Public Services Commission raises tourist rates for ferry rides
Published: August 16, 2013
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ST. THOMAS - The two companies that run passenger ferries between St. Thomas and St. John will spare local residents from a rate hike and instead charge tourists separately a dollar more per ride.
The V.I. Public Services Commission voted Thursday evening to approve a joint petition for a new rate schedule from Varlack Ventures and Transportation Services of St. John. The new rates will go into effect within 30 days after the order is signed by the Public Services Commission Chairman Thomas Jackson.
According to Maria Tankenson-Hodge, an attorney who represents the two companies, the new rates represent an effort to make up for operating deficits without imposing a burden on the territory's residents.
In addition to the new, higher tourist fares affecting adult passengers, the companies will raise fares for teachers and students, whose trips are paid for by the V.I. Education Department, and will raise checked baggage fees by $1.50. Child and senior rates will not be changed.
The current adult rate for a one-way trip on the Cruz Bay-Red Hook route is $6 and will remain the same. The tourist fare for the same trip will be $7 each way. The current adult rate for a one-way trip on the Cruz Bay-downtown Charlotte Amalie route is $12 and will remain the same. The tourist rate will be $13 each way.
According to the proposal, rates for teachers will increase from $3 to $4 for a one-way trip, and student fares for the same trip would go from $2 to $3.25. Bulk rates would go up by 50 cents, and checked baggage fees would be increased from $2.50 to $4.
At the special meeting Thursday, Tankenson-Hodge reiterated the financial shortfalls both companies are facing to the Public Services Commission. With government subsidies becoming an unreliable source of revenue, and with declines in ridership, both companies, which by law are guaranteed an 8 percent return on their investments as public utilities, are operating at a loss.
Specifically, with present rates, Transportation Services of St. John's shortfall for 2013 is $226,063, or more than three times the $71,280 profit an 8 percent return would represent, Tankenson-Hodge said.
Varlack Ventures's shortfall for the same year, as determined by consultants for both the Public Services Commission and the ferry companies, is $27,868.
Commissioners Elsie Thomas-Trotman, Jackson, Sirri Hamad and Joseph San Martin voted unanimously in favor of the new rates, with a stipulation the ferry companies take steps to secure independent third-party ticket agencies to oversee and calculate sales.
Tankenson-Hodge said the cost of implementing such an agency has not been factored into the petition for the rate increase.
Because the companies currently have no data about the number of riders who are tourists as opposed to residents, Tankenson-Hodge said, the rate increase will be reassessed after a six-month period. If the companies still are under-earning, they reserve the right to raise rates further but only for the tourist category.
If they are over-earning, or taking in more than would be necessary to meet the 8 percent requirement, other riders may benefit in the form of reduced rates, Tankenson-Hodge said.
After discussion between Tankenson-Hodge and the commission's attorney, Tanisha Bailey Roka, the Public Services Commission agreed that during the six-month period in which the companies are gathering data, the commission would require them to issue a request for proposals for the independent ticket auditor so future costs can be included in rate adjustments.
Sen. Craig Barshinger, who did not attend the meeting and is the At-large senator from St. John, said Thursday the requirement for an independent ticket agency is important.
Barshinger said the present rates are far too high, and that he has drafted legislation calling for rates as low as $1 to $2 for residents. Federal subsidies could make such rates possible, but not until the companies are compliant with professional accounting standards.
"In general, we have standards in America that anywhere there is water, you should be able to get around without breaking the bank, and that standard is heavily subsidized," Barshinger said. "We don't get the subsidies and we pay through the nose in the Virgin Islands because we don't yet have the accountability. If we follow the PSC's lead, we can work ourselves into lowering rates."
User fee hardship
In other business, the commission voted unanimously to approve a wastewater user fee hardship program proposed by the V.I. Waste Management Authority.
The utility would offer a $55 discount on a proposed $110 wastewater user fee to property owners who demonstrate low-income eligibility requirements to the V.I. Human Services Department. The hardship program is a condition set forth by the Public Services Commission for the implementation of wastewater user fees.
Waste Management Authority Executive Director May Adams Cornwall said it is the goal of the utility to levy the fees through the 2013 property tax bills.
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