Sept. 19, 2007 — The governing board of the V.I. Port Authority approved a $58.2 million budget for fiscal 2008 Wednesday that reflects a net operating loss of $3 million and calls for $5.4 million in increased expenditures from 2007, as well as new, enhanced fiscal oversight measures.
The 2008 budget is actually on very solid ground because of non-operating income totaling almost $5 million from the federal government, said Cassan Pancham, vice chair of the board and chair of its finance committee.
“This Port Authority is actually a pretty strong public corporation,” Pancham said. “It’s got lots of equity and cash flow.”
Nevertheless, he and other members implemented new measures that closely monitor spending.
“We need to establish policy,” said Gordon A. Finch, the board's secretary and a member of the finance committee. “This budget sets up a $58 million policy … to be continued beyond this executive director and me as a member of the board.”
The bulk of the 2008 spending increases will go to salaries and benefits — $2.6 million more than last year — in large part because of what VIPA says is the escalating cost of medical care.
The budget also calls for the hiring of 23 new employees and the filling of 20 vacancies as facilities come online in Crown Bay and Red Hook Terminal. While funding for the positions was approved, Pancham said VIPA had not “evaluated the necessity of the positions,” prompting the board to freeze all hiring, with the exception of eight new positions and three vacant positions on St. Thomas and St. Croix.
The board also tightened up the spending process by saying it’s no longer enough that VIPA departments stay within their spending limits. They must now receive board approval for any project not specifically listed in the 2008 budget, and for equipment purchases not listed that exceed $5,000.
“It seems in the past there have been occasions when change orders have happened in existing projects, or new projects have started without consultation with the board,” Pancham said. “That can’t happen going forward. Management and staff of the Port Authority, along with the board, will decide in the budget period what projects are priorities, and those should be focused on.”
Flexibility isn’t gone, but there will be greater accountability, Pancham said.
“Things happen, and something may come up and you may have to do a new project, but the Port Authority should not just undertake that without coming back to the board to … determine if we have the revenues or need to make trade offs,” he said.
Finch, who proposed the stricter scrutiny, said he is not trying to indict anyone or any program: “We want to know how the money is moving at the start of the fiscal year, and we need to set controls.”
The board approved his proposal unanimously.
Also gaining unanimous approval was the establishment of a contingency fund of $1.5 million in 2008 to be used to fund any board-approved spending outside the original budget plan. The contingency fund will now become a permanent part of VIPA’s budget, though the amount may vary each year.
The board also unvelied an incentive plan to help boost tourism on St. Croix. Beginning Jan. 1, 2008, and running through Sept. 30, 2008, the board will waive the landing and overnight fees for any new or additional flights to the island. The estimated $500 landing fee and $175 overnight fee may not translate into significant savings for a commercial airline company.
However, coupled with additional efforts through the Tourism Department and the V.I. government to enhance tourism in St. Croix, the fee waiver serves as one more incentive for "decision makers" to view St. Croix as a tourist destination.
The VIPA governing board also addressed a variety of pending construction and lease issues.
The board approved a $4.3 million joint-venture contract with local companies V.I. Paving and Better Roads to repave the taxiway at the Henry E. Rohlson Airport on St. Croix. The approval also includes a supplemental change order, which reduces the project’s total cost by $600,000 to $3.7 million, courtesy of an asphalt-milling plan that will cut costs.
A geo-technical study of the murky area behind the Enighed Pond on St. John was presented for the board’s review, outlining four options to ultimately fill in the area so it can support some 500 pounds per square foot of construction capacity.
The board granted a lease — pending approval of a business license — to Alfonsina Watson to rent a kiosk near Building 6 in Crown Bay Commercial Center for $800 a month and sell tourist items.
The board denied a lease application from DCB Investments to operate a sports bar called the Sugar Mill Lounge at Crown Bay Commercial Center, pending further negotiation. The board felt the proposed 15-year lease required too little up-front investment from DCB, potentially putting the authority in the position of subsidizing a failed business.
Despite serious objections from Finch, the board approved a three-year lease for Native Son to occupy office and counter space at the new Red Hook Ferry Terminal. Native Son and two other ferry companies at the Blyden Terminal on the waterfront have chronically failed to abide by schedules and should be brought into compliance before getting additional perks, Finch said.
“The real problem is we have more seats than we have passengers, and there’s fierce competition,” said Darlan Brin, VIPA executive director.
The Port Authority will draft language for leases to be issued to some 58 tenants occupying the Bournefield housing project on Cyril E. King Airport property. The leases will say that the tenants cannot transfer their occupancy rights to anyone. The board ultimately intends to tear down the project, but is willing to maintain a month-to-month agreement with current tenants who otherwise would have no place to go.
The board tabled discussion of the V.I. Taxi Commission’s concession at the Cyril E. King Airport, which has been operating on a month-to-month basis since the franchise expired July 30, 2007. The board’s options are to renew the franchise, find a new concession or operate the concession through the authority and charge taxi operators.
Finally, Finch lambasted personnel at the St. Croix airport for what he called the deplorable condition of the women’s bathroom. He referred to complaints of a horrible stench, and said if staff could not adequately maintain the restrooms, the Port Authority would have to hire an outside contractor, calling the situation “ridiculous.”
The Port Authority, which owns and manages the territory’s air and marine terminals, is not raising aviation rates for airlines coming to the Virgin Islands, despite the fact that the number of planes landing in the territory has decreased during the past two years. Aviation revenues are projected to remain flat compared to 2007 revenues, while marine-revenue projections call for an increase of more than $3 million to $27.8 million in 2008. That’s in part due to improvements in tenant occupancy of the Crown Bay development, as well as a new marine tariff, whose adjusted rates for cruise lines went into effect in October 2007.
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