Communities reliant on Coast Guard services feel the pain of the federal gov. shutdown

The mold of a 37-foot catamaran sits in Eric Sloth’s boat shop in Homer. (Photo by Aaron Bolton, KBBI – Homer)

The federal government’s partial shutdown shows just how important basic government operations are to Alaska’s coastal communities.

Most U.S. Coast Guard operations are suspended and that’s holding up commercial boat and permit sales as well as some construction of passenger vessels.

“We’re really just coming into the busy season,” said Doug Bowen, a broker for Alaska Boats and Permits in Homer. “The next few months will be the busiest time of the year for us.”

Bowen facilitates the sales of all types of boats, but commercial fishing vessels are his bread and butter.

However, fishermen trying to buy or sell those vessels are hitting the same wall.

“The shutdown is affecting us because we work every day with the United States Coast Guard re-documenting vessels,” Bowen explained. “When a title transfers from a seller to a buyer, all of that is recorded with the Coast Guard back in Falling Waters, West Virginia. They’re closed, so none of that recording goes on.”

Coast Guard registration is much like an automobile title. It details not only who owns the boat, but if there are any loans taken out on the vessel. Most commercial fishing vessels are required to be federally registered.

That means the boats Bowen sells can’t officially change hands during the shutdown. Sales that weren’t complete before the shutdown began are on hold as well.

“There’s several deals like that that we’re in the middle of,” Bowen added. “Needless to say, if you’re waiting for a couple or several hundred thousand dollars, you’re not happy about the delay and there’s really nothing we can do about it.”

Commercial fishing permit sales are also affected. They can cost thousands of dollars and fishermen commonly put their boats up as collateral on loans to finance them. It’s also common on loans used for major repairs to vessels.

But without a recent copy of a boat’s federal registration, private and state lenders often won’t move forward.

That’s the boat Homer-based fisherman Larry Reutov finds himself in. Reutov hoped to use his vessel to secure a loan for new engines he needs by the March fishing season.

“I’m just waiting probably another week or two, and then if not, I’ll have to come up with something else,” Reutov said, “because the Coast Guard are closed and can’t do nothing with the boat.”

He’s considering putting his house up for collateral, but he’ll need to decide soon – the work will take more than six weeks to complete.

Boat builders are also feeling the pain of the shutdown. Passenger vessels such as large fishing charters and ferries are required to be inspected by the Coast Guard from the planning phase of construction to the day vessel touches the water.

Eric Sloth’s shop in Homer is filled with a mold for a 37-foot power catamaran.

“It will be a work boat that we hope to be certified by the Coast Guard – so probably a passenger vessel,” Sloth said. “We are prepared to submit plans and we won’t be going any farther until we get approval.”

Sloth said the boat isn’t due to be complete until the spring of 2020, but every week the shutdown lasts is another week he can’t start the long process toward the finish line.

“The way the community works with the Coast Guard is really good, and I think things run pretty smoothly apart from politics,” he said. “I’d like to see it all get going again.”

That may just happen in some respects. Alaska Sen. Dan Sullivan introduced a bill Tuesday that would provide pay for active duty Coast Guard members and payments to its retirees.

Correction: A previous version of this story mischaracterized a bill Alaska Sen. Dan Sullivan introduced regarding pay for Coast Guard members during the shutdown. It will provide pay for active duty Coast Guard members and payments to its retirees. 

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