March 25, 2009 — With staggering expenses and reduced revenues, the V.I. Port Authority board Wednesday looked at a number of measures to reduce expenses.
With total operating expenses at $17.6 million for January 2009 and revenues at $14.6 million, operating losses stood at $3 million for the month. The current operating loss has increased by 52 percent over last year.
One bright spot is that expenses decreased over the same period last year by 3.85 percent.
The shortfall for the fiscal year amounts to $1.6 million, according to a report delivered by Kenn Hobson, the authority's executive director.
By the end of January, the authority should have generated 33.3 percent of the authority's total annual revenue, but only 30 percent had been realized, leaving a shortfall of 3.3 percent, the report said.
The shortfall is due to the drop in enplanements and cruise-ship passengers to the territory.
"Due to this trend, VIPA must ensure that its operating expenses are reduced and/or its revenues are increased," Hobson said.
Based on the report's recommendation, the board approved negotiating a 12-hour shift (down from a 20-hour shift) for marine pilots and marine-related activities. Overtime for these activities came to more than $270,380 as of Jan. 31. In addition, the authority is reviewing adopting a staggered schedule for other personnel, including maintenance staff.
VIPA has also made efforts to reduce its energy costs, replacing a number of light fixtures with energy-efficient bulbs. Actual utility costs for the period ending in January came in $742,420 under budget estimates, Hobson said.
The report also recommended deferring a number of capital projects at the Loredon Boynes Dock on St. John, the dredging at the Crown Bay Cruise Ship dock and the ARFF building at Henry E. Rohlsen Airport.
The board deferred any action on raising rates at its docks, despite the fact that docking fees in the British Virgin Islands are more than $1 higher per foot than the rate VIPA charges. The board also deferred decision on implementing fees for cruise ships coming to St. Croix. A motion to raise the rates for the upcoming year was withdrawn.
"I don't subscribe if we are giving away the barn," board member Gordon A. Finch said. "At some point we have to stop giving away the barn."
The board is also working to collect the existing fees and debts.
"We have collected over $800,000 just this month alone," said Denise Mills, property management director.
The authority also plans to go to the V.I. government for $4.2 million the government has collected for fees and dues from cruise ships on behalf of the authority and which has not been forthcoming.
In the future, the authority plans to collect this money itself.
"I will take it up with the government that we will collect the money directly," said Cassan Pancham, who chairs the board.
The board approved plans to talk to the appropriate unions about the need to reduce costs and also approved plans to reduce the employee rewards activities to luncheons on St. Croix and St. Thomas. In addition, employees will be offered only one ham or turkey during the holiday season.
The board approved a second addendum for dredging in Crown Bay for an area of 2700 cubic yards to a depth of 32 feet in front of the Crowley cargo dock area, allowing vessels to moor closer. The cost would amount to $3 per cubic yard. Funding for this project was set in the FY 2009 budget in the amount of $193,617, according to Engineering Director Dale Gregory.
The sole-source contract brought some discussion of red flags for auditors, but prices are consistent with previous contracts, according to Finch.
The board also approved a $50,000 expenditure for turnstiles and token-dispensing machines for the Red Hook Ferry Terminal. The three stainless-steel turnstiles and one handicapped-accessible turnstile will count ferry passengers leaving Red Hook, as well as collect the authority's usage fee at the terminal.
The turnstiles will be installed at the exit where passengers leave the building before going down the steps to the ferry. The order will be placed Thursday morning, according to Gregory.
The fees collected by turnstiles are actually included as revenue in the FY 09 budget for $166,000.
In other action, the board approved a lease of 2,600 square feet to the Department of Public Works at the rate of $18 per square foot.
The board approved sending a letter offering 1.3 acres on St. John to the V.I. Waste Management Authority. The property is currently occupied by VIWMA for sewage treatment, and VIWMA has requested additional adjacent property.
The board also directed Attorney Mills to communicate with the principals of BHE Development. The company has expressed an interest in leasing land in Betty's Hope.
The board approved allowing SeaFlight VI to operate for one year from its hangar before moving into HERA.
The board received application from Silver and Pearl Land for selling silver and gold jewelry from a kiosk in Crown Bay Center.
The authority also approved amendments to a lease with Skagway Jewelry Company to provide for a payment plan for $50,000 in back rent that was acquired when the company assumed the lease from Blue Island Divers. The company also requested an amendment that would allow it to sell general retail items including jewelry, watches, gifts, T-shirts and souvenirs, but this request was not granted on the basis of conflict with other retailers.
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