April 23, 2003 – The Port Authority board said thanks, but no thanks Wednesday to a proffered $3 million loan from a government fund that was aimed at giving it the financial leverage to rescind the airport landing and passenger fee increases it instituted on Feb 1.
The Senate approved legislation last week providing the no-interest loan to VIPA to shore up its finances and allow it to consider rescinding the 25 percent fee increases. The bill was sponsored by Senate President David Jones, who termed it a "win-win" solution for the authority's financial woes. (See "$3M loan would let VIPA reconsider fee hikes".)
The VIPA board didn't see it that way at its monthly board meeting.
Speaking in his capacity as a board member, Attorney General Iver Stridiron said: "I suspect that bill is D.O.A. [dead on arrival] on the governor's desk." But he added that "I can't speak for the governor."
Stridiron made his own view clear. "We ought not to do this," he said, pointing out that in its full session last week, "the Legislature approved more than $11 million in additional spending, when we are trying to make a $14 million payroll."
Darlan Brin, VIPA executive director, agreed. "Why borrow money we are ill prepared to service?" he said. Although Brin said he has been in conversation with Jones but that the authority cannot take out a loan. "We would put ourselves in greater deficit in the Aviation Division," he said.
Some financial relief will be coming from VIPA's own resources. The board voted unanimously to pay off the authority's aviation bonds on Sept. 30, thus eliminating about $3.2 million in annual debt service.
Cornel Williams, VIPA deputy executive director, explained the move: "Right now, there is $6.1 million in the reserve accounts. By using that money to pay the outstanding principal of $6 million, once we do that, we won't have the debt service of $3.2 million that the airline rates and charges cover; so, it will give us some leverage."
This "is not a Band-Aid" approach, Williams said, as the proposed loan would be. "This is long-term," he said, and it could open the door to lowering the airport fees.
Facing facts vs. painting pretty pictures
Talk quickly turned to means of educating the community about the Port Authority's position on the airport fees issue. In addition to having held a press conference earlier this year, VIPA officials have had a series of meeting with airline representatives to explain the authority's position.
Numerous business and civic groups have weighed in opposing the fee increases and holding the Port Authority accountable for American Airlines' subsequent announcement of cuts in service and operations in the territory. The carrier has discontinued ground operations at Henry E. Rohlsen Airport and will do so at Cyril E. King Airport on May 1, contracting the work out to its subsidiary American Eagle, while American Eagle will discontinue service between St. Thomas and St. Croix also on May 1.
Brin and Stridiron maintain that American would have taken the cost-cutting steps even if VIPA hadn't raised its fees, because of the carrier's own financial problems.
"American Airlines would have done what they have done regardless," Stridiron said.
"The fact is that American's actions have very little to do with the increases," Brin said. "It's not just the V.I., but throughout the country."
Board member Kent Bernier suggested hiring a public relations team to take the executive director to talk shows and to speak before various local groups — an idea that didn't appeal to the executive director. "We need to tell the people the facts; we don't need to hire somebody to paint a pretty picture," Brin said. "It's a matter of the facts being available."
An avid baseball player, Brin made an analogy: "Fans will boo you," he said, "then in the ninth inning you hit a home run, and they'll cheer. We have to take our boos for a while."
Tourism Commissioner Pamela Richards, who by virtue of that position chairs the VIPA board, suggested a public relations campaign be developed within the authority. "We don't need to go outside; we need to focus," she said. "Our staff can do it themselves."
Stridiron noted his own high profile position in the community. "I'm probably in the news more than any other public official," he said. "I make a point of telling what is going on, good or bad. We have to take our blows."
Crown Bay, Enighed Pond updates
In other action, Dale Gregory, VIPA's director of engineering, said the dredging of Crown Bay preliminary to extending the pier there is about 80 percent complete. He said the recent rains have had held up the project, but "in a week or two it should be finished."
Stridiron complained about the trail of mud which "has been left from Crown Bay all the way around the road to Long Bay." Gregory said that Great Lakes, the company doing the dredging, hired a number of independent truckers to haul the dredged fill away.
To deal with the mud problem, he said, "We are going to have them let the material dry a little more and then clean each truck before it leaves the site, and drive through some gravel before coming out on the road."
Gregory said although the Enighed Pond commercial port project on St. John also has been affected by the weather, it is moving along fine. He said two sections of the original plan — a marina and a fueling dock — have been eliminated in order to reduce costs. The priority is to get the facility up and running, he said, and the marina and fueling dock were auxiliary elements.
Brin said that hauling away the fill for the Enighed Pond marina presented a big problem. "It was too costly to haul away the spoils," he said. "We would have had to haul the material to St. Thomas, and that's too much money."
Gregory did not have a date for the groundbreaking on the St. John project, which has been decades in the planning, but indicated it would be soon.
Board members attending the meeting were Bernier, Public Works Commissioner Wayne Callwood, private-sector representatives Leslie Milliner and Robert O 'Connor, and Richards and Stridiron. Planning and Natural Resources Commissioner Dean Plaskett was absent.
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