Alaska has a long history of political boondoggles. The list is nearly endless. But few boondoggles carry more object lessons than the Mat Su Borough’s adventures with the M/V Susitna. It has lessons for everyone: “free” gifts from the federal government, federal grants with fine print, local governments venturing where they shouldn’t, poor project planning by local governments, wretched cost efficiency decisions and stellar examples of the Sunk Cost Fallacy.
Most of Matanuska-Susitna Borough is located on the north side of Knik Arm; most of the Municipality of Anchorage lies on the south side. There are folks who think that’s a Good Thing, but there are more who think it should be easier to get from the Valley to Los Anchorage. The two mile stretch of very muddy water and very high tides between Point McKenzie and Government Hill seems to be a magnet for expensive Big Ideas, would-be alternatives to the 30 mile drive around Knik Arm to the Matanuska and Knik River bridges.
One of those Big Ideas was a high speed ferry across Knik Arm. And the M/V Susitna was available for free. Here’s the short, simplified version of the saga.
The existence M/V Susitna is a story all by itself. A half-sized one-off of an experimental dual purpose military ship, it exists because the late Uncle Ted wanted to create work for the Alaska Ship and Drydock, Inc., in Ketchikan, and put an earmark in the Department of Defense appropriation for construction of the ship, under the unenthusiastic auspices of the Office of Naval Research. ONR has seemingly expunged all references to the M/V Susitna from its website. A search reveals a single, broken (and doubtlessly overlooked) link. WC’s FOIA requests have been ignored. It’s not clear that ONR ever ran sea trials of its very expensive prototype. Apparently, you can only kiss a pig so many times.
Most prototypes are sent to the scrap yard because they are you know, prototypes. But the Navy instead offered to give away the M/V Susitna. And the Mat Su Borough was unable to resist. Sweetened with a $21 million grant from the Federal Transit Administration, Mat Su Borough spent about $6 million refurbishing the ship for passenger service, another $3.6 million on a passenger terminal at the Borough’s Port MacKenzie and $2 million to design landings at Anchorage and the Mat-Su port. The Borough didn’t read the fine print on the grant.
In the meantime, funding and political support for an Anchorage landing dried up (or may never have existed; it depends who you listen to). Or it may be that someone in the Finance Department did the math and concluded that the cost of operating a ferry that would only carry 20 vehicles and 129 passengers couldn’t be cost-effective at a fare anyone would pay. Either way, ferry service across Knik Arm never happened. The M/V Susitna has remained in Ketchikan and has never been in Cook Inlet waters.
Of course, storing a 195-foot long ship doesn’t come free. In fact, it costs millions of dollars. The federal grant is for providing ferry service, not failing to provide ferry service. So the storage costs have come out of the Mat Su Borough budget. That rankled the Borough Assembly, who sharply reduced the scope of storage and maintenance. So that when rainstorms – rainstorms in Ketchikan, who would have thought? – the water got into the ship’s engines and trashed them. Now there’s a $900,000 repair bill to get the M/V Susitna in shape that it can be sold. Well, sold again. There is insurance, but the insurer, understandably, is wary about dealing with the Mat Su Borough Assembly, and is requiring the Borough to front the repair costs.
And the Federal Transit Administration wants its $21 million back.
What lessons might our friends in the Mat Su Borough draw from this little adventure into salty waters?
- There ain’t no such thing as a free lunch. TANSTAFL. Or, stated more specifically, when the government tells you something is yours for free, it’s not.
- Always read the fine print. Especially when accepting grants.
- “Prototype” means “protoype,” as in experimental, unproven and expensive.
- When venturing into an area outside of your expertise, always have an exit strategy.
- Don’t be penny wise and pound foolish. If you are going to curtail preventative maintenance on a valuable asset, store that asset properly. Waterproof exhaust stack covers cost a lot less than $900,000.
- It’s not enough to launch a ship; you have to be able to land it, too.
WC wishes the Mat Su Borough well. And predicts someday this whole sad affair will be in political science textbooks as an object lesson.