Mat-Su Asked to Return $12.3M in Federal Grants for Ferry Project

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The Federal Transit Administration wants the Matanuska Susitna Borough to pay back 12 point 3 million dollars in grants related to the ferry MV Susitna.

Matanuska Susitna Borough manager John Moosey made the announcement today [thursday] at a press conference in Palmer.   He said

 “We have been working diligently the last 2 and a half years to resolve this issue. We have not been successful yet. “

 Moosey said that Borough Assembly members will meet in a special meeting next week to decide what to do.  He said it is not clear what will happen if the Borough fails to pay.

 “We hope not to find out. But we at this point in time, are looking for an alternative solution other than paying 12 point 3 million dollars back”.

 The Federal Transit Administration letter, received this week, indicates that there is a 30 day deadline on the payment.

 Moosey said that a delegation from the Borough visited Washington DC last December to speak with the secretary of the FTA to present everything the Borough has done to resolve the issue of the ferry, albeit unsuccessfully.

“So at that time, we talked about many options we could do. And really threw out some discussion items, so essentially this action, this letter really allows us now to sit down and talk turkey and work out how this is going to be resolved.”

 Moosey said that the Borough will respond to the FTA within the 30 day time frame.  He says the amount of the money is not in dispute.  The Borough has been trying to sell the ferry for years, for about 6 million dollars, with no success, to try to recover costs the Borough has spent on it.

The Susitna is berthed in Ketchikan, which initially cost the Borough about  30 thousand dollars a month, although in recent months that cost has been reduced.

“And that has been part of our challenge, is that we have the boat, which we have in Ketchikan, which we have monthly costs on, and at the same time we have this grant from the FTA that needs to be resolved. So we are getting pinched both ways on this issue.”

 Mat Su Port Director Marc Van Dongen says about four million of the 12 point 3 million dollars was spent on the Port MacKenzie terminal building, and engineering and design costs ate up the remainder of the money.

“It was also used for the studies, we had to do environmental studies, route studies, passenger surveys. We did a design for the ferry landing at Port MacKenzie.”

 The ferry was paid for by the US Navy, but was given to the Borough with certain provisions tied to the millions of dollars in grants that went with it.

 Moosey said the Borough’s plan to use the ferry between Port MacKenzie and Anchorage fell apart when the Borough failed to get a second influx of money to build ferry landings on both sides of Knik Arm.