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Charlotte Amalie
Saturday, June 22, 2024
HomeNewsArchivesU.S. Customs Owes V.I. Port Authority Millions

U.S. Customs Owes V.I. Port Authority Millions

Meeting Wednesday at its St. Thomas headquarters, the V.I. Port Authority board learned that a $7 million debt owed to the authority may have serious implications for upcoming independent audits and could factor in bond ratings.
The item “jumped out” from a report at the board’s finance committee meeting, according to Attorney General Vincent Frazer.
At issue are wharfage and tonnage fees collected by U.S. Customs and Border Protection. The federal agency is authorized under a 1994 agreement to collect operating costs from these fees before turning the funds over to the V.I. government. However coincidental with the Customs service coming under the purview of mega-agency Homeland Security, the operating costs escalated by over 80 percent.
The Port Authority’s records show that it is owed $7 million from fees collected.
The talk around the boardroom brought the matter into broad perspective, including its potential impact on VIPA’s bond ratings.
“The auditors have begun to question that $7 million accounts receivable,” board member Gordon A. Finch said. “It may show up as an exception or as a debt that cannot be collected…. This board member wants to say that we cannot continue to carry this debt that cannot be collected.”
The matter is being looked into by the governor’s office.
Due to the potential impact on the authority’s Crown Bay and Red Hook bonds, the matter was referred to executive session under an exemption in the the Sunshine Act related to information that would lead to financial speculation or endanger the stability of any financial institution, according to General Counsel Don C. Mills.
Turning its attention to other financial issues, the board learned that the authority had another favorable month in terms of revenue, earning $10.9 million with an overall increase of over four percent over January of 2009. Expenditures for the same period were $12.5 million, down by over 1 percent.
Maximizing efficiency and working to minimize expense, airlines working with the authority are now using the authority’s self-invoicing system, eliminating 10 days from the billing period, according to Property Manager Denise Mills.
The authority will be meeting with major airlines later this week to go over the airlines’ concerns, as well as informing the airlines as to the Authority’s initiatives.
The meeting, to be led by board member and VI Tourism Commissioner Beverly Nicholson-Doty, will also address increasing passenger facility charges, from $3 to $4.50 for Cyril E. King Airport and implementing a $3 fee at Henry E. Rohlsen Airport. The authority will need the airlines’ support to get approval for the fees from the Federal Aviation Administration.
In addition to getting support for the fees, board member Gordon A. Finch urged specificity for explaining the authority’s plan for the baggage solution and urged all staff attending to be fully aware of estimated costs.
“This is a chance to showcase to our partners,” Nicholson-Doty said. “This is a good show-and-tell for the Port Authority – if you are making demands on us, we cannot get there without funding.”
In other actions, the board directed staff to investigate a proposal to turn the second floor of Cyril E. King Airport into a retail mall.
The board approved a request from the V.I. Taxi Association to create a sublet for its space at King airport. The board made its decision despite the Taxi Association’s outstanding and disputed water charges, and previous subletting without authority approval.
The board also approved two change orders at the newly opened restrooms at Lingbergh Bay—over the objections of board member Yvonne E. L. Thraen to the circumvention of the accepted procedure for approving change orders.
Responding to Thraen’s questions regarding the nature of the circumvention, Executive Director Kenn Hobson said that the drive for the lifeguard’s equipment building came from the “mover” of the legislation, referring to Sen. Celestino White. Hobson indicated that funds for the additional expense would be covered by an additional $50,000 allocation from the Legislature.
At present a sign directly in front of the restrooms at Lindbergh indicates that no lifeguard is on duty.
“An expression of the mover should not be considered a guarantee.” Thraen countered.
The two additional change orders for the facilities totaled nearly $40,000.
Board members present also included Chairman Cassan Pancham, Labor Commissioner Albert Bryan Jr., Robert O’Connor Jr., Public Works Commissioner Darryl A. Smalls and Hector Peguero.

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