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Rising Costs Prompt VIPA Board to Scale Back Hiring

Sept. 17, 2008 — When it comes to increasing expenditures, the V.I. Port Authority is in the same boat with everyone else: Costs are on the rise.
Wednesday's board meeting went over VIPA's monthly finances and its 2009 fiscal year budget, as well as property and personnel issues.
Operating expenditures for July increased by $5.7 million, a 14-percent increase over the same period for 2007. While revenues stood at $39.8 million, an increase of seven percent over July of last year, the operating loss exceeded last year's losses by 78.71 percent.
For the month of July, VIPA's utilities increased by $276,869 over July 2007.
The current finances haven't diminished board optimism for the FY 2009 budget, projected at $66.3 million. This figure is financed primarily through VIPA's revenues, estimated at $50.2 million, and federal grants, estimated at $16.1 million.
If VIPA spends according to the adopted budget, there will be a resultant increase in assets, according to board member Gordon Finch.
"We are going to at least balance the budget or have a small net surplus," said Cassan Pancham, the VIPA board's chairman. "Beyond that we have to see how things evolve next year. We've been fairly conservative with some of the revenue projections."
The budget's most prominent features were clampdowns on hiring and promotions, as well as implementation of an employee buy-in of 20 percent for health insurance. VIPA had been paying 100 percent of employees' health insurance.
There will be no new positions added to the 326 employees on the current payroll in the Fiscal Year 2009 budget. Earlier this year the board approved advertising a number of positions, but under the new budget less than a handful of positions in the final stages of hiring will be brought on board.
"When we approved these we didn't know that American was going from nine flights to three," Finch said. "It's a different ballgame."
Expressing some doubts about the projected figures for utilities, which account for 17 percent of the new budget's total expenditures, Judith James, director of administration and finance, suggested a mid-year review.
"We do not have a full grasp on what it is [utility expenses] for 2009 — we suggest that in the first four to six months we revisit the budget," James said. "Utility [expenses] have been changing drastically."
In other action Wednesday, Tropical Shipping requested assistance from VIPA to resolve a pending dredging project on St. Thomas. The authority has followed up on the project by working to secure DPNR permits for the action, and approval is anticipated by the end of next week.
The board also got a look at a new master airport plan for Henry E. Rohlson Airport. The plan, which VIPA sends to those interested in using the airport, had not been updated in more than 10 years, according to Kenn Hobson, VIPA's interim executive director.
In addition to layout, the plan includes wind conditions, obstruction heights and sizes of the various terminals.
"This is a key document," Finch explained. "The Federal Aviation Administration doesn't fund anything that doesn't appear on the plan."
Pending review by the authority's staff and the FAA, the plan will be sent back to designers Post, Buckley, Schuh and Jernigan for revisions before becoming official.
The board also approved money for a FEMA-funded hurricane shelter at the airport. The contract went to Stephen E. Hutchins Architects and BioImpact.
The board also approved another award to Stephen Hutchins for designing modifications to TSA's offices at the airport.
In other business, the board approved changes to three leases.
Tropex, a St. Croix watch manufacturer, will reduce its leased space and shorten the period required for lease cancellation from the authority.
A March 7 letter from the company stated, "After 24 years in business, we are facing a decision whether or not we will continue our watch-manufacturing operation on St. Croix. In 2007 our sales were at the lowest and the expenses at the highest. It is imperative that we have to save and reduce our overhead cost if we want to stay in business."
Total Petroleum Puerto Rico has been approved to take over the Esso lease at Lindberg Bay. The station provides fuel at the airport for aviation use.
Skagway Jewelry Company will take over the lease held by Blue Islands Divers at Crown Bay Center. The company will sell casual clothing, souvenirs and gift items.
Seven of VIPA's nine board members attended Wednesday's meeting: Finch, Attorney General Vincent Frazer, Tourism Commissioner Beverly Nicholson-Doty, Pancham, Public Works Commissioner Darryl A. Smalls and Hector Peguero.
Robert O'Connor, whose term of service to the board has expired, also attended, but as an observer. He did not participate in discussions or voting. O'Connor is in the process of being reconfirmed to the board by the Senate.
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