Sept. 14, 2008 – This letter addresses concerns of the Virgin Islands community, in particular the residents of St. John, regarding the implementation of a one-way $.25 per passenger terminal use fee. This fee is to be collected by the Virgin Islands Port Authority at the Urman V. Fredericks Marine Terminal at Red Hook and the Charlotte Amalie Waterfront on St. Thomas, and at the Loredon L. Boynes Sr. Dock at Cruz Bay, St. John. Residents have complained that the fee was unreasonable, unjustified and discriminatory towards the users of Red Hook mainly the residents of St. John. Please allow me to clarify the facts regarding this user fee:
The Virgin Islands Port Authority (VIPA) is a semi-autonomous government agency that owns, operates and maintains the two public airports and the majority of the public seaports in the territory. While we do receive some federal funds, we do not receive nor do we contribute any monies to the Government of the Virgin Islands. The Authority is required to sustain itself by generating its own revenues through rental and facility usage fees established in our aviation and marine tariffs.
In 1998 the VIPA Board approved our marine tariff which states that "inter-island passengers traveling between St. Thomas and St. John shall pay a per passenger wharfage fee of $0.25 each way to the Virgin Islands Port Authority (to be collected directly by the Virgin Islands Port Authority)." The Board chose not to implement the fee until recently. It must be noted, however, that collection of a terminal use fee is not uncommon in the territory. In fact, VIPA currently collects per passenger fees at all of its air and marine ports – except at Red Hook and Cruz Bay. Passenger fees are usually incorporated in the cost of a traveler's ticket. For example, VIPA charges a $2.50 one-way per passenger fee that is automatically added to every ticket for travel between St. Thomas and the British Virgin Islands. Persons traveling to and from the BVI from Red Hook or the Edward W. Blyden Terminal in Charlotte Amalie have paid this fee for many years. In the past, the St. John ferry companies have objected to the Port Authority attaching fees to their tickets. Therefore, the Authority has decided to collect this particular fee on its own – possibly via an automated turnstile.
VIPA anticipates that the $.25 one-way fee will generate approximately $500,000 in annual revenues. This fee will be used to recoup construction costs and maintenance of the new ferry and cargo facility at Red Hook, St. Thomas. In September 2007, VIPA completed the Urman V. Fredericks Marine Terminal – which replaces what was once an under-developed marine facility with an aging dock. A new dock was constructed, along with a new 9,500 square-foot terminal which houses the ferry ticket counters, a bar, food vendors and other stores and comfortable waiting areas inside and outside the terminal. VIPA built a new roll-on/roll-off cargo dock, created additional parking spaces and a new passenger pick-up area, improved landscaping and built a pedestrian walkway along the main road. VIPA also plans to repair and utilize the old dock at this facility. The $10.5 million project was financed in part by Federal Highway Administration GARVEE Bonds ($2.5 million) and a grant from the Federal Economic Development Administration ($1.5 million). The remainder was funded by the Port Authority.
On St. John, the Theovald E. Moorehead Marine Facility at Enighed Pond was constructed to alleviate chronic traffic congestion in Cruz Bay due to a significant increase in the importation of cargo and construction materials to St. John. This cargo dock was constructed using federal funds (GARVEE Bonds) totaling $16 million. All St. John cargo traffic is now handled at this facility. VIPA plans to erect a terminal to accommodate the traveling public by providing amenities such as food vendors and public bathrooms at this facility. While this facility was constructed using federal funds, the Authority must maintain and operate it using its own funds.
In addition, VIPA is currently in the process of developing a design for a new ferry passenger facility at the Victor Sewer Marine Facility (known as "The Creek"), and we also plan to resurface the existing dock at the Loredon Boynes facility in Cruz Bay during 2009. These improvements will also be funded by revenues generated by the Authority.
Furthermore, the Port Authority is faced with a $4.7 million deficit as of June 2008. With the rapidly escalating costs of our utility and security expenses, we expect our operating loss to be almost $8 million by September 30th. VIPA must generate enough revenues to meet its debt service, federal security mandates and other operating costs.
It is important that the public understands that user fees help us to maintain our facilities so that we can continue to provide a safe and pleasant travel experience and to meet our financial responsibilities. However, your concerns are important to us. We will announce the date of a public meeting that will be held to provide a forum for the community to address this issue.
Editor's note: Kenn Hobson is interim executive director of the Virgin Islands Port Authority.
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