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HomeNewsArchivesSenators Unsure How to Consolidate WICO, VIPA

Senators Unsure How to Consolidate WICO, VIPA

While there was no dispute Tuesday that management of the local ports needs to be more efficient, senators said they were unsure how to do that with a combined V.I. Port Authority/West Indian Co. Ltd., given some of the challenges both agencies are currently facing.

A bill to transfer ownership of WICO to the Port Authority debuted during Tuesday’s meeting of the Economic Development, Technology and Agriculture Committee — less than two months after Gov. John deJongh Jr. laid out his plans for the consolidation in his annual State of the Territory address.

But while senators said there is a great need to cut down on the duplication of services provided by the two entities, they also said the proposal has several unknown variables, such as how the new agency would be run and who could get the job done better.

At the beginning of the meeting, it seemed senators were lauding WICO’s accomplishments, saying that the agency had been able to turn a profit while VIPA appeared mired in conflict. For Sen. Louis P. Hill, one of the major issues was the authority’s inability to collect on its debts — a problem acknowledged by VIPA Executive Director Kenn Hobson, who spoke Tuesday about a $10 million receivable from U.S. Customs and Border Protection, and rent owed by both Planning and Natural Resources and the V.I. Water and Power Authority.

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Senators were further bewildered when VIPA legal counsel Don Mills explained that it took the authority four years to get a hold on the situation with Customs, and only last week gained control over its fee collections—after working with deJongh and Customs officials in Puerto Rico—by simply renaming the fees Customs used to collect, from "wharfage and tonnage" to "harbor and port use" fees.

"This, I hope, is an opportunity to make this entire port operation more efficient, more effective," Hill said later. "Because if that is not the final outcome, then it is absolutely not necessary for us to do this."

Later in the hearing, however, WICO also came under fire, with senators saying that the agency had not paid its contribution to the General Fund — a payment in lieu of taxes — for at least the past couple years. Further, a letter read into the record by Sen. Carlton "Ital" Dowe revealed that WICO’s role as the ship’s agent for several of the major cruise lines — including Carnival and Royal Caribbean — had been turned over to Virgin Port Services.

"Factually, since all of the calls during the summer are either from Carnival Cruise Lines or from Royal Caribbean Cruise Lines, we would have no work for that entire period," WICO head Edward Thomas Sr. wrote in a recent letter to United Industrial Workers Vice President Eugene Irish. "As we further review going forward from Oct. 1, 2011, we would be limited to one or two agency workdays at best."

Thomas had given notice that he would not be able to attend Tuesday’s hearing, so committee chairman Sen. Shawn-Michael Malone said he would arrange another meeting where Thomas could testify and explain what was going on within the agency.

Thomas did, however, send a letter laying out some of his concerns with the merger, which, among other things, discuss:
-maintaining WICO employees’ private pension plans, since they have not been covered under the Government Employees’ Retirement System;
-absorbing non-union employees into the new Port Authority system;
-whether transferring all of WICO’s stock from the Public Finance Authority — WICO’s parent company — to VIPA would result in any savings for the government; and
-whether transferring all of WICO’s assets to the Port Authority include its property on Denmark Hill.

Senators and port officials were also unsure if VIPA would take over management of the Havensight Mall, which WICO currently handles for GERS. Port Authority board chairman Robert O’Connor said he was not sure about the details but "did not think" the port would want to "manage a mall."

If the bill is signed into law, the Port Authority would get 120 days to figure out how the agency will be structured. Hobson said during that time, a group of VIPA, WICO, PFA and GERS representatives would be meeting to determine the best way to run the new agency.

A final question raised by Malone was what would happen to WICO after the merger is complete, since the bill makes no provisions to dissolve the agency.

"The devil is in the details," he said before adjourning the meeting. Malone suggested that the Senate play a bigger role in fleshing out the bill and possibly setting up a structure or helping to put individuals in place "who can do the job" and run the agency.

Legislative legal counsel Yvonne Tharpes commented later that since the bill is silent as to how the new agency would be put together, officials would have to defer to the existing statute that sets up the Port Authority, which includes a single entity governed by a board and run by an executive director.

The bill was held in committee for further discussion.

In other news, senators passed a bill appropriating $2 million from the Tourism Revolving Fund during fiscal year 2011 to "exclusively advertise St. Croix as a tourist destination."

While Tourism Commissioner Beverly Nicholson-Doty said she supported the intent of the bill, she urged senators to be cautious in setting a specific dollar amount for appropriation, in case revenues projected to come into the fund are lower than expected. Nicholson-Doty said the source for the fund is hotel occupancy tax collections, which range from approximately $15 million to $18 million in a given year.

While senators argued that Tourism spends about $2 million on St. Croix advertising anyway, Nicholson-Doty suggested that the bill be amended to include an amount "up to" $2 million, which would give the department some flexibility when appropriating money.

Though the bill only appears to make a single appropriation for FY 2011, bill sponsor Sen. Alicia "Chucky" Hansen said her intent was to create a continuous appropriation so that "something would always be earmarked" for St. Croix.

Senators moved the bill onto the Rules and Judiciary Committee for further consideration.

Present during Tuesday’s hearing was Sens. Craig W. Barshinger, Dowe, Hill, Hansen, Malone, Terrence "Positive" Nelson, Usie R. Richards, Janette Millin-Young and Patrick Simeon Sprauve.

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While there was no dispute Tuesday that management of the local ports needs to be more efficient, senators said they were unsure how to do that with a combined V.I. Port Authority/West Indian Co. Ltd., given some of the challenges both agencies are currently facing.

A bill to transfer ownership of WICO to the Port Authority debuted during Tuesday's meeting of the Economic Development, Technology and Agriculture Committee -- less than two months after Gov. John deJongh Jr. laid out his plans for the consolidation in his annual State of the Territory address.

But while senators said there is a great need to cut down on the duplication of services provided by the two entities, they also said the proposal has several unknown variables, such as how the new agency would be run and who could get the job done better.

At the beginning of the meeting, it seemed senators were lauding WICO's accomplishments, saying that the agency had been able to turn a profit while VIPA appeared mired in conflict. For Sen. Louis P. Hill, one of the major issues was the authority's inability to collect on its debts -- a problem acknowledged by VIPA Executive Director Kenn Hobson, who spoke Tuesday about a $10 million receivable from U.S. Customs and Border Protection, and rent owed by both Planning and Natural Resources and the V.I. Water and Power Authority.

Senators were further bewildered when VIPA legal counsel Don Mills explained that it took the authority four years to get a hold on the situation with Customs, and only last week gained control over its fee collections—after working with deJongh and Customs officials in Puerto Rico—by simply renaming the fees Customs used to collect, from "wharfage and tonnage" to "harbor and port use" fees.

"This, I hope, is an opportunity to make this entire port operation more efficient, more effective," Hill said later. "Because if that is not the final outcome, then it is absolutely not necessary for us to do this."

Later in the hearing, however, WICO also came under fire, with senators saying that the agency had not paid its contribution to the General Fund -- a payment in lieu of taxes -- for at least the past couple years. Further, a letter read into the record by Sen. Carlton "Ital" Dowe revealed that WICO’s role as the ship's agent for several of the major cruise lines -- including Carnival and Royal Caribbean -- had been turned over to Virgin Port Services.

"Factually, since all of the calls during the summer are either from Carnival Cruise Lines or from Royal Caribbean Cruise Lines, we would have no work for that entire period," WICO head Edward Thomas Sr. wrote in a recent letter to United Industrial Workers Vice President Eugene Irish. "As we further review going forward from Oct. 1, 2011, we would be limited to one or two agency workdays at best."

Thomas had given notice that he would not be able to attend Tuesday's hearing, so committee chairman Sen. Shawn-Michael Malone said he would arrange another meeting where Thomas could testify and explain what was going on within the agency.

Thomas did, however, send a letter laying out some of his concerns with the merger, which, among other things, discuss:
-maintaining WICO employees' private pension plans, since they have not been covered under the Government Employees' Retirement System;
-absorbing non-union employees into the new Port Authority system;
-whether transferring all of WICO's stock from the Public Finance Authority -- WICO's parent company -- to VIPA would result in any savings for the government; and
-whether transferring all of WICO's assets to the Port Authority include its property on Denmark Hill.

Senators and port officials were also unsure if VIPA would take over management of the Havensight Mall, which WICO currently handles for GERS. Port Authority board chairman Robert O'Connor said he was not sure about the details but "did not think" the port would want to "manage a mall."

If the bill is signed into law, the Port Authority would get 120 days to figure out how the agency will be structured. Hobson said during that time, a group of VIPA, WICO, PFA and GERS representatives would be meeting to determine the best way to run the new agency.

A final question raised by Malone was what would happen to WICO after the merger is complete, since the bill makes no provisions to dissolve the agency.

"The devil is in the details," he said before adjourning the meeting. Malone suggested that the Senate play a bigger role in fleshing out the bill and possibly setting up a structure or helping to put individuals in place "who can do the job" and run the agency.

Legislative legal counsel Yvonne Tharpes commented later that since the bill is silent as to how the new agency would be put together, officials would have to defer to the existing statute that sets up the Port Authority, which includes a single entity governed by a board and run by an executive director.

The bill was held in committee for further discussion.

In other news, senators passed a bill appropriating $2 million from the Tourism Revolving Fund during fiscal year 2011 to "exclusively advertise St. Croix as a tourist destination."

While Tourism Commissioner Beverly Nicholson-Doty said she supported the intent of the bill, she urged senators to be cautious in setting a specific dollar amount for appropriation, in case revenues projected to come into the fund are lower than expected. Nicholson-Doty said the source for the fund is hotel occupancy tax collections, which range from approximately $15 million to $18 million in a given year.

While senators argued that Tourism spends about $2 million on St. Croix advertising anyway, Nicholson-Doty suggested that the bill be amended to include an amount "up to" $2 million, which would give the department some flexibility when appropriating money.

Though the bill only appears to make a single appropriation for FY 2011, bill sponsor Sen. Alicia "Chucky" Hansen said her intent was to create a continuous appropriation so that "something would always be earmarked" for St. Croix.

Senators moved the bill onto the Rules and Judiciary Committee for further consideration.

Present during Tuesday's hearing was Sens. Craig W. Barshinger, Dowe, Hill, Hansen, Malone, Terrence "Positive" Nelson, Usie R. Richards, Janette Millin-Young and Patrick Simeon Sprauve.