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Charlotte Amalie
Saturday, August 13, 2022
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Money Matters and Ferry Boats

Dear Source:
In reference to the Source article on the possibility of receiving ferry boat funds from the federal government, it is not a possibility, it has already occurred. DPW applied for and was granted the sum of $652,346 from a 2008 appropriation. That money was slated to fund the purchase of two new or refurbished 347 passenger ferry boats to be used on federal route 32M (the Red Hook to Cruz Bay, Pillsbury Sound route). The VI government, to date, has yet to pick up that free federal check from the FHA. Now, the governor has asked for an additional $750,000 out of the stimulus funds and in all likelihood will have another ferry boat award for 2009.
Further, additional stimulus money, on top of the ferry boat money, is available and can be applied for and used to fund other projects, like the Cruz Bay "creek" rehabilitation. Cruz Bay desperately needs to upgrade its facilities and this stimulus package is the perfect way to get it done. In most instances, federal funds are awarded at some value lower than the requested amount. Not so with stimulus money as they are intended to fund 100% of the project cost. It is unclear whether or not the VI government missed the boat (sic) on that ferry terminal request as it was due the 3rd week in May. We do know that DPW applied for ferry boat money on time.
In the past, the Port Authority chose to float $16 million in GARVEE bonds rather than use grant money to pay for all of the Enighed Pond (St. John) barge terminal and an additional $2.5 million towards the cost of the new Red Hook ferry terminal (Total cost $10.6 million). That money has to be paid back to investors with dividends. If the PA chose the grant route (although competitive) and won, those projects would have been paid for by now. As it is, the PA literally gave up its rights to future FHA funds by going with GARVEES.
The federal government, through the Federal Highway Administration, does have a separate ferry fund which can be used to fund only the "construction" of ferry boats and ferry docks. This means that boats can be bought, built or repaired and docking terminals can be built. None of these moneys are intended to be placed into the general funds of the VI government as they are awarded based on a specific need and must be used for the particular purpose. That purpose, in the case of the recent grant award and application, are for ferry boats and cannot be used for ferry boat operational expenses or for use on surface roadways as the Source article tended to allude to.
In the Virgin Islands, unlike anywhere else, private companies have exclusive rights to run ferry operations by law. Normally, and under federal law, the government is required to run the operation but may contract out the actual operation of the service (i.e. the sailing of and perhaps ownership of the vessels). Under no scenario does the federal government allow a private entity to apply for, or receive, ferry boat grants; only the VI government can. In fact, federal law requires the government to own the operation 100%. The Virgin Islands law which gave away that right to private companies would then be in opposition to federal law as soon as the VI accepts one dime of the federal ferry boat money. What can be done?
The VI government, as soon as the federal money is received, should purchase the new boats thus relieving the ferry companies of this burden. This would greatly reduce operational costs as the ferry service providers now only have to "sail" the vessels and would have no maintenance or fuel costs-the government would take that responsibility. The Port Authority, by right, and as a public entity, should be the only government agency which sells and counts tickets. Also, using an automated ticketing system would go a long way toward accountability. This would further reduce the operational costs for the ferry boat operators. Since the ferry service is now newly subsidized, ticket prices will go down. Ticket sales would then be public funds and government oversight would then be mandatory. Also, the PSC would have a far easier job of establishing fair rates for passengers.
It's time the VI government took back the responsibility of running public services. That responsibility should never have been contracted away.
Paul Devine
St. John

Editor's note: We welcome and encourage readers to keep the dialogue going by responding to Source commentary. Letters should be e-mailed with name and place of residence to visource@gmail.com.

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Dear Source:
In reference to the Source article on the possibility of receiving ferry boat funds from the federal government, it is not a possibility, it has already occurred. DPW applied for and was granted the sum of $652,346 from a 2008 appropriation. That money was slated to fund the purchase of two new or refurbished 347 passenger ferry boats to be used on federal route 32M (the Red Hook to Cruz Bay, Pillsbury Sound route). The VI government, to date, has yet to pick up that free federal check from the FHA. Now, the governor has asked for an additional $750,000 out of the stimulus funds and in all likelihood will have another ferry boat award for 2009.
Further, additional stimulus money, on top of the ferry boat money, is available and can be applied for and used to fund other projects, like the Cruz Bay "creek" rehabilitation. Cruz Bay desperately needs to upgrade its facilities and this stimulus package is the perfect way to get it done. In most instances, federal funds are awarded at some value lower than the requested amount. Not so with stimulus money as they are intended to fund 100% of the project cost. It is unclear whether or not the VI government missed the boat (sic) on that ferry terminal request as it was due the 3rd week in May. We do know that DPW applied for ferry boat money on time.
In the past, the Port Authority chose to float $16 million in GARVEE bonds rather than use grant money to pay for all of the Enighed Pond (St. John) barge terminal and an additional $2.5 million towards the cost of the new Red Hook ferry terminal (Total cost $10.6 million). That money has to be paid back to investors with dividends. If the PA chose the grant route (although competitive) and won, those projects would have been paid for by now. As it is, the PA literally gave up its rights to future FHA funds by going with GARVEES.
The federal government, through the Federal Highway Administration, does have a separate ferry fund which can be used to fund only the "construction" of ferry boats and ferry docks. This means that boats can be bought, built or repaired and docking terminals can be built. None of these moneys are intended to be placed into the general funds of the VI government as they are awarded based on a specific need and must be used for the particular purpose. That purpose, in the case of the recent grant award and application, are for ferry boats and cannot be used for ferry boat operational expenses or for use on surface roadways as the Source article tended to allude to.
In the Virgin Islands, unlike anywhere else, private companies have exclusive rights to run ferry operations by law. Normally, and under federal law, the government is required to run the operation but may contract out the actual operation of the service (i.e. the sailing of and perhaps ownership of the vessels). Under no scenario does the federal government allow a private entity to apply for, or receive, ferry boat grants; only the VI government can. In fact, federal law requires the government to own the operation 100%. The Virgin Islands law which gave away that right to private companies would then be in opposition to federal law as soon as the VI accepts one dime of the federal ferry boat money. What can be done?
The VI government, as soon as the federal money is received, should purchase the new boats thus relieving the ferry companies of this burden. This would greatly reduce operational costs as the ferry service providers now only have to "sail" the vessels and would have no maintenance or fuel costs-the government would take that responsibility. The Port Authority, by right, and as a public entity, should be the only government agency which sells and counts tickets. Also, using an automated ticketing system would go a long way toward accountability. This would further reduce the operational costs for the ferry boat operators. Since the ferry service is now newly subsidized, ticket prices will go down. Ticket sales would then be public funds and government oversight would then be mandatory. Also, the PSC would have a far easier job of establishing fair rates for passengers.
It's time the VI government took back the responsibility of running public services. That responsibility should never have been contracted away.
Paul Devine
St. John

Editor's note: We welcome and encourage readers to keep the dialogue going by responding to Source commentary. Letters should be e-mailed with name and place of residence to visource@gmail.com.