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Ferry Company Warns of Price Increase if Subsidies Don't Come Through

Oct. 2, 2007 — Local ferry companies have continued to sustain heavy financial blows over the years and must start to collect some of the local and federal subsidies promised by law, a lawyer for one company told senators Tuesday.
If the money doesn't start to trickle in soon, the companies will have to offset their annual operating losses by increasing per passenger rates — which would mean a more than $6 charge for a one-way ticket, explained Claudette Feron. Discounts, such as those given to commuters, senior citizens and students, would have to be eliminated for the companies to break even, she added.
The attorney for Varlack Ventures and Transportation Services testified during Tuesday's meeting of the Government Operations and Consumer Protection Committee.
Since the franchise route between St. Thomas and St. John is considered a part of the V.I. mass public-transportation system, the government, by law has a responsibility to kick in for certain expenses, such as maintenance costs and buying new boats, Feron explained. Though the law has been on the books for the past two decades, no subsidies were allotted until earlier this year, giving the companies $250,000 each, she added.
That appropriation should have been closer to $1.5 million, Feron argued, based on the operating expenses incurred by the ferry companies over the past five years.
"Minimally, the ferry boat companies submit that the appropriation must be at least $500,000 for each company annually," she told senators.
Speaking later in the meeting, representatives from the Department of Public Works explained that the ferry companies are also entitled to federal subsidies. However, they said, certain limitations have been placed on what the funds can actually be used for.
"One of the first steps is being able to apply for the federal funds," said Dayna Clendinen, the department's deputy commissioner of transportation. "The Virgin Islands only become eligible for federal ferry boat discretionary programs this year. Though we have been able to submit applications for both St. John operators, we have not heard back as yet on the status of the applications. We have also requested funding from our federal highway program, but those funds have to be used to purchase vessels for the ferry boat operators."
Though the territory receives about $17 million in federal highway funds each year, much of the money is channeled to various capital-improvement projects, such as road repairs, said Public Works Commissioner Darryl A. Smalls. To remedy this problem, Smalls suggested that the department begin to lobby Congress to earmark additional pools of money for specific projects, freeing up more of the annual award for transportation subsidies.
Turning to other matters, Public Works officials gave senators a status update on many of the territory's outstanding road projects. Smalls remained positive in his remarks, saying the department has been allotted $5.3 million that went toward covering several outstanding obligations — including road patching and paving projects covered in bills recently passed by the Senate.
Longstanding projects covered by federal highway funds are also progressing, he said, including the first phase of the Christiansted bypass on St. Croix. A conditional notice to proceed on the second phase of the project was issued Monday, he said.
Responding to senators' concerns about a lack of parking in the downtown and East End areas of St. Thomas, Smalls said the department will embark on a comprehensive inter-modal transportation study, that will pinpoint the best way to reduce heavy traffic flow throughout the island, among other things. Before anything can be implemented, however, the department has to make sure its mass transportation system is running reliably, while the public — along with private-sector businesses — has to become more involved in coming up with solutions or partnerships that could help move the process along.
Present during Tuesday's meeting were Sens. Liston Davis, Carlton "Ital" Dowe, Juan Figueroa-Serville, Shawn-Michael Malone, Basil Ottley Jr. and Alvin L. Williams.
Sen. Terrence "Positive" Nelson was absent.
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