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V.I. Port Authority Streamlines Finances to Manage Operating Losses

July 18, 2007 — Talk of financial accountability and following proper procedures when executing capital projects dominated the V.I. Port Authority's meeting Wednesday, as VIPA board members worked as a cohesive unit to address several leases, contracts and other requests.
At the forefront of discussion early in the meeting was the need to streamline the authority's balance sheets, showing exactly how much revenue is garnered from facilities such as the Crown Bay Commercial Center on St. Thomas.
VIPA financial documents put the authority's total operating revenues as of May 31, at about $30.4 million. However, total operating expenses add up to about $32 million, for a $1.6 million total operating loss. According to VIPA Chief Financial Officer Judith James, the dip can be attributed to a decrease in revenues for the aviation division, and an increase in total operating expenses on the marine side.
Flipping through the figures, VIPA board member Gordon Finch noted that fiscal year 2006 would add up to "a bad year" for the authority, showing a significant difference in the net operating profit over FY 2007. Finch's concerns prompted board chairman Robert O'Connor to call for the timely completion of the authority's annual single audits, so that entities such as the Legislature can have access to VIPA's financial information when necessary.
Finch also called for the authority's balance sheets to specifically reflect how much revenue is being collected from the Crown Bay Center, along with how much money is continuously being spent on the project.
"I would like due diligence relative to cost expenses and revenue tracking," he said. "We need to understand the full picture here — I myself feel that I don't have a grasp for what's going on at Crown Bay."
James explained that a Crown Bay report was supposed to be factored into the financial report but was inadvertently "not included."
A substantial financial request from one carnival troupe on St. Croix also prompted board members to re-evaluate their policy on local contributions, and how such expenses are reflected in the authority's annual budget. The request comes from Crucian troupe Gentlemen of Jones, who have asked VIPA for $5,000 to $10,000 for the lighting of Christiansted during the upcoming Christmas season.
Board members voted to deny the request since VIPA already contributes $10,000 to each island's carnival or festival committees. Tying the issue back into the compilation of the authority's budget, Finch, along with board chairman Robert O'Connor, suggested that all of VIPA's contributions be specifically line-itemed, giving both board members and residents a better idea of the general expenditures.
"We used to have a budgeted item listed as contributions," Finch, the authority's former executive director, said. "So I believe that in the 2008 budget there should be a specific line-item so the community knows that we don't have a bottomless pit for contributions."
James explained that VIPA's budget does include a contributions listing, but could not say how much was spent during FY 2007. "The number of line items is enormous, so yes, some of the items are rolled up into one larger category," she said.
O'Connor requested that upcoming contributions listings be broken down so that board members get a clearer picture on exactly how much the authority is spending on various projects, organizations and programs.
A number of change orders requested for three capital improvement projects on St. Thomas also stirred up some concerns, as board members questioned why the requests were authorized without their approval.
"We seem to be operating behind the eight ball here, instead of in front," O'Connor said.
Finch added that any items that call for additional funds from VIPA should go before the board. "It doesn't matter it if is something different than what was called for in the original plans," he said. "I don't want to leave the impression that we did some bungle, like a bunch of bumbling idiots."
Change orders approved by the board on Wednesday call for:
— an additional $153,102 for O'Brien Construction, hired to construct the new taxi lane at Cyril E. King airport (95 percent of the funds will come from the Federal Aviation Administration, while VIPA will cover the remaining five percent);
— an additional $102,955 for O'Brien Construction to install a quality control program for the taxi lane project;
— an additional $529, 664 to Island Roads Corporation to meet various federal and local requirements put in place for the building of the Red Hook Ferry terminal (the extra funds will be covered by VIPA); and
— an additional $300,000 for V.I. Cement & Building Products Inc, which will cover the final payment on the dredging at the Ann E. Abramson pier.
Board members also selected new officials on Wednesday. While O'Connor was retained as the board's chairman, Finch was voted in as secretary and Cassan Pancham selected as the vice-chair.

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July 18, 2007 -- Talk of financial accountability and following proper procedures when executing capital projects dominated the V.I. Port Authority's meeting Wednesday, as VIPA board members worked as a cohesive unit to address several leases, contracts and other requests.
At the forefront of discussion early in the meeting was the need to streamline the authority's balance sheets, showing exactly how much revenue is garnered from facilities such as the Crown Bay Commercial Center on St. Thomas.
VIPA financial documents put the authority's total operating revenues as of May 31, at about $30.4 million. However, total operating expenses add up to about $32 million, for a $1.6 million total operating loss. According to VIPA Chief Financial Officer Judith James, the dip can be attributed to a decrease in revenues for the aviation division, and an increase in total operating expenses on the marine side.
Flipping through the figures, VIPA board member Gordon Finch noted that fiscal year 2006 would add up to "a bad year" for the authority, showing a significant difference in the net operating profit over FY 2007. Finch's concerns prompted board chairman Robert O'Connor to call for the timely completion of the authority's annual single audits, so that entities such as the Legislature can have access to VIPA's financial information when necessary.
Finch also called for the authority's balance sheets to specifically reflect how much revenue is being collected from the Crown Bay Center, along with how much money is continuously being spent on the project.
"I would like due diligence relative to cost expenses and revenue tracking," he said. "We need to understand the full picture here -- I myself feel that I don't have a grasp for what's going on at Crown Bay."
James explained that a Crown Bay report was supposed to be factored into the financial report but was inadvertently "not included."
A substantial financial request from one carnival troupe on St. Croix also prompted board members to re-evaluate their policy on local contributions, and how such expenses are reflected in the authority's annual budget. The request comes from Crucian troupe Gentlemen of Jones, who have asked VIPA for $5,000 to $10,000 for the lighting of Christiansted during the upcoming Christmas season.
Board members voted to deny the request since VIPA already contributes $10,000 to each island's carnival or festival committees. Tying the issue back into the compilation of the authority's budget, Finch, along with board chairman Robert O'Connor, suggested that all of VIPA's contributions be specifically line-itemed, giving both board members and residents a better idea of the general expenditures.
"We used to have a budgeted item listed as contributions," Finch, the authority's former executive director, said. "So I believe that in the 2008 budget there should be a specific line-item so the community knows that we don't have a bottomless pit for contributions."
James explained that VIPA's budget does include a contributions listing, but could not say how much was spent during FY 2007. "The number of line items is enormous, so yes, some of the items are rolled up into one larger category," she said.
O'Connor requested that upcoming contributions listings be broken down so that board members get a clearer picture on exactly how much the authority is spending on various projects, organizations and programs.
A number of change orders requested for three capital improvement projects on St. Thomas also stirred up some concerns, as board members questioned why the requests were authorized without their approval.
"We seem to be operating behind the eight ball here, instead of in front," O'Connor said.
Finch added that any items that call for additional funds from VIPA should go before the board. "It doesn't matter it if is something different than what was called for in the original plans," he said. "I don't want to leave the impression that we did some bungle, like a bunch of bumbling idiots."
Change orders approved by the board on Wednesday call for:
-- an additional $153,102 for O'Brien Construction, hired to construct the new taxi lane at Cyril E. King airport (95 percent of the funds will come from the Federal Aviation Administration, while VIPA will cover the remaining five percent);
-- an additional $102,955 for O'Brien Construction to install a quality control program for the taxi lane project;
-- an additional $529, 664 to Island Roads Corporation to meet various federal and local requirements put in place for the building of the Red Hook Ferry terminal (the extra funds will be covered by VIPA); and
-- an additional $300,000 for V.I. Cement & Building Products Inc, which will cover the final payment on the dredging at the Ann E. Abramson pier.
Board members also selected new officials on Wednesday. While O'Connor was retained as the board's chairman, Finch was voted in as secretary and Cassan Pancham selected as the vice-chair.

Back Talk Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.