According to acting CPA Executive Director Lee Cabrera, “Given the departure of the garment industry and the state of our economy, these [rate increases] may be substantial and prohibitive. These increased charges will certainly be passed on to the consumers in the form of higher costs for goods.”
CPA has asked CDA and the Legislature to “forgive” the ports authority’s debt, for which it pays $68,000 a month.
CDA is opposed to the proposal, while key lawmakers remain “non-committal.”
CDA instead suggested a three-year suspension of CPA’s monthly payments and interest.
But in a report to the governor, Cabrera said CDA’s proposal may not be practical.
“There is one point I wish to stress with respect to the choice between suspending payments to CDA versus writing off this $6 million liability: the $6 million amount is a liability cost which CPA must pay. This cost can only be recovered by passing on this liability — for the costs from the harbor improvement projects — to the carriers and consumers,” Cabrera said.
He added that CPA will have to meet and service its seaport revenue bond of $17 million and $6 million debt to CDA by “increasing and charging the necessary tariffs to tenants, port operators, docking vessels, parking fees, and other charges.”
Cabrera said if the Legislature “feels that CDA should be paid in full then CPA can certainly respect that policy decision.”
He added, “CPA only proposed the legislation…in order to avoid having to impose another tremendous burden with the projected rate increases. It is for this reason that CPA is suggesting the write-off because if the liability remains then CDA will be paid through increased charges and burdens on businesses.”
