CPA revises FY 2000 budget

With revenues falling, the Commonwealth Ports Authority must keep a tight watch over its expenditures for the remaining six months of 1999 to meet its financial obligations while maintaining the smooth operations of its facilities.

This developed as CPA management prepared a $1.5 million budget for the agency’s operations for fiscal year 2000. But board member Roman S. Tudela, chairman of the finance committee, wants the proposed budget revised to reflect the cost-cutting measures implemented by management and the approved increases in airport and seaport fees.

Airport operating budget alone is $8.5 million or a 12 percent reduction from the current fiscal year’s appropriation. Seaport budget for FY 2000 is $1 million, which is an eight percent decrease from this year’s appropriation.

Debt payment is still the biggest problem of the ports authority as the regional crisis has led to the drastic decline of the airport revenue. Interest on the $20 million airport bonds is payable semi-annually at 6.25 percent. For 1999, the ports authority would have to pay $1,245,625 in interest as monthly interest payment alone would cost the ports authority some $103,000 a month at this time when revenue at the airport has been on a decline due to the reduction in service of airlines.

Based on the financial analysis of the airport division alone for fiscal year 1999, the ports authority was able to generate some $403,666 in profits. But this does not cover the $618,000 interest payments which it must also cover during the six months period for the airport debt.

On the other hand, payment of the $33 million debt at the seaport is not much of a problem since it’s revenue was not severely affected amid the slowdown of the island’s economy. However, it has to meet monthly interest payment of $178,000 or a total of $1,060,000 for interest of the seaport debt alone.

The ports authority has begun cutting down the working hours of its employees from 80 to 72 hours per pay period last April which would give the CPA some $550,000 in savings for the year. At the same time, the board approved to reduce by 50 percent its contribution in the employees’ health insurance benefits.

Three months from now, the wharfage fee shall increase by $3.25 per revenue ton while port entry fee, dockage rates, bunker fee and home port fee shall increase by 30 percent.

The board has also increased its passenger facility charge by 39 percent from $5.79 to $8.00 per passenger and a 65 percent hike in landing fee from $.85 to $1.40 beginning March 1, 2000.