The Virgin Islands Port Authority board this week approved its 2010 budget and went over its current financial position.
Meeting on St. Croix, the board approved its 2010 budget of $77 million, based on projected operating revenue of $34 million, and $27 million expected in federal grants and entitlements. The board budgeted $38 million for capital improvements to the authority’s public ports and infrastructure.
Other budgeted expenses include $956,475 for major equipment, $3.6 million to cover debt service and $34 million for operating expenses.
The budget reflects a 16.1-percent increase over the FY 2009 budget of $66.3 million – primarily due to a $12.5 million increase in the Port Authority’s capital projects budget, countered by a $1.5 million decrease in operating expenses, according to a release from the authority.
To counteract the projected decrease in revenues, the budget renews the authority’s freezes on hiring and salary increases. It also seeks to institute an employee medical cost sharing policy; which they had not been able to implement in 2009 due to contractual issues. The budget also offers qualifying employees a voluntary severance plan for early retirement.
The budget incorporates new operational procedures to reduce energy and water costs as well as fees for all services provided by the Port Authority.
The board reviewed the Authority’s financial report for the period ending July 1, which again showed losses for the authority; revenues for that month were $37.6 million, down 6.5 percent over July 2008. Total operating expenses for the period were $45 million, with an operating loss of $7,488,542.
While 50,000 fewer passengers flew in and out of the territory from October 2008 to July 2009 than did in the same period the previous year, it is the decline in cruise passenger numbers that really has the authority concerned.
The number of cruise ship passengers in 2009 declined roughly 20 percent from the same the period in 2008.
In the period ending July 2008, the number of cruise ship passengers docking at St. Thomas was 1.67 million. For the same period ending in July 2009, that number had dropped to 1.3 million, a decline of 341,960.
"The decrease impacts the marine revenues of the authority extensively and the overall revenues of the Authority," the monthly financial report noted.
Addressing overdue obligations to the authority, the property management department reported that $1.94 million is more than 31 days overdue from its lessees.
The Property Management department has collected $2 million between August 11 and September 10 in debts owed longer than 30 days, Denise Mills, director of the department reported. The department will continue to seek all outstanding amounts owed through continued correspondence and meetings with tenants and by referring bad accounts to the authority’s legal department to seek court orders to force payment of outstanding debts.
One of these debts is owed by a V.I. government agency, the Department of Planning and Natural Resources, which owes $244,424.
Companies with aging debts of more than $100,000 for longer than 31 days to the authority include:
• US Airways, $110,384.
• Four Star Air Cargo, $133,049. The monthly report to the board of directors showed that this debt has progressed to legal action and a court decision is pending following arguments from the authority’s legal counsel.
• Executive Airlines/American Eagle, $110,944, and an additional $162,901 on obligations more than 90 days overdue.
• Stanford Acquisition – the financial services company which is been placed into receivership owes the Port Authority $335,609. No response from the receiver has been forthcoming.
• V.I. Water and Power Authority, $203,314
• Carnival Cruises, $455,642
• Wesk Marine, $114,027
• Delta Airlines, $134,490
