The V.I. Port Authority governing board again approved a motion to write off U.S. Customs debts amounting to $3.5 million for fiscal year 2012. The board also voted to write off several tens of thousands in bad debt items, including inactive accounts and non-sufficient funds.
Gordon Finch of the board’s financial committee recommended VIPA write off the Customs’ balance. According to him, most of the write offs are “unsolvable, and this is just a formal process to clear the books. Just because it is written off doesn’t mean it will disappear.”
“This is the second prong of a collection plan. The first prong was to stop the bleeding,” he said.
Documents submitted by Finch state that “as of 2008, Customs became delinquent in its [sic] submission of user fees collected on behalf of the VIPA. The result is a large receivable on the books.”
Originally, VIPA selected Customs to collect user fees for cargo in and out of the territory, according to background information in Finch’s documents. The consequence is several millions in debt that Customs cannot pay.
VIPA wrote off $6.2 million in Customs debt in fiscal year 2009 and received $1.7 million from Customs in fiscal year 2010, but no other payments have been made. VIPA began collecting their own cargo fees in March 2011.
Money continued to dominate discussion at Wednesday’s meeting on St. Thomas as each committee discussed the status of other projects, a majority of those also focused on the perpetual theme of money.
Another pressing financial concern is renovating a larger space for the Transportation Security Administration to move into. Interim Executive Director at VIPA Don Mills suggested turning over projects such as these to other departments. That would relieve some of the money woes facing VIPA.
VIPA board members believed they could work strategies in their favor to earn money in other areas.
The V.I. Housing and Finance Authority Director Adrienne Williams proposed a low income credit housing program, but VIPA would have to distribute tax credits as opposed to allocating them for VIPA. The board would have to first locate an entity to buy or lease the land, and then apply for the tax credits.
“There’s not much hope of getting assistance,” said board chairman Robert O’Connor Jr.
All other property committee projects were approved in an attempt to generate more money for VIPA. This includes extending aviation and retail areas, so stores will have more space to bring in more revenue. A larger space also results in an increased rent that goes back to VIPA.
However, Finch worried that the board accepted nearly every opportunity to make money in their financially difficult time without fully considering the outcome.
“Next time we get an application, let’s look at our plan and decide whether or not it fits in with our vision,” he said. “All of the spaces have been leased, but it doesn’t mean they’re still thriving.”
Financial updates for March 2012 show $4.8 million in revenue, or a four percent decrease compared to March 2011 operating expenses. The net increase in assets on March 31, 2012 was $1 million.
Information for fiscal year to date revenues and expenditures was also available. In comparison to 2011 fiscal year, operating revenues increased by one percent, and total operating expenditures increased four percent. The Year-To-Date (YTD) operating loss shows an increase of 63 percent, while total year-to-date non-operating income increased by 21 percent. The net increase in assets is $2.5 million or a 66 percent decrease compared to the 2011 fiscal year.
In the aviation division, revenues increased two percent from March 2011, and current operating expenditures are consistent with March 2011; YTD aviation revenues increased four percent from fiscal year 2011 and YTD aviation operating expenditures show a 12 percent increase.