Category: Finance

V.I. DEPARTMENT OF EDUCATION REQUESTS $172,209,001 FOR FY 2019

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ST. THOMAS- Members of the Committee on Finance chaired by Sen. Kurt Vialet, held a meeting at the Capitol Building on Monday, to receive testimony from the V.I. Department of Education (VIDOE), the Career of Technical Education and, the Bureau of Internal Revenue on the Fiscal Year 2019 budget appropriations.

The governor’s recommended budget for VIDOE is $172,209,001. In comparison to the appropriation for FY 2018, this is an increase of $5,158,171. The financial breakdown is as follows: $102,531,874 for personnel services, $45,987,889 for fringe benefits, $3,998,910 for supplies, $13,200,328 for other services and charges, and $6,500,000 for utilities. “The primary areas impacted by the increase mentioned above are salary increases for the proposed bargaining unions,” said Commissioner of Education Ann McCollum.

“Can you explain the increase of personnel services?” asked Sen. Jean Forde. Gerda Sebastian, Director of Business Affairs and Budget Control stated that $1,000,000 is for vacant positions, $10,000,000 for contractual negotiations, $1,800,000 to fund the Substitute Teacher Pool, $6,158,276 for exempt positions and $83,573,5898 for classified positions. “The recommended budget allows VIDOE to maintain its current staffing level of 2,195 employees,” added Commissioner McCollum.

“Who determined the figures of $10,000,000 for contractual services?” asked Sen. Vialet. Commissioner McCollum stated that the Office of Management and Budget and the Chief Negotiator projected the numbers for FY 2019 for contractual services. Then Sen. Vialet inquired of the role of Witt O’Brien with VIDOE. Thomas Allen, Chief of Staff of VIDOE, stated that Witt O’Brien had provided hurricane disaster relief estimated at $150,000,000 to assist VIDOE throughout the U.S. Virgin Islands.

Territory-wide, there was a total of 1,471,676 school lunches distributed through the National School Lunch Program (NSLP) and 503,073 breakfasts served through the School Breakfast Program (SBP) in the School Year 2017-2018. The combined reimbursements for SY 2016-2017 was $4,918,989.86. However, VIDOE experienced a decline in reimbursement for SY 2017-2018.

“Why is there a significant reduction in reimbursement for School Year 2017-2018?” inquired Marvin Blyden. Commissioner McCollum said, “The NSLP and the SBP have earned a combined reimbursement value of $1,673,143.47. The reimbursement loss of $3,245,846.39 is because of the impact of Hurricanes Irma and Maria; which has also adversely affected student enrollment.”

Separately, the Virgin Islands Career and Technical Education Board (CTEB) shared the FY 2019 recommended budget. Ilene Garner, Chair of CTEB stated that the governor’s recommended budget for FY 2019 is $509,350. The funds include $55,000 for textbooks, $45,000 for the National and Local Travel for students and $35,000 for teacher and professional development. “Technical programs are rapidly changing and becoming more complex. To ensure that our students are prepared to compete, they must stay on the cutting edge of existing and emerging technologies,” said Garner.

Similarly, Marvin Pickering, Director of the Bureau of Internal Revenue shared the governor’s recommended budget for FY 2019 totaling $12,578,546. The budget breakdown is as follows: $6,777,230 for personnel services, $3,027,688 for fringe benefits, $82,500 for supplies, $2,275,128 for other services and charges, $100,000 for capital outlays, $235,587 for communication and $316,000 for utilities.

Senators present are Kurt Vialet, Brian Smith, Neville James, Dwayne DeGraff, Tregenza Roach, Marvin Blyden and, Nereida Rivera O’Reilly                                                   Photos: http://www.legvi.org/committeemeetings/Media                                                           ###

V.I. DIVISION OF PERSONNEL REQUESTS $42,452,580 FOR FISCAL YEAR 2019

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ST. THOMAS- Members of the Committee on Finance chaired by Sen. Kurt Vialet, held a meeting at the Capitol Building on Tuesday to receive testimony from the V.I. Division of Personnel (DOP) and the Dept. of Public Works on the Fiscal Year 2019 budget appropriations.

The Governor’s recommended FY 2019 budget for the Division of Personnel total $42,452,580. Divided into two categories are $41,905,465 for the General Fund and $547,115 for the Indirect Cost Fund. The General Fund breakdown is as follows: $1,931,387 for personnel services, $5,000 capital outlays, $804,136 for fringe benefits, $39,524 supplies, $38,984,618 for other services and charges, $140,800. The Indirect Cost Fund breakdown consists of $373,606 for the personnel services, $149,689 for fringe benefits, $2400 for supplies and $21,420 for other services and charges.

“Can you expound on why there is a significant increase in the General Fund for FY 2019?” asked Sen. Kurt Vialet. Milton Potter, Director of the DOP, said, “In this year’s budget the appropriations are higher because items normally carried under the Miscellaneous Fund is now a part of the General Fund budget.”

Sen. Tregenza Roach stated that according to the Post Audit Report, in the miscellaneous section of the General Fund there is $275,000 for administrative expenses as it relates to the Health Insurance Board. In response, Maureen Venzen, Chief Group Health Insurance for DOP said, “The monies cover stipends, travel, and training of board members. A portion of the funds is allocated for contractual services as well. The board does not have employees.”

As it relates to the Group Health Insurance, thus far, DOP has paid $102,027,226.74 in healthcare premiums. The Government’s portion is $66,317,697.38 and Employees/Retiree share is $35,709,529.36. The total participants in the insurance plan are 13,763 to include government employees and retirees’ territory-wide. “Annually government employees have to take the Health Risk Assessment. Are negotiations completed for the request for proposal (RFP) for a carrier?” inquired Sen. Vialet. Director Potter stated that DOP is finalizing the contractual process and is hoping to complete this by August 2018.

Similarly, the Department of Public Works (DPW) shared the FY 2019 budget. Nelson Petty Jr., Commissioner of DPW, stated that the governor’s recommended budget is $18,550,536 this is an increase in comparison to FY 2018 budget of $18,260,536. Additional monies that DPW will receive are $500,000 from the St. John Capital Improvement Fund, $300,000 from the Tourism Revolving Fund, $1,000,000 from the Anti-Litter Fund and an estimated $17,165,215 in Federal Highway Administration and the Federal Transit Administration.

Senators present are Kurt Vialet, Tregenza Roach, Dwayne DeGraff, Neville James, Nereida Rivera O’Reilly, Jean Forde, Myron Jackson, Novelle Francis and Marvin Blyden. Photos: http://www.legvi.org/committeemeetings/Media                                                                ### 

V.I. DEPARTMENT OF JUSTICE REQUESTS $422,493,985 FOR FISCAL YEAR 2019

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ST. THOMAS- Members of the Committee on Finance chaired by Sen. Kurt Vialet, held a meeting at the Capitol Building on Tuesday to receive testimony from the V.I. Department of Justice and the Public Service Commission on the Fiscal Year 2019 budget appropriations.

Governor Kenneth Mapp’s recommended budget for the Department of Justice totals $22,493,985. The budget breakdown is as follows: $15,209,397 from the General Fund, $805,000 from the Miscellaneous Section and $6,497,588 from non-appropriated Federal Funds. “Are the federal grants appropriately utilized?” inquired Sen. Marvin Blyden. The Dept. of Justice Chief Financial Officer Kaj Williams stated that all federal grants are expended appropriately.

“The Post Audit Report states that telecommunication services are $85,244. Please explain,” said Sen. Kurt Vialet. CFO Williams stated that the Dept. has an outstanding balance of $15,000 for telecommunication services. The remaining balance covers telecommunication expenses for the rest of FY 2019. Sen. Vialet inquired about the rising costs of utilities from $157,000 as of March 30th to $314,000 by the end of FY 2019. CFO Williams stated that the Department is relocating to a new building on St. Croix and the utility cost may increase.

The Government of the Virgin Islands (GVI) paid claimants and plaintiffs for litigation and administrative tort claims. The total amount of settlements paid out of the Judgement Fund is $340,672.58. Currently, there has $207,739.68 paid out from over $25,000 Judgement Fund; $100,928.79 from the under $25,000 Judgement Fund; and $32, 004.11 from the Administrative Tort Claim Fund stated Joseph Ponteen, V.I. Chief Deputy Attorney General of the Dept. of Justice.

Similarly, the Department’s Medical Malpractice Review Unit has a total of 91 open cases. Thus far, there are 14 cases closed with settlements totaling $1,333,000. “Are the physicians required to pay or is it only the responsibility of GVI?” asked Sen. Nereida Rivera O’Reilly. Chief Ponteen said, “Medical practices are expected to pay the insurance companies for medical malpractice. Meanwhile, GVI is responsible for covering the balance of the settlements to the plaintiffs.”

Separately, the Virgin Islands Public Service Commission (PSC) shared their FY 2019 budget. Donald Cole, Executive Director of PSC, stated that the governor’s recommended budget is $1,779,975.45. Comparatively, this is a $2,108.93 reduction from the FY 2018 appropriation. Currently, PSC is operating from the 2017 revenue assessment of $1,782,084.37.

Senators present are Kurt Vialet, Tregenza Roach, Dwayne DeGraff, Neville James, Nereida Rivera O’Reilly, Jean Forde, Novelle Francis and Marvin Blyden. Photos: http://www.legvi.org/committeemeetings/Media                                                       ### 

Immediate Release – Finance Committee Resumes Budget Hearings on Tuesday, July 10, 2018

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For Immediate Release
July 9, 2018

St. Croix—The Committee on Finance resumes budget hearings tomorrow, Tuesday. July 10, 2018 in the Earle B. Ottley Legislative Hall on St. Thomas.
The Committee is scheduled to consider three departmental Fiscal Year 2019 Budget Proposals beginning with the Department of Justice at 9:00 a.m.;, 1:00 PM, Public Services Commission and at 3:00 PM the Bureau of Internal Revenue.

GOVERNMENT AGENCIES GET BUDGET CUTS

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ST. CROIX- The Committee on Finance chaired by Senator Kurt A. Vialet held a budget hearing on Thursday at the University of the Virgin Islands Great Hall, St. Croix with several government agencies. The agencies were V.I. Fire Services (VIFS); V.I. Police Department (VIPD); V.I. Territorial Emergency Management Agency (VITEMA; and Law Enforcement Planning Commission (LEPC).

Testifying for VIPD, Commission Delroy Richards said the Fiscal Year 2019 recommended budget for VIPD is $63.6 million. The General Fund appropriation is $60,551,208 which represents a decrease of $2,531,208 from the 2018 appropriation of $63,082,416.

Comm. Richards told committee members that Consent Decree budget is $1,867,562 and miscellaneous appropriation total to $325, 000. According to him, VIPD is expected to receive approximately $2,147,833 in federal funds for the Fiscal Year 2019.

In respect to the increased in entry-level pay increases, Comm. Richards said that in May, VIPD increased entry-level salary from $30,000 to $40,000 and police academy recruit pay from $27,00 to $30,000. He added that all officers with salaries below $40,953 (about 70-percent) will have their salaries increased to the baseline of $40,953.

VITEMA Director Mona Barnes said its Fiscal Year 2019 proposed budget is $18,200,294 it consists of $5,183,178 in appropriated funds and $13,017,116 in non-appropriated funds. According to the Director, the agency is expected to receive approximately $12,410,288 in federal funds.

Regarding the 911 system, Barnes told committee members that VITEMA requested $606,000 from the Emergency Services Fund to take care of equipment repairs and training for Emergency Call Centers operators. Furthermore, some of the money will be used to transition 911 centers to “next Generation 911 centers which, she added will be a more efficient and “self-effective “digital system.”

Franz Christian, Director of LEPC said the agency’s recommended operating budget for the Fiscal Year 2019 is $801,153. The FY2019 budget shows a 12.5-percent reduction of the fiscal year 2018 budget amounting to $114,449. He added that the General Fund budget contains salaries, fringe benefits, other services and utilities such as ret, telephone, inter-island travel, vehicle, and fuel costs.

Christian said in FY17, LEPC was able to secure approximately $2,487,690 in federal funds from Fy2017 Justice Assistance Grant (JAG), Juvenile Justice and Delinquency Prevention (JJDP); Juvenile Justice Prison Rape Elimination Act (JJPREA); Prison Rape Elimination Act (PREA); Residential Substance Abuse Treatment Grant (RSAT); Victims of Crime Assistance Grant (VOCA); and Violence Against Women STOP Grant (VAWA). To date, added Christian, for FY18 LEPC has applied for approximately $2,423,253 in federal funds.

V.I. Fire Service Director (VIFS), Clifford Joseph, said the agency’s total recommended operating budget for FY2019 is $21,121,447. Out of this, the General Fund appropriation is $18,934,637. According to him, 98-percent of this will be allocated to personnel costs and the rest mandatory costs such as rent, utilities, travel, and communications.

According to Joseph, the agency operates and or provide support to 11 fire stations throughout the territory and employs 282 personnel. Each employee is assigned to one of the agency’s three operational units. These units are the Suppression unit, the Arson Investigation and Prevention Unit and the Administrative Unit.

Committee members at Thursday’s Budget hearing were Chairman Senator Kurt A. Vialet, Marvin A. Blyden, Neville A. James, Nereida Rivera-O’Reilly, Brian A. Smith, Tregenza A. Roach, and Dwayne M. DeGraff. Non-Committee member was senator Novelle Francis, Jr.

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FHC PRAISED FOR SERVICE AND DLC BUDGET DECREASED

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ST. CROIX- The Committee on Finance chaired by Senator Kurt A. Vialet held a budget hearing on Tuesday in University of the Virgin Islands Great Hall. Testifying before the Committee members were the Frederiksted Health Care, Inc., (FHC) and the Department of Licensing and Consumer Affairs(DLC).
Masserae Sprauve Webster, Chief Executive Director FHC received decreases from the local allotment. In FY 2017, FHC did not receive $185,425.00 of their allotment fund. According to her FHC receive 12.5% cut which amounted to $286,740. This represents a loss of $472,165., which in her estimation resulted in the inability to fully respond to health care needs of the community.
Webster said FHC is requesting a local funding allotment for FY2019 in the amount of $2,640, oo0. To keep up with rising costs, respond to increasing demand for their services and to assist with the delivery of care to their vulnerable patients.
She pointed certain notable items that FHC provided to the community such as; (1) provided services to 8,634 patients and had 25,052 encounters in 2015; provided services to 9,551 patients and had 28,432 encounters in 2016; provided services to 9,914 patients and had 29,562 encounters in 2017; and expects to service 30,000 encounters in 2018 and 33,000 encounters in 2019.
Committee members praised and commended FHC for their commitment and dedicated services to the community by providing such services as (1) providing care to 180 homeless individuals and have housed 40 them in permanent housing; (2) since Hurricane Maria, began offering services on Saturdays at the Ingeborg Nesbitt site and continues to offer each Saturday from 9a.m. to 2p.m; in January 2018 acquired an additional satellite site in Mid-island located at Sion farm commercial center; and on March 23 and 24 2018 expand dental care to meet the needs of the community because FHC continues to be the only public dental provider.
Webster told Committee Members that their outreach efforts have become more focused on critical at-risk populations, and as a result, they have had several people who were newly diagnosed as HIV positive. They know, she added that the HIV/AIDS epidemic continues to hit the island hard, and they remain dedicated to addressing the prevention strategies that are necessary by working with young people and adults to be more responsible with their sexual health.
In respect to the homeless, Webster stated that FGC provides medical, dental and behavioral services to homeless individuals; meals, baths, clothing, shoes, and haircuts are offered to those who attend. Furthermore, each clinic has served about 35 homeless individuals and each month about 25 are follow-up patients and usually, they serve 10 new patients.
According to her FHC has partnered with several business owners to make condoms accessible. They have 80 condom dispensers in 60 sites and distributed over 125,000 condoms to local bars and restaurants each year. Webster said FHC has sought and continue to seek additional funding through grant applications as they become available. Other testifiers for FHC were Jacquelyn Rhymer-George, Chief Financial Officer and Stanley Jones, FHC’s Board Treasurer.
Devin Carrington, Commissioner, Department of Licensing and Consumer Affairs (DLC) said Appropriation from the General Fund for 2017 Expenditure was $3,228,734 and that appropriation recommended for 2018 and 2019 respectively were $3,831,510 and 3,473,276. This he added, came to a reduction of approximately $358,234.
According to the Commissioner, most recently, DLC collected a substantial fine from K-Mart Corporation pertaining to price labeling. They also settled a case of price gouging at the Pueblo Supermarkets in St. Croix and St. Thomas where customers charged prices for batteries that were more than the submitted price list. Furthermore, they are in the process of revoking the license of a charter boat operator that charged excessive prices for services between St. Thomas, St. Croix and San Juan, Puerto Rico.
Carrington added that DLC is moving ahead with its plan for the rehabilitation of the Vendors Plaza in downtown Charlotte Amalie, St. Thomas and is implementing its plan to provide more robust staffing in St. John.
Other testifiers for DLC were Frederick, General Counsel, Horace Graham, Director Division of license, Joycelyn McFarlande Manager; Administrative Services, Nathalie Hodge, Assistant Commissioner, Ann O’Neil District Counsel, and K’wanda Daniels, Executive Officer to the Commissioner.
Committee members at Tuesday’s budget hearing were Chairman Senator Kurt A. Vialet, Neville A. James, Nereida Rivera O’Reilly, Brian A. Smith, Tregenza A. Roach, Marvin A. Blyden, and Dwayne M. DeGraff. Non-Committee Members were Senators, Positive T.A. Nelson, and Janelle K. Sarauw.

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COMMITTEE UPDATED ON THE HURRICANE RECOVERY PHASES, PROJECTS AND TIMELINES

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St. Thomas – The Committee on Finance chaired by Sen. Kurt Vialet, held a meeting at the Capitol Building on Wednesday, to receive an update post-Hurricane Irma and Hurricane Maria on entities administered to assist with the hurricane recovery phases of the Government of the Virgin Islands to include projects and timelines.

“This is not a budget hearing. This meeting is about the hurricane recovery process. The public consistently has inquiries concerning the entities hired by the Government of the Virgin Islands (GVI) and what their roles are in the Territory,” said Sen. Vialet.

V.I. Public Finance Authority Executive Director Valdamier Collens shared the update. Witt O’Brien’s and Ernst & Young are the leading firms partnering with GVI to assist with the hurricane recovery process.

The primary responsibility of Witt O’Brien’s are program management and implementation of FEMA’s Public Assistance and Hazard Mitigation Grant Programs such as HUD’s Community Development Block Grant and the Disaster Recovery Program. Thus far, Witt O’Brien has developed damage description, scopes of work, and the creation of project worksheets and Hazard Mitigation Grant application Territory-wide. Short terms tasks include WAPA debris removal, Sheltering Temporary Essential Power Program and the HUD Community Block Grant.

Ernst & Young, tasked with assisting GVI with compliance, monitoring, oversight and transparency for Key Grant Programs such as FEMA Public Assistance and Hazard Mitigation Grant Programs; monitoring FEMA Community Disaster Loans and Commercial Insurance Claims. Some of their assignments include assisting V.I. Territorial Emergency Management Agency (VITEMA) with addressing public assistance assignment for GVI applicants and private non-profit applicants. As of May 26, 2018, 237, project worksheets are totaling $1,055,057,798.30 that is funded by FEMA.

The timetable for completion of worksheets and target dates are currently unknown due to challenges such as cost estimates, developing scopes of work and finalizing worksheets due to administrative appeals. Completed projects should occur within 18 months of the start date. However, GVI can request an extension if necessary; according to Executive Director Collens.

“There are a lot of project worksheets that are going through VITEMA. I don’t believe that VITEMA is sufficiently staffed to review all of them promptly. Many of the small businesses are unable to sustain themselves without payment for their services,” said Sen. Marvin Blyden.

Similarly, Domingo Camarano, Vice President, AECOM shared an update on Emergency Home Repairs VI Program (EHRVI). To date, there are 1900 repaired homes. There are 10,000 applicants and 7,400 households eligible for repairs. “Hurricane season is upon us, how many homes out of the 10,000 are already completed?” asked Sen. Janelle Sarauw. Vice President Camarano stated that there are 1500 repaired homes with 5,000 more to be completed by the August 15, 2018 deadline.

“Considering that the deadline is in two months, what is the weekly average of completed home repairs?” inquired Sen. Blyden. In response Darryl Griffith, Executive Director, V.I. Housing Authority stated that there are 50 completed homes per week.

The value of AECOM’s contract is $186.6 million. Invoices were sent and reviewed by Witt O’Brien’s, Ernst & Young and others.  However, the FEMA-funded program has yet to receive payment for their services stated Vice President Camarano.  “Payments seems to be delayed because the federal guidelines are not designed to meet structural needs of homes built in the Virgin Islands.  Sheetrock, cleaning or repairing cisterns, and replacing downspouts are construction repairs that are heavily needed for the homes Territory-wide,” said Sen. Vialet.

Executive Director Griffith shared the financial breakdown of EHRVI funded through a FEMA Progress Worksheet (PW).  The first PW totals $186,650,000; this covers construction for in-home repairs. FEMA obligated the funds, and it is currently available. The second PW totals $152,899,348. This PW covers construction management, mobility, a call center, insurance, and program management. However, the monies were not obligated.

Separately, lawmakers received testimony on the Lease Agreement between the Government of the Virgin Islands, acting through the Commissioner of the Department of Property and Procurement(“Lessor”) and Industrious Auto Repair, Inc. (“Lessee”).

Vincent Richards, Deputy Commissioner of Property and Printing Divisions of the Virgin Islands Department of Property and Procurement, shared the update. The lease agreement is for 20 years and is effective upon the approval of Governor Kenneth Mapp and the Legislature of the Virgin Islands. There will be an annual rent of $28,000 initially and is payable through monthly installments of $2,400. The terms of the lease include allowing a long-term tenant to invest and restore a government property damaged after Hurricane Irma and Hurricane Maria and to expand existing operations.

Senators present are Kurt Vialet, Brian Smith, Marvin Blyden, Jean Forde, Tregenza Roach, Dwayne DeGraff, Janelle Sarauw, Novelle Francis and Positive Nelson.

Photos: http://www.legvi.org/committeemeetings/Media                                                           ###

SENATORS PLAN TO RECOMMEND STRUCTURAL CHANGES TO FISCAL YEAR 2019 PROPOSED BUDGET

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ST. THOMAS– The Committee on Finance, chaired by Sen. Kurt Vialet, convened at the Earle B. Ottley Legislative Hall on Tuesday to receive testimony from Governor Mapp’s Financial Team regarding the Overview of the Fiscal Year 2019 Proposed Executive Budget.

The Director of the Office of Management & Budget, Julio A. Rhymer, noted that with the assistance of the Federal Government and billions of dollars approved for the territory, the budget amount; $1.278 billion, reflects a sustainable balanced budget that includes a five-year forecast to provide fiscal guidance. It is funded by $851.34 million in local funds and $238.66 million in federal funds. The budget outlay includes $150 million in debt service payments and $38 million in income tax refunds.

Chairman Vialet commended the Financial Team on their efforts to address parts of their unfunded liability under GERS and that the infusion of money included in the proposed budget is $10 million more than usually received. He also stated the $131.69 million projected in new revenues were well justified in the documents submitted although, “There will be challenges trying to pass a budget without all collective bargaining agreements in place. If we cannot achieve a final cost before September, supplemental appropriations can be made for the Fiscal Year 2019 budget.”

“The increase in funding presented must include a combination of austerity measures and creativity applied when considering the reassignment of our workforce. Entities such as the Bureau of Economic research should be placed under the Office of Management and Budget,” said the Chairman.

Chief Negotiator Tang-How stated though contract negotiations are ongoing, their bottom-line figure of $14 million is developed, adjusted and reviewed in collaboration with OMB to ensure accuracy. Members present agreed that further clarification and reports on those figures will be requested through the Chair.

The Governor proposed to address outstanding employer contributions to GERS with an additional 3% in its employer contributions; 20.5 to 23.5%, over the next three years and increase the benefits of retirement to $75,000. Through the Virgin Islands Housing Finance Authority, the GVI also plans to acquire 290 acres (170 on St. Croix; 120 on St. Thomas) of non-performing assets from the retirement system to continue the $7 million annual contributions from the Matching Funds Revenues.

The Fiscal Year 2019 general fund expenditure budget request allocated $639 million to the executive branch departments and agencies. Majority Leader Neville James questioned the decision to reduce some allocations while boldly increasing others. He expressed his concern on the focus in creating this budget calling the reduction of $1 million in the Legislative and Judicial branches unfortunate. Sen. Janelle Sarauw asked if there were any plans considered to restore the 8% pay cut. Commission Collens replied, “My understanding as the law is written, we can begin to accumulate those funds; roughly $65 to $68 million owed, in 2021 by utilizing the Environmental Impact Fee.”

The members of the Governor’s Financial team present during today’s testimony: Valdamier Collens, Commissioner of the Dept. of Finance; Marvin Pickering, Director of the Bureau of Internal Revenue; Ira Mills, Tax Assessor; Office of the Lt. Governor; Attorney Natalie Tang-How, Chief Negotiator of the Office of Collective Bargaining; and Milton Potter, Director of the Division of Personnel.

Committee members present during today’s hearing: Senators Kurt Vialet, Marvin Blyden, Neville James, Nereida Rivera-O’Reilly, Brian Smith, Tregenza Roach and Dwayne DeGraff. Non-committee members present include Senators Jean Forde, Novelle Francis, Alicia “Chucky” Hansen, Myron D. Jackson, Janette Millin-Young, Positive Nelson and Janelle Sarauw.

“As we continue this process, I encourage my colleagues and representatives from all agencies to consider measures that will make our government more efficient,” concluded Chairman Vialet.

The Committee on Finance will convene today at 9:30 a.m. in the Earle B. Ottley Legislative Hall on St. Thomas to receive testimony on: The status of programs administered in the territory post hurricanes, the recovery phase and BR17-0719; Lease Agreement between the GVI, acting through the Commissioner of the Department of Property and Procurement(“Lessor”) and Industrious Auto Repair, Inc. (“Lessee”).

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COMMITTEE UPDATED ON THE CIGNA HEALTH INSURANCE COVERAGE

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St. Thomas – The Committee on Finance chaired by Sen. Kurt Vialet, met with officials from Health Insurance Industry at the Capitol Building on Wednesday, to receive testimony on the recent rate changes to the Government of the U.S. Virgin Islands Health Insurance Coverage under Cigna.

“The process of negotiations for health insurance policy was placed on hold because of Hurricane Irma and Maria that hit the Territory. The Governor’s recommendation was to increase the government/employee contributions from 65%/35% to 60%/40% for active government employees and retirees and 50%/50% for retirees under 65 years old. As a result of the hurricanes and a rollover budget the cost share has remained the same,” said Sen. Vialet.

“Can you expound on the impact of 60%/40% vs 65%/35% of government and employee contributions?” inquired Sen. Marvin Blyden.  Kurt Gehring, Chief Executive Officer for Gehring Group, stated that the 60%/40% increases the premium to $165 million. There is a 2% risk charge due to the possibility of healthy family members terminating their coverage while sick family members remain on the plan. By maintaining the 65%/35%, it is advantageous to accept the renewal with no changes to the existing health care cost share.

The 60%/40% also increases the employee’s share of the premium to $11.6 million; while the existing insurance plan increases it by $2.4 million added Beverly Joseph, Chairperson of the Government Employees Service Commission Health Insurance Board.

Sen. Brian Smith stated that increasing premiums could adversely affect government employees. “The 60%/40% plan places a financial burden on government employees. The salaries of the employees do not increase as fast as the insurance premiums.”

The original renewal request was for a 15.8% increase. However, after several negotiations with the Government of the Virgin Islands, it was agreed for 5% for the Medical Plan and 3.9% for the Dental Plan. The 5% was contingent upon the contribution split remaining at 65%/35%; according to Dorothyann Callahan, Sr. Client Manager for Cigna.

“Every year we aim to reduce the cost of health insurance. However, it often remains the same. Can you quantify the 5%?” asked Sen. Positive Nelson.  In response, Scott Evelyn, Market President for Cigna South Florida/Caribbean said, “The 5% or $6 million was a projection based on a formula to negotiate the reduction of health insurance rates.”

Sen. Jean Forde asked, “What drives the cost of insurance?” Joseph said, “Insurance rates increases based upon the number of claims filed by employees. The highest claims in the Territory are for high blood pressure, diabetes, cancer, muscular-skeletal and cancer.”
Ultimately, lawmakers are awaiting the health insurance package to be sent down from Governor Kenneth Mapp. Therefore, members of the Senate will ratify the package at a later date.

Committee members present are Kurt Vialet, Dwayne DeGraff, Tregenza Roach, Novelle Francis, Neville James, Brian Smith, Marvin Blyden. Non-committee senators are present Janette Millin Young, Positive Nelson and Jean Forde.

 

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