Just days after ferry companies Varlack Ventures and Transportation Services initiated a public war of words with government officials by threatening to curtail ferry service due to a lack of government funding, the companies’ attorney met with officials and promised that service between St. Thomas and St. John will continue — for now.
Varlack Ventures and Transportation Services attorney Claudette Ferron reportedly made a presentation to Department of Public Works and Government House officials, which included the companies’ financial information, at a Wednesday, November 14, meeting. Officials requested some time to look through the information Ferron provided, and the group plans to meet again some time this week, according to published reports.
Interpretation of Code “Incorrect”
Ferron faxed a letter on Thursday, November 8, to government officials and media announcing that Varlack Ventures and Transportation Services owners would no longer subsidize the companies with their own private funds — a practice that brought the companies to the “brink of financial ruin,” according to the letter. The two ferry companies, which own the exclusive franchise to transport passengers between St. Thomas and St. John, contended that the government had not subsidized their operations as required by law, according to Ferron’s letter.
Ferron’s interpretation of the section of V.I. Code governing the franchise is “simply incorrect,” according to a response from by the Public Services Commission, which regulates the ferry companies’ passenger fares.
“You must be advised that the commission has grave concerns regarding your interpretation of certain sections of the Code and their effects,” according to the letter, signed by PSC General Counsel Tanisha Bailey-Roka. “The statements made in your correspondence of November 7, 2007, if followed, may jeopardize the maintenance and continuation of the ferry franchise.”
The section of V.I. Code governing the franchise is designed to give the governor the power and responsibility to maintain transportation services between the two islands, Bailey-Roka explains in her letter.
PSC Questions Role of Fares
“The statute gives the governor the power to contract for equipment, labor, services and facilities as are necessary or appropriate,” according to the PSC letter. “The ferry franchise is that contract. Any cessation of service may be interpreted as a renunciation of the franchise.”
The announcement that Varlack Ventures and Transportation Services would no longer fund the ferry operations with personal funds reportedly came after Governor John deJongh last month vetoed $530,023 in ferry subsidies earmarked for companies operating between St. Thomas and St. John. Ferron’s reasoning that the government is responsible for subsidizing ferry operations is incorrect, according to Bailey-Roka’s letter.
“The question becomes, if the government is required to pay 100 percent of the ferry franchisees costs of operations, what role is the cost charged to the passengers through your schedule of fees intended to play?” according to the letter. “Meaning, per your argument, the ferry companies are entitled to both a rate of return from their customer base, and a 100 percent subsidy for maintenance and operations from the government? This reasoning is simply over-inflated and flawed.”
The exclusive franchise is a “privilege, not a right,” Bailey-Roka adds.
Money Recently Appropriate To Ferry Companies
DPW Commissioner Darryl Smalls issued a letter on Friday, November 9, highlighting the V.I. government’s commitment to financial assistance to the ferry companies. One million dollars was appropriated to the franchise operators in Fiscal Year 2006, and the Office of Management and Budget released $500,000 each to Varlack Ventures and Transportation Services in Fiscal Year 2007, according to Smalls.
“I want to assure the residents of the Virgin Islands, especially the commuters between the islands of St. Thomas and St. John, that the government of the U.S. Virgin Islands is prepared and available to collaborate with the franchise operators and render any assistance it can for the betterment of the people of the U.S. Virgin Islands,” Smalls said in his prepared statement.
Ferron was not available as of press time for comment regarding last week’s meeting with government officials.