Ferry Engine Repairs Begin

Assembly Members Jim Sykes, Randall Kowalke, Matthew Beck, and Dan Mayfield voted to approve the repairs. Assembly Members Steve Colligan and George McKee voted no.

The bids to repair all four engines amount to $3 million. The Borough held insurance on the ferry with Lloyd’s of London when rainfall collected in the engines’ stacks in January 2015.  In March, the 328-year-old insurance company gave a range of possible coverage from $420,000 to $1.1 million. But last night, news of the discovery of a bent rod in engine #3 may have increased the possible reimbursement. “It’s good news. … It’s good for us,” said Borough Attorney Nick Spiropoulos. Borough Manager John Moosey said the final number after the repair costs, the insurance reimbursement, and the sale of the ship, “we could lose money on the deal, I personally don’t think we will.” Scrapping the ship would cost us, he said.

Assembly Member Dan Mayfield supported repairing the ship. Mayfield has had a career in the insurance industry.

Hear Mayfield’s quote posted here.

“It appears that there’s been some more favorable information that’s come to light. I personally feel with my insurance experience looking at the data that I’ve been provided that we have a better chance of recovering more than $1.1 million for the repair of the vessel,” Mayfield said.

The Philippine Red Cross is buying the ship for $1.75 million.

Borough Internal Auditor James Wilson estimates in a most likely scenario that the Borough may make up to $1.3 million on the repair and sale of the ship. That money would go toward reducing ferry grant funds owed to the Federal Transit Authority.

Ship Capt. JP Stormont gave an overview of the repair schedule, saying there is a one-week cushion for delays while meeting the completion date of May 31 and there is another month to meet the delivery deadline. “The delivery date is not a problem. That’ll get done. These people are in the business to get the job done. I just got a call from Pacific Power about three hours ago, and Dan Miller said the techs are ready, are we starting.” The Red Cross has asked him to captain the vessel to the Philippines.

This is the third time the Assembly has met on the vote to repair the ship. Before they would agree to repairing the vessel, some on the Assembly insisted on a signed agreement to the changes in the deal rather than an email agreement.

Arriving during last night’s meeting, the signed letter from the Chairman of the Philippine Red Cross, Richard Gordon, agreed to four provisions that the Borough sought before repairs would begin.

• changing the repair completion date to June 30, 2016

• changing the delivery location to Foss Maritime, Seattle, Wash.

• changing the sea trials to take place near Seattle

• confirming the Philippine Red Cross will remove the ship within 45 days of completion

The Assembly has voted to borrow $3 million from the Land Management Fund with the stipulation of returning the funds after insurance money is received. The Land Management Fund acquires revenue from fees on gravel, land, timber, and leases, among other services.

Attached is the signed amended agreement with the Phillippine Red Cross.

Top photo: Manager John Moosey in background, Capt. JP Stormont at lectern, Internal Auditor James Wilson, and far right Port Director Marc VanDongen.

For more information call Borough Manager John Moosey at 861-8557 or Public Affairs Director Patty Sullivan at 861-8577.