M/V Susitna talks continue

PALMER — In a brief and relatively anti-climactic meeting on the M/V Susitna ferry, the Mat-Su Borough Assembly directed the borough manager Thursday to work out the borough’s differences with the federal government.

Built as a military prototype craft capable of carrying a tank and landing on a beach, the M/V Susitna has been a trouble spot for the assembly for years, ever since it became clear that the planned Point MacKenzie to Anchorage route was not feasible.

The issue came to a head Aug. 5 when the Federal Transit Administration sent what’s called a “demand letter” requesting that the borough, since it did not use the vessel to run a ferry, repay $12.5 million in grants it received to build a ferry terminal, design landings, and outfit the vessel for civilian use.

In a special meeting Aug. 12, the assembly went into a closed-door session and came back out to schedule Thursday’s meeting and ask for more information.

Between Aug. 12 and Thursday, though, Sen. Mark Begich brought U.S. Secretary of Transportation Anthony R. Foxx to Alaska, making a stop in Mat-Su, during which he talked to Mat-Su Borough Manager John Moosey.

“He stated that he would give myself and, really, the borough some time to sit down and negotiate with him in Washington,” Moosey said.

Assemblyman Vern Halter cited that development as one of his reasons for arguing that the assembly didn’t need to go behind closed doors Thursday but should instead just ask Moosey to work on the negotiations.

One of the reasons to go behind closed doors was to discuss possible litigation to avoid having to pay the federal government the money owed. Halter said he would rather see the borough reach an agreement.

“We should honor our agreements and pay our part of the settlement,” he said.

Mat-Su Borough Attorney Nick Spiropoulos let the assembly know that he was working to bring in lawyers to help him work through the process with FTA. He said he’d already started talking to one firm in particular, Venebale LLC — the same one the borough used to help with a lawsuit against the Point MacKenzie Rail Extension.

“They have a couple of lawyers who do grantee work and grantee default work,” Spiropoulos said. “I certainly intend on bringing them onboard with, like with the rail, a team approach to this.”

Assemblyman Jim Sykes asked the borough’s finance director, Tammie Clayton, what the interest rate on the money would be if the borough is required to pay it back. Clayton said it was 1 percent but it’s a rate the government sets each year. It’s been at 1 percent since 2010 but in 2009 it was 3 percent. And, she said, whether the borough has to pay that is up to the federal government.

“The rate is not negotiable but waiving the rate is something that could possibly be negotiable,” she said.

Toward the end of the meeting, Assemblyman Steve Colligan said that a lot of people were wringing their hands or scoring political points over the demand letter.

“The fact is we asked for the demand letter a year ago because it is required for us to have that in hand to start to negotiate,” Colligan said. “I’m pleased that we are now in a position to be able to negotiate.”

In its quest to get rid of the vessel, the borough has come up with a long list of potential buyers and uses from a vessel to shuttle charity workers up the Amazon to an emergency vessel for California firefighters to a place in which to grow cabbages offshore. Thursday, two more uses were added to that list.

Assemblyman Darcie Salmon said the Knik Tribal Council had contacted him about taking the vessel off the borough’s hands. He said the council couldn’t pay for it but would take it if the borough would allow it. Mat-Su Borough Mayor Larry DeVilbiss, meanwhile, said that he’d talked to some people in Nome who were mining the ocean floor for gold like in the reality television show Bering Sea Gold. He said those miners were looking into the possibility of using the ferry in their work.

“They were very interested in it,” DeVilbiss said.

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