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VIPA Cuts Budget to Cut Losses

July 21, 2005 – The V. I. Port Authority board approved a dramatically reduced fiscal year 2006 budget at its Wednesday meeting. The FY 2006 $53.5 million budget is cut by more than a quarter from its $72 million FY 2005 budget.
Darlan Brin, VIPA executive director, told the board the cuts had to be made because of the "rising costs of personnel services, heath insurance and utilities." Brin said these concerns "continue to burden this agency, in spite of measures instituted to contain costs."
Reading from a prepared statement, Brin called the FY 2006 budget "constrained." He said the agency has experienced "financial losses amounting to millions of dollars over the past several years.
Although these losses have decreased in the past two years, Brin said, the cuts must be made. Bearing the brunt of the cuts will be capital projects and salary increases, he said.
The authority is a semi-autonomous agency and receives no money from the government's General Fund. It is charged with being self-sufficient and must live on the revenues from its multiple marine, airline and property fees.
The budget breaks down as follows:
– Operating expenses — $30,166,086;
– Debt service — $3,619,760;
– Capital projects — $19,166,278.
– Equipment — $500,000.
The budget will be funded primarily from VIPA's projected revenues for FY 2006 of $41,332,124 and $12,120,000 from federal grants.
Brin said some capital projects will have to be deferred, though he didn't provide details. Board member Pamela Richards, the Tourism Commissioner, asked Brin for a complete listing, which he said he would compile.
Brin also suggested to the board that an independent management study be performed to determine whether the authority is following its legislative mandates, which the board didn't act on. Members said they wanted to get a comprehensive view of the situation first. Brin said if revenues should turn out to be higher than projected, salary increases for management and non-union employees could be considered.
Though the budget includes an 8 percent boost in marine fees, aviation rates will not be raised in FY 2006. The airlines raised havoc in 2003 when the landing fees were increased by 25 percent, although the board voted in October of that year to roll back the increases. Marine rates have not been raised in several years, Brin said, and a plan to increase the rates is currently being revised.
Richards took strong exception to a line-item budget recommendation of $100,000 to cover scholarship and marketing funds. Richards suggested taking $150,000 out of the budget's $500,000 contingency fund and adding it to the marketing fund. Out of that, Richards recommended using $150,000 of that fund specifically for marketing, which the board unanimously approved.
Richards noted the authority needs the money to market the new Crown Bay development. She also took umbrage at a suggestion by a board member to cut the authority's travel allowance. "We need to attend more conferences, to promote ourselves and let our partners know that we care," she said. "We need to be more aggressive, and more board members need to attend conferences."
Specifically, Richards said, there is a mini-Seatrade conference coming up in August on St. Kitts, and she asked board members to attend that. Also, she said, the cruise lines will be celebrating their 30th anniversary in the coming months. "We need to show our support," Richards stressed. She said at the 21st annual Seatrade Cruise Shipping Convention in March this year, it was brought home to Brin and herself that the V.I. wasn't showing enough support.
In another matter, board member James Rodgers got everyone's attention when he said he had discovered that aircraft landing fees were not being collected at the Henry E. Rohlsen airport on St. Croix on weekends. "With our enormous aviation deficit on St. Croix, I want to know what's going on," Rodgers said.
Brin said the firefighters at the airport used to collect the fees on weekends, but quit collecting the fees a few months ago after the firefighters' bargaining unit, the United Steelworkers of America, filed a grievance saying it wasn't part of their job.
Brin said hiring someone to collect the weekend fees might actually cost more than the authority would take in. "Those little airplanes only pay $15 per landing," he said. Brin explained that all the major carriers, including American Eagle and Caribbean Sun, pay the fees through a contractual agreement.
Nonetheless, Rodgers said it's a revenue source that should not be overlooked. He asked the board to review the collections system, which Board Chairman Robert O 'Connor agreed needs to be done.
David Mapp, VIPA assistant director on St. Croix, confirmed that fees are not collected on weekends. When asked to comment on Brin's assessment of the situation, Mapp told the Source, "I won't respond [to that]."
Rodgers said after the meeting that he will pursue the landing fees situation. "There is no justification for this," he said. "Perhaps the airport staff could be reassigned to cover the weekends."
Board members Drue; Leslie Millener; O 'Connor; George Phillips, acting Public Works commissioner; Dean Plaskett, Planning and Natural Resources commissioner; Richards; and Rodgers attending the meeting. Hector Peguero was absent.

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