With staff stretched between administering and overseeing leases, as well as billing and collecting on those leases, V.I. Port Authority Governing Board members voted at the group’s monthly meeting Wednesday at the Cruz Bay Battery on St. John to create a new business management analyst position. Administrative budget transfers were also discussed at length.
Over the past year, VIPA’s accounting department lost both its senior bookkeeper and accountant, neither of whom was replaced. The new VIPA business management analyst, with a proposed annual salary of $40,000 to $42,000, would essentially combine those positions. The senior bookkeeper used to earn $28,094.73 and the accountant $35,548.78, so new position would be paid for through the cost savings from those vacant roles while saving VIPA $21,643.51 in total payroll.
VIPA Governing Board Chairman Robert O’Connor and members – Department of Licensing and Consumer Affairs Commissioner Albert Bryan, Attorney General Vincent Frazer, Manuel Gutierrez, Department of Tourism Commissioner Beverly Nicholson-Doty, and Department of Public Works Commissioner Darryl Smalls – voted to establish a business management analyst in the St. Thomas/St. John district. Board member Dr. Yvonne Traen voted against the measure, and members Roberto Cintron and Allison Petrus were absent from Wednesday’s meeting.
Finance committee chairman Gutierrez said that after almost a decade of filing financial statements late and falling out of compliance with mandated single audit reporting, VIPA accomplished both of those deeds recently.
The single audit, covering October 2012 to September 2013, found that VIPA does have material weaknesses and significant deficiencies in areas of revenue collection, lease agreement administration, program management and more. According to Gutierrez, however, the authority is moving in the right direction.
"We have plans already and we discussed additional plans to set up to address the issues," said Gutierrez. "Our pattern of moving forward is strong. Previously, VIPA was not in compliance with reporting single audits and this is about the first time in a decade our financial statement filing was not late."
"This is quite a turn around we’re seeing in the last year to year and a half," Gutierrez said. "I commend the CFO and VIPA staff on this really impressive turn around."
VIPA’s financial review, including statements of revenue, expenses, changes in net assets and cash flows, dated May 31, covered the eight months prior and showed the authority as still incurring millions of dollars in loses.
While incurring about $941,000 less than last year’s operating loss, VIPA still accrued a $5.7 million operating loss this year. The primary contributor of the accrued loss was determined to be the Aviation Division, which accounted for $7.6 million in operating loses. VIPA’s Marine Division realized a $1.4 million profit.
On the cash basis side, VIPA realized $7.1 million in operating profit, thanks to a 6 percent surge — compared to the same period last year — in revenues from the Aviation and Marine Divisions, which cushioned higher operating expenses of salaries, maintenance, repairs and utilities.
VIPA’s year to date net cash flow from operating activities was $13.2 million, which was fully absorbed by financing and investment in maintenance of port facilities and equipment.
As far as accounts receivable, VIPA is owed almost $7 million and continues pursuing efforts with American Airlines, Seaborne Airlines, Spirit Airlines, LIAT and more. According to VIPA Executive Director Carlton Dowe, VIPA’s proposed new business management analyst position will improve the authority’s ability to collect receivables.
While the financial and filing compliance outlooks are upbeat for VIPA, governing board members questioned the staff’s ability to transfer funds from one project to another without board approval.
After the issue arose at VIPA’s Finance Committee meeting in early July, staff compiled a table of all budget transfers, allowed by VIPA administration without prior approval by the board. The transfers had several members wondering what would happen to the projects that were defunded.
O’Connor said, "I have a problem with these budget transfers. I believe what is important to the board is approved in the budget and then the money is transferred without our consent. There were things on the budget three to four years ago that were transferred and now have never gotten done."
"The board authorizes priorities and then the administration changes them," said O’Connor. "That is a problem."
Dowe said he wouldn’t mind coming before the board for budget transfer approval and that VIPA sometimes transfers funds from one project to another as it changes priorities due to outside factors. For example, the lengthy Army Corps of Engineers permitting process or even St. John Festival, can delay one project, freeing up funds for a different project, explained Dowe.
"Budgets are never transferred from St. Croix to St. Thomas," said Dowe. "If we have $1 million budgeted over the course of a year to do one project and now we need approval from Army Corps or FAA, that’s out of our control. We might have another project that we can use that money for now. We were ready to work here but then it was July 4th and no one wanted us to work during carnival. To me there are some instances where it’s not a budgetary issue."
"I don’t mind coming before you," said Dowe. "Just tell me the rules and we’ll play by them."
Of the $300,000 in funds approved by the VIPA Governing Board for two St. John marine capital projects, only $8,840 was used. The board approved spending $200,000 in Fiscal Year 2014 to resurface the Cruz Bay ferry terminal dock, but a total of $192,345 of that money was transferred. The funds were used instead to install navigation aids at Cruz Bay and Red Hook ports, to plant palm trees at the seaplane area and to survey the Edward Wilmoth Blyden terminal.
The Cruz Bay ferry dock will not be resurfaced this year because the sole contractor in the territory capable of the project will not be available, explained Dowe.
The VIPA Board also approved $100,000 in its FY14 budget for an Enighed Pond terminal administration building, of which $8,840 was spent. The remainder still available and was not transferred.
Staff agreed to research the administrative budget transfer issue further and report back to the board.
A solar photovoltaic project slated for Henry E. Rohlsen Airport on St. Croix was sent back to committee after not receiving enough votes for approval. Four members of VIPA’s Governing Board abstained from voting, while only three approved the measure.
The VIPA Board approved lease renewals for DHL Worldwide Express and Sea Flight, while voting to not extend Duty Free St. Thomas’ request for exclusive rights to sell liquor and tobacco at Cyril E. King Airport for the next five years.
Before heading into executive session, the VIPA Governing Board also voted to accept a bid from Neon Construction Inc. to construct a third exit lane at Cyril E. King Airport in order to improve traffic flow until the parking lot is expanded.
