Low per-diem rates in the Fort Lee area are criticized

PETERSBURG -- In spite of a growing military presence and increasing lodging demand for servicemen and servicewomen in the Fort Lee area, the federal per-diem rates for lodging and meals here are the lowest in the state.

The rates vary in the Greater Richmond area, with the per diem for lodging being as much as $55 more in Richmond than in some localities in the Tri-Cities.

"There is no reason why our side of the James River wouldn't be considered the same as the other side of the James River," Hopewell City Manager Edwin C. Daley said.

Per diem is the allowance government workers get for lodging and meals and incidental expenses. The U.S. General Services Administration sets the continental U.S. per-diem rates, which are reviewed annually.

With the current rate, the Tri-Cities hotels that contract with federal institutions such as Fort Lee are getting payments much lower than their counterparts in Richmond and Chesterfield.

On top of having the lowest per diem, hotels are required to provide discounts to Fort Lee, said Linas Kojelis, coordinator of the Greater Tri-Cities Hospitality Coalition, which has more than 160 members in the region's hotel and service industries. An increase in per diems would mean more income for the businesses and more revenue for the localities, Kojelis said.

John Whyte, general manager of the Ramada Plaza Hotel in Petersburg, said that to do business with Fort Lee, hotels agree to a contract that is 8 percent below the per-diem rate and give an additional $4 discount per room.

"The point is that it is inequitable," Whyte said. "There are local taxes generated out of hotel business, so not only the hotels are suffering, the municipalities are suffering."

The Crater District Planning Commission, which represents Colonial Heights, Hopewell and Petersburg and Chesterfield, Dinwiddie and Prince George counties, recently asked the General Services Administration to review the area's per-diem rates.

"There is an obvious unevenness in the Fort Lee area's per-diem rates," Petersburg Mayor Annie M. Mickens, chairwoman of the Crater Planning District Commission, said in a letter to Ralph Conner, acting associate administrator for the GSA. The current rates also have not been adjusted for some time, Mickens said.

The standard rate for the continental U.S. locations -- $70 for lodging and $46 for meals in the fiscal year 2010 -- applies to Hopewell and Petersburg and other Crater District localities. That rate, according to GSA, is set to locations that are less frequently visited by the federal community.

Leaders in the Tri-Cities say the current rates seem unfair considering the region is home to a growing military community. Fort Lee is undergoing an expansion and expecting its 2005 population to nearly double by 2011. Projections for daily off-post lodging are expected to go from last year's 480 hotel rooms to about 1,783 rooms in 2011.

"As we move forward with the additional amount of business that will be off-post, my board thought it was a legitimate question to raise," said Denny K. Morris, executive director of the Crater Planning District Commission. "There are a lot of questions about how the per-diem rates are established. . . . We better want to understand why we have different per-diem rates within the region.

"We are perplexed as to why the differential in rates and why the region has the lowest in the commonwealth of Virginia," said Morris. He said the commission is working closely with Fort Lee and U.S. Rep. J. Randy Forbes, R-4th, to address the concern.

Daley, who last month sent a letter to Fort Lee Garrison Commander Col. Mike Morrow asking him for a review of the rates, suggested that Hopewell's rate should at least be "the same as all others within a 10-mile radius of Fort Lee."

"I think it is very unfair and very irrational," he said of the rate differences. "There is no difference between the Hampton Inn in Hopewell and the same hotel in the other side of the James River. There is no rational explanation for this policy."

Contact Luz Lazo at (804) 649-6058 or .