soon,” he said.

The assembly directed Moosey to explore those options and report back.

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