Borough Assembly to consider appropriation and reimbursement for repair of MV Susitna

The regular meeting of the Mat-Su Borough Assembly, originally scheduled for Tuesday, has been canceled, and a special meeting has been added for Thursday at 5:00 p.m.

The special meeting has one agenda item, introduction of an ordinance appropriating $870,000 to pay for the repairs to the MV Susitna.

In January, the Susitna suffered damage to its propulsion system after heavy rain in Ketchikan resulted in water coming in through the exhaust and into the engines. According to the borough, repairs to the vessel will total more than $1.1 million. The Susitna is insured with a deductible of $250,000.  The proposed ordinance and resolution also allow for the borough’s general fund to be reimbursed once the insurance payment is received. The ordinance and resolution are scheduled for a vote at the assembly’s first December meeting.

In September, the borough accepted an offer from the Philippine Red Cross to purchase the MV Susitna for $1.75 million. The sale agreement includes a $250,000 deposit to cover the insurance deductible. The vessel was initially constructed as a U.S. Navy prototype for about $80 million.

The Mat-Su Borough is also in negotiations with the Federal Transit Administration on repayment of $12 million in grant funds. The grants were intended to construct terminals in the Mat-Su and Anchorage as well as conduct refits on the Susitna. The refits were done, and a terminal building was constructed in Port Mackenzie. The borough is using the ferry terminal for other port business. Since the Susitna is not going to another agency eligible for grants from the FTA, the federal government requires that the money be repaid. Recently, borough representatives traveled to Washington, D.C. to continue negotiations.