The most recent chapter in the saga of the Susitna may end in litigation. Minutes into a special Mat Su Borough Assembly meeting on Tuesday night, deputy mayor and Assemblyman Ron Arvin made the call to move into executive session.
A mere forty-four minutes later, the Assembly members emerged from conclave, only to have Arvin announce that the executive session would be continued on August 21.
“I’ll just jump right in here to put a little wrap on the executive session. We got a demand letter for paymen from the FTA, and there are several potential solutions and responses to that. So we asked staff to put together some additional information, because we could not arrive at a conclusion without knowing some additional details, so that will be the basis of the meeting on the 21st. “
The action was not a surprise. The Borough received a letter last week from the Federal Transportation Administration demanding payment on millions in federal transportation grants with a thirty day deadline for payment
The Assembly plans to continue it’s special meeting out of the public eye on August 21 during mid afternoon, although Assembly member Jim Sykes asked that the public be advised of the Borough’s potential liability be if the Borough has to pay the full 12 million dollar bill
“The demand letter says that if we don’t pay in thirty days, we have to pay whatever some federal published rate is, and then if we don’t pay in ninety days they will hit us with a 6% penalty. So I think that we should understand what our total liability could be. I hope we can work our way out of this and never have to pay this, but I think we should know what that number is, and the second thing is, we should know, if we did have to pay, where that money would come from. And I think that should be all public information.”
Deputy mayor Arvin said that information would be brought forward at the next meeting.
The MV Susitna was built with federal funds in a Ketchikan shipyard. It was touted in 2008 as the first E-craft, or expeditionary craft, a 195 foot catamaran able to transition from high speed hull to barge and back again. Originally, the ship was intended to be the first ice breaking ferry to ply the waters of Cook Inlet. And the Borough spent 6 million in FTA money on remodeling it for passenger use, while another 6 million went to pay for a ferry terminal building at Port MacKenzie, and for design, engineering and environmental work. But the plan hit a snag some years ago, when the Borough and the city of Anchorage could not agree on a location of a ferry dock on the Anchorage side of Knik Arm. The ferry has been docked in Ketchikan since, at Borough expense.