In spite of an unexpected net profit year to date of $5.3 million (as of June), the Port Authority is proposing heavy fee increases – primarily impacting St. Johnians – that will provide them with additional revenue of at least $6 million per year.
The fees will be increased by up to 200%. There will be increases for each ferry and barge passenger, increases to the costs for all goods and cargo transported to St. John, and an increase on the vessels themselves. The cost of everything needed to stay alive on St. John will go up significantly, and there will also be an increase in the cost of dying since the barge fee for the hearse will increase by 67% plus the additional $2 per passenger fee – I wonder if that fee will be applied to the deceased?
Why is St. John being hit so hard?
The spectacular net profit of $5.3 million against an expected $1.1 million loss is due to an unexpected increase in revenue and an unexpected decrease in operational costs – bravo! This is an amazing accomplishment. And this was not a fluke, one month later, the net profit as of July had gone up to $7.1 million! What will happen to this profit? Could some of this windfall be used to prevent VI residents from suffering economic hardship due to the fee increases?
The decision to raise fees was made prior to receiving the good news of very high net profits. Were new calculations done using the actual income and expense for proposed fees? No, that data was not used at all. The financial analysis documentation shows it used a three-year average for 2022-2024. The massive increase in revenues for 2025 was ignored. And by averaging, the additional fee revenue expected ignores the reality that St. John revenues have steadily increased year after year, the actual out-of-pocket impact on residents will be far higher.
Are the St. John fees needed to cover capital improvements? No, that does not apply, since all three St. John projects are paid for by grants.
Are the increases needed to cover a decrease in revenue? The fee increases directed to BVI passengers does have some documentation showing a decrease in revenue and in the volume of traffic for the year. But there is no corresponding documentation for all of the St. John fees. The limited documentation that is available shows consistent increases in St. John revenue. For example, their data shows quite impressive June monthly revenues for the barge ramp ($52k), the Red Hook Parking ($99K) and the gravel lot ($6k), for a year-to-date total of $1.3 million – up 4% from the previous year. The Creek Cruise Ship passenger revenue for St. John went up 53% from the previous year! There is no data concerning the dockage fees collected at all locations on the ferries, barges and other vessels; no indication of rents received by tenants; no data on cargo fees paid; and no data at all on the corresponding expenses. There is no clear data on the actual income and expense for St. John facilities.
Are the fees needed because the Port Authority now requires each area to be profitable? The VIPA is run to benefit all Virgin Islanders, with the areas of the Port Authority that generate profits rightly being used to cover other areas that are running at a loss. The STT/STJ marine division is the most profitable by far of all the Port Authority areas with a net profit year-to-date of $10 million as of June (STJ income and expenses are not tracked separately). If the policy has changed and now St. John is being required to cover a supposed loss (still undocumented), will that policy also be applied to the largest loss area? St. Croix Aviation has a year-to-date loss of $4 million and St. Croix Marine has a YTD loss of $3 million. Should Crucians be concerned that they will be the next target for extremely high Port Authority increases in order to generate more than $7 million per year?
St. Johnians already have an extremely high cost of living due to everything having to be transported from STT to STJ. Increasing the cost of doing that will be crippling. St. Johnians are forced to travel to St. Thomas for medical care, to go to VI Government agencies, and to purchase products needed to live that are unavailable on St. John. We do not have a choice in this, we are at the mercy of Port Authority. There is no additional cost to the Port Authority for each additional passenger.
Port Authority needs to identify what criteria is used to determine the target for rate increases other than “VIPA is continuously looking for ways to increase revenue” or simply because rates have not gone up in many years. The actual income and expense data for each of the St. John and Red Hook facilities needs to be split out and made public. The astonishing and commendable 545% increase (that is not a typo, it is a five hundred forty-five percent increase!) in net profit from the previous fiscal year, needs to be incorporated into a new analysis of necessary increases of fees and implementation of new fees. Especially those that will cause a significant increase to the daily cost of living in the Virgin Islands.
Then, perhaps, we can ask VIPA to share their methods to generate such a spectacular net profit with WAPA.
