While the Virgin Islands Port Authority’s finances are reeling from reduced revenues and as it tightens its belt by reducing its expenditures and leaning on those that owe it money, its biggest debtor is the Virgin Islands government itself.
At a Wednesday meeting of the authority’s governing board at its St. Thomas headquarters, the board reviewed its current finances, projects and property status.
The board also took the first steps for establishing its 2010 budget.
Tourism Commissioner Beverly Nicholson-Doty stressed the need for a prompt meeting of the finance committee to come up with specific guidelines for staff.
The authority is feeling the pain of the broader Virgin Islands tourism-dependant economy, with 46,514 fewer air visitors between October and May than the previous year and for this May, 250,000 fewer cruise ship passengers than the previous year, just for St. Thomas.
Operating revenues for May were $30,346,581, a 10.47-decrease over last year. The decrease was partially offset by a 3.83 percent reduction of expenditures over the same period last year. May operating expenditures were $35,632,696.
Salaries and wages increased over budget projections by $91,962 due to the authority still paying 100 percent of its employees’ medical insurance. VIPA’s board last year voted to require a 20 percent participation from employees, but the move has yet to be implemented and is pending contract negotiations with the five bargaining units at VIPA.
While the revenue and expenditure numbers are down and employee expenses are up, what really hurts the bottom line are the outstanding accounts receivables.
The local government has collected some $5.4 million in wharfage and tonnage fees belonging to the Port Authority between January 2008 through May 2009. The fees are collected by Customs, which extracts their costs and then forward the remainder to the V.I. government, according to Executive Director Kenn Hobson and Judith James, VIPA’s director of administration and finance.
The $5.4 million has not been turned over to the authority and its board has directed Hobson to communicate with V.I. Dept of Finance Commissioner Angel Dawson about the funds owed.
"The government made an agreement with Customs," Hobson said. "The Port Authority was never a party to that contract."
The $5.4 million outstanding impacts the authority, not just in cash flow, but in other revenue areas, such as interest income, according to the authority’s financial report.
"I will be giving him (Dawson) a call next week," Hobson said.
Dawson did not return a call to the Source for this story.
The proposed dredging of Charlotte Amalie Harbor to accommodate Genesis-class cruise ships is in the final permitting stages, according to Engineering Director Dale Gregory.
The final hurdle is approval from the Army Corps of Engineers, Gregory said.
Gregory added that dredging in St. Thomas’s Gregerie East Channel had encountered a softer material in the area where bedrock was expected. The difference in the material to be removed resulted in a cost reduction from $150 per cubic yard to $75 per cubic yard. VIPA had created a "rock clause" if dredging encountered materials significantly more difficult to remove than the typical bottom material of the channel.
While easier to dredge than rock, the coral-like material that was removed still took considerably more work than the typical bottom material of the channel.
"It is the same equipment," Gregory said, "It is more involved, and more effort and we have to move more material."
In other actions, the board approved:
• A proposal from ADP Sectuity Systems Virgin Islands, Inc. for $62,129 to extend the warranty for existing security systems at Cyril E. King Airport and Henry E. Rohlsen Airport.
• A proposal from Guardian Protection Systems for replacement and repairs to concrete light poles and cameras at marine facilities in the amount of $48,674.
• A proposal by URS Caribe LLP for overlay construction engineering services at CEKA in the amount of $513,700. The funding for the project, which will rehabilitate and relight runway 10-28, will be paid 95 percent by funds from the Federal Aviation Administration, and five percent by VIPA.
• A request from O’Neale’s Trucking and Transport for an inspection station at the Wilfred "Bomba" Allick marine facility.
• Engaging a real estate appraiser to value its unimproved property at Enighed Pond on St. John, in preparation for sale to the V.I. Waste Management Authority. The request from VIWMA also included a request to use the parcel prior to the sale as a collection point for an aluminum recycling project.
• A request from V.I. Ground Handlers to continue to occupy office space CEKA that it uses to conduct passenger, aircraft and ramp service.
The board declined to act on a request to re-assign a lease currently held by Deliver It, Inc. to Caribtrans Agency. Deliver It is in arrears with VIPA, which has a policy preventing alterations to companies with outstanding balances with the authority.
The board also declined to act on a request for a 10-year lease from the Virgin Islands Retired Police Organization to occupy a building at Bournefield.
Objecting to the length of the lease, board member Gordon Finch noted that the building, which is in disrepair, should be demolished rather than committed to a purpose for that length of time.
Board members Gordon Finch, Attorney General Vincent Frazer, Tourism Commissioner Beverly Nicholson-Doty, Robert O’Connor and Yvonne E.L. Thraen attended the meeting.
Board members Albert Bryan, Cassan Pancham, Hector Peguero and Public Works Commissioner Darryl A. Smalls were absent.
