CPA acting Executive Director Lee Cabrera reported to the Legislature and the administration that the agency has solicited the services of BST Associates of Kenmore, Washington, which specializes on seaport rate reviews.
“CPA intends to proceed on this on a sole source procurement given the exigency of the bond indenture requirement and the specialized requirement,” Cabrera said.
The firm’s rate study is crucial to CPA’s ability to meet its seaport bond payment of $48,000 a month.
CPA’s revenues from the seaport and the airport are steadily declining as the islands’ two major industries — garments and tourism — continue to weaken.
Cabrera said CPA seaport bond indenture’s debt-ratio coverage stood at .84, way below the normal 1.25 ratio.
“As you may all know very well by now, the rate study will propose rate increases which will be passed on to the shipping industry in the form of tariffs and will further affect all involved in our local economy,” the CPA acting chief said.
He added, “Unfortunately, CPA is faced with having to undertake this reality as a result of the bond indenture agreement for the seaport bond.”
This is the third straight month that CPA has been placed under Gov. Benigno R. Fitial’s control.
In May, Fitial issued an executive order declaring CPA under a state of emergency, essentially stripping it of its autonomy and dissolving its governing board.
