In an attempt to reduce its looming $3.4 million budget deficit, the V.I. Port Authority board passed a series of measures, including personnel furloughs, increased airport taxi fees, and reduced procurement and travel expenses within the agency.
At its monthly board meeting Wednesday, Finance Committee chairman Gordon Finch said that the fiscal year 2010-2011 deficit is primarily attributable to operating losses in the aviation division and payouts from a union arbitration agreement.
During last month’s meeting, motions were made to raise airport landing fees and cut VIPA staff, but both were discarded by the board. However, the board did agree to not fill any staff positions at the agency that were currently vacant and instructed the Finance Committee to re-examine methods for cost control and revenue generation, with the help of outside consultants Seslia and Co.
On Wednesday Finch presented five measures derived from the consultants’ analysis. The first suggestion was that all VIPA employees take one furlough day per pay period for the months of June, July and August, a measure which would save $391,000 through the end of the fiscal year.
Second was a proposal to charge a .50-cent per-taxi facility use fee for vehicles picking up customers from the territory’s two airports for pre-arranged tours. In the past, no fees have been assessed for such tours. Finch said this fee would raise $300,000.
Third was a proposal to reduce employee overtime by one-third its current level, which would save $200,000.
Fourth was the cost savings that will result from the new photovoltaic system that has been installed at the airport, which will result in utility bill savings of approximately $88,000.
And last was the reduction of procurement practices and travel expenses for the next quarter, which would result in a savings of $225,000. Finch did not specify which procument practices or travel expenses would be reduced.
Before voting yes on the motion to adopt the plan, board member Vincent Frazer, the V.I. Attorney General, noted that the cuts would be difficult but necessary and may have to go even further.
"We have to take measures that may be painful," he said. "The possibility looms that we may have to go deeper into cost-saving measures, such as furloughs or layoffs."
Board chairman Robert O’Connor added that the agency—and the territory—was in difficult times financially, and that necessary adjustments were needed to improve its revenue picture.
With regard to the payouts for the arbitration agreements, Finch clarified that VIPA was trying to take the entire hit of retroactive indebtedness for the awards in 2011 and 2012, after which the agency would be in a better position to absorb annualized increases.
"Hopefully furloughs and other measures will become a thing of the past after that," he said.
The board also voted to adopt a new proposal to handle the process of relocating tenants from the aging Bournefield housing complex. The plan was on the agenda of April’s meeting, but due to time constraints the board did not get a chance to discuss it, nor vote on adopting it.
The proposal allows for a gradual five-year transition period in which residents will be phased out by attrition rather than forced eviction, as was previously planned. It allows for finite five-year leases for all current tenants, a $40,000 ceiling for repairs for each unit, and provisions to smooth relations with tenants and assist with relocation.
Bournefield resident Josephine Lindquist, a representative of the community, attended Wednesday’s board meeting and afterwards expressed her extreme dissatisfaction with the proposal.
"I am disappointed but not surprised that the board has again failed Bournefield," she said. "Putting people out of their homes to build a parking lot is unacceptable. Turn it over to us so we can become homeowners!"
Lindquist and many other tenants want the option to be able to continue to stay in their homes indefinitely and to eventually have the option to purchase them, a concept the VIPA has never embraced.
VIPA’s current plan is to knock down the 42 units in 2016 and use the land for a car rental and public parking garage facility, and for the expansion of airport cargo-handling facilities.
Lindquist was also unhappy with the $40,000 repair ceiling allocated to each unit. Most, if not all, of the units have significant electrical and plumbing problems, plus many have water damage from leaky roofs. Back in November, a structural engineer’s report said that single-family units would cost $72,000 to rehabilitate, while double units would cost up to $150,000.
"They just offered a blanket figure for repairs, but where did that figure come from?" she asked. "No contractors were present at the [Property Committee] meeting to offer bids."
She added that only one roof has been repaired since March, and that prisoners who had been assigned to do repair work appeared to be unsupervised, which made tenants feel unsafe.
"We are definitely taking this back to the Legislature," she added. "I have no confidence in Port Authority. They bend over backward for commercial tenants, but don’t do anything for us."
On April 20 the Senate passed a measure requiring VIPA to submit its Bournefield plan to the Senate for approval within 60 days and to ensure that tenants are relocated into "decent, safe, and sanitary dwelling accommodations within their means."
In other business, the board voted to:
– waive port fees for St. John Festival and Cultural Organization vehicles headed to St. John on May 27-28
– schedule public hearings on increasing marine rates and charges;
– renew the lease for the Petite Pump Room for eight years with a five-year option, at $12.50 per square foot plus a percent cut of gross revenues from restaurant and catering services;
– renew the lease for Choice Cafe at Crown Bay for two years at $1,260 per month plus a 5 percent annual increase;
– authorize the creation of an outdoor art gallery at Crown Bay. The gallery would occupy 400 square feet in front of the Sugar Mill and would be used for local artists to display and sell their work; and
– authorize a brand sponsorship program for the Sugar Mill. The program would involve up to 20 sponsors, who would each pay between $20,000-50,000 per year for a total of $200,000 in revenue, which would be credited toward net operating income.