Ferry’s fate remains in doubt

PALMER — The Mat-Su Borough Assembly still isn’t 100 percent sure what will happen after the M/V Susitna arrives in Seattle this week.

Assembly members voted 3-3 to postpone discussion on the borough’s burdensome boat until at least March 1 to obtain a written agreement prior to spending millions to fix the ferry on a motion from Assemblyman Steve Colligan. Borough mayor Vern Halter cast the first tie-breaking vote of his mayoral administration to continue the public hearing.

Colligan, joined by assemblymen George McKee and Matthew Beck voted in favor of the extension. Assemblymen Dan Mayfield, Jim Sykes and Randall Kowalke voted against the extension. Assemblywoman Barbara Doty was absent.

Borough manager John Moosey told borough assembly members the borough has obtained a verbal agreement with the boat’s buyer, the Philippine Red Cross, to extend delivery of the vessel beyond a planned March 31 delivery deadline — a deadline now deemed unfeasible given the extent of repairs required to fix the ferry’s engines. Officials had pushed to obtain a written agreement in the form of a contract amendment that would have allowed them an extra 90 days beyond that deadline with a possible extension of 45 days beyond that in the event of circumstances beyond the borough’s control. Officials now expect repairs to be completed by May 22, according to Moosey.

The vessel was slated to arrive in a Seattle shipyard no later than Thursday, according to port director Marc Van Dongen.

Borough officials were told the Red Cross’s board of directors still must meet to vote to approve a full-blown contract amendment. In the interest of speeding the process up, Moosey said borough officials next sought a letter, a less expansive measure that could be signed by an executive with the Philippine organization without a full vote, only to be told by their maritime lawyer that the letter would also need to be approved by a vote. The letter did not include the second 45-day allowance officials had sought, according to Moosey and borough attorney Nick Spiropoulos.

“Tonight, I want to reiterate, we do not have a signed agreement,” Moosey said.

The reasons behind the update were unclear, not least of all because Spiropoulos — designated the borough’s point man by a unanimous resolution passed Feb. 10 — wasn’t present for the conference call discussing both agreements. At one point, Halter asked for borough staff to provide a copy of the document the Phillipine Red Cross is expected to vote on.

“Mr. Mayor, I don’t know which one that is,” Spiropoulos said. “I keep deferring to (borough internal auditor James) Wilson, who keeps looking at Mr. Moosey, and no one’s answering your questions. I don’t know which one.”

Officials need the extension to ensure they can still sell the ferry for $1.75 million. The ferry still needs repairs to its unique engines, which were damaged by rainfall in Ketchikan in January 2015. The total cost of those repairs is $3.093 million, including $1.993 million in unanticipated costs discovered within the last month, when insurance assessors pushed to have engines moved out of the boat for repairs, rather than fixing them in place. Mayfield has said officials could receive the cost of the repairs from its insurance company.

Without a written extension of some kind, the borough’s options are limited: officials have mentioned the possibility of scrapping the boat (which would cost additional funds) or selling the boat as-is to another buyer. The ferry has already cost the borough more than $2 million since officials received it from the U.S. Department of Defense.

Mayfield argued against delaying payment on the repairs. He has taken the lead on reviewing the insurance agreement for the assembly, and has in the past maintained that paying for repairs sooner rather than later would be a sign of good faith and improve the borough’s negotiating position with its insurer, Lloyd’s of London.

“The M/V Susitna is kind of like a patient that has a severed artery and it’s draining the lifeblood of our taxpayers,” he said. “We really need to send it to the doctor and get that fixed. That’s the only way to stop the drain, and we need to be decisive about it.”

Contact reporter Brian O’Connor at 352-2270, brian.oconnor@frontiersman.com, or on Twitter @reporterbriano.