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VIPA Lines Up Projects for Economic Stimulus Funds

Jan 23, 2008 — "Shovel-ready" is the current buzzword for V.I. Port Authority project planners.
In Wednesday's board meeting, members learned that funds from President Barack Obama's economic stimulus package might be available for the Port Authority's airport projects — provided that they are ready to move forward quickly.
According to a Port Authority memo distributed at the meeting, the total available funds for aviation projects are $5.5 billion. Board members learned there may be an increase in the bottom line when the bill goes to the U.S. Senate.
The plan includes a phased distribution of funds: Phase I, at $1 billion dollars, is to be distributed as soon as the bill is signed by the president and over the next 90 days thereafter; Phase II, at $2 billion, will commence six months after the first allotment; and Phase III, at $2.5 billion, will round out the final allotment for FY10, according to the memo.
The board took measures to make sure that it stands the best possible chance for funds from the stimulation package, including voting to extend the contract it holds with the engineering consultant approved by the Federal Aviation Administration — Post, Buckley, Schuh and Jernigan.
The contract, which was due to expire in the first quarter of 2009, would have left the VIPA without a supervising engineer, putting projects in jeopardy.
"There is a timing issue under the rules of the stimulus package, which requires you to have a project ready to go, and money has to be spent in a fairly short period of time," board chairman Cassan Pancham said. "If you don’t have a supervising engineer, that would delay the project and the implementation of the spending."
The board is also looking at other revenue streams, including raising the passenger facility charge at both airports. Currently, the charge at Cyril E. King Airport is $3; there is no PFC at Henry E. Rohlsen Airport.
The funds collected from the PFC are used for FAA-approved projects including redesigning and improving the passenger and baggage areas, and the passenger pick-up areas.
While the board has the right and the authority to raise the fee, it must also consider the impact on airlines that use the airports. The PFC adds to the price of the passenger's ticket, making increases less than popular with carriers and passengers alike.
Last May, the authority presented a proposal to airlines for a $3 fee at Rohlsen to help pay for a building there. The proposal met with significant resistance for the funds use, but carriers said they could support projects that improve the passenger experience, according to a VIPA document prepared by Seslia and Company.
"Notably, $600,000 is in [the] 2009 Budget for design purposes," the document states, indicating that funds from another source had to be budgeted for the purpose.
The document also noted that "no further action to increase PFC levels appears to have been taken by VIPA to process the PFC application."
If current trends continue, airline passenger numbers are projected somewhere around 670,000 for the territory this year, according to Lauritz Mills, director of the V.I. Bureau of Economic Research.
This means the VIPA could stand to collect some $2 million in fees next year if the PFC for both airports is $3. However, if the PFC remains unchanged, the projected revenue will be around $1.5 million.
Pancham noted, though, that only paying passengers are charged the fee. Those using frequent flyer miles aren't subjected to the charge.
The board tabled the PFC issue projects are prioritized that would be funded with the fees, Pancham said, but he added there is also an expectation that the PFC level will be increased from a current maximum of $4.50 per passenger to around $7 as part of an FAA funding bill that is soon to make its way through the U.S. Congress.
"We wanted to do it only one time," he said.
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