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HomeNewsArchivesVIPA PUTS OFF FEE HIKES, CUTS ITS FY2003 BUDGET

VIPA PUTS OFF FEE HIKES, CUTS ITS FY2003 BUDGET

Oct. 16, 2002 – The Port Authority governing board decided on Wednesday to make do with less for Fiscal Year 2003 — voting to postpone for six months any increases in landing and passenger fees charged airlines and adopting a slimmed-down budget of $75 million.
The board called on VIPA staff and supervisors to cut down on travel expenses and get along with less in the way of materials and supplies in order to make up a $5.3 million shortfall in its earlier 2003 spending plan.
Financial matters dominated the board meeting. The projected shortfall in Aviation Division revenues was one reason a revised budget was submitted for consideration, VIPA spokeswoman Shirley Smith said in a statement released after the meeting.
The board also voted to use "money from its investment accounts" to make up for a loss of $2.5 million in the Aviation Division stemming from the continuing after-effects of last year's Sept. 11 terrorist attacks.
Gordon Finch, VIPA executive director, warned board members that they will have to do something to increase aviation sector revenues six months from now — by raising air carrier fees or by finding another way to bring in more money. Another option, he said, would be to ask the V.I. government for subsidies.
Finch said government subsidies are a fact of life for many port authorities across the nation, including Puerto Rico. "If we do not get subsidies, we have no choice but to raise rates," he said.
The board backed down last month on its earlier plan to raise landing fees by 35 percent after airline executives said at a Sept. 17 public forum called by Finch that they would cut back service or stop serving the territory altogether if the hikes were imposed. (See "Raise fees and lose flights, airlines tell VIPA".)
At Wednesday's meeting, Don Mills, VIPA legal counsel, reminded the board of its obligations to VIPA bondholders and said some means of raising funds to make up for the $5.3 million shortfall must be found in the next six months in order for the agency to keep its favorable rating on the bond market.

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Oct. 16, 2002 - The Port Authority governing board decided on Wednesday to make do with less for Fiscal Year 2003 -- voting to postpone for six months any increases in landing and passenger fees charged airlines and adopting a slimmed-down budget of $75 million.
The board called on VIPA staff and supervisors to cut down on travel expenses and get along with less in the way of materials and supplies in order to make up a $5.3 million shortfall in its earlier 2003 spending plan.
Financial matters dominated the board meeting. The projected shortfall in Aviation Division revenues was one reason a revised budget was submitted for consideration, VIPA spokeswoman Shirley Smith said in a statement released after the meeting.
The board also voted to use "money from its investment accounts" to make up for a loss of $2.5 million in the Aviation Division stemming from the continuing after-effects of last year's Sept. 11 terrorist attacks.
Gordon Finch, VIPA executive director, warned board members that they will have to do something to increase aviation sector revenues six months from now -- by raising air carrier fees or by finding another way to bring in more money. Another option, he said, would be to ask the V.I. government for subsidies.
Finch said government subsidies are a fact of life for many port authorities across the nation, including Puerto Rico. "If we do not get subsidies, we have no choice but to raise rates," he said.
The board backed down last month on its earlier plan to raise landing fees by 35 percent after airline executives said at a Sept. 17 public forum called by Finch that they would cut back service or stop serving the territory altogether if the hikes were imposed. (See "Raise fees and lose flights, airlines tell VIPA".)
At Wednesday's meeting, Don Mills, VIPA legal counsel, reminded the board of its obligations to VIPA bondholders and said some means of raising funds to make up for the $5.3 million shortfall must be found in the next six months in order for the agency to keep its favorable rating on the bond market.

Publisher's note : Like the St. John Source now? Find out how you can love us twice as much -- and show your support for the islands' free and independent news voice ... click here.