Category: Finance

COMMITTEE UPDATED ON THE CIGNA HEALTH INSURANCE COVERAGE

Download PDF

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.

 

 ###

COMMITTEE MEETS WITH GOVERNOR’S FINANCIAL TEAM TO DISCUSS FY 2018 BUDGET

Download PDF

St. Thomas – The Committee on Finance chaired by Sen. Kurt Vialet, held a meeting at the Capitol Building on Tuesday, to receive testimony from the Governor’s Financial Team on the rollover appropriations from FY 2017 to FY2018 Budget.

“At the end of this meeting, we will have a better understanding of the FY 2018 status. The goal is to determine a budget that will cover January 1st-September 30th for FY 2018 based on the numbers from FY 2017,” said Sen. Vialet.

“The estimated revenue loss $436.6 million, combined with an estimated expenditure increase of $29.4 million to open a $453 million gap; which partially offset by the approval of $250 million Community Disaster Loan with a remaining deficit of $203 million,” said Director Bowry. “The baseline budget for FY 2018 is $81.1 million less than the FY 2017 roll over appropriations. Therefore, the FY 2018 budget is $284.1 million.”

Nellon Bowry, Director of the Office of Management and Budget, stated that the damage as a result of Hurricanes Irma & Maria adversely affected the FY 2018 Executive Budget for the Government of the Virgin Islands by reducing revenues and increasing expenditures.

Sen. Vialet said, “We had an opportunity to review the documentation. The estimated revenue projections and revenue loss are a result of the Governor’s Financial Team early assessment of the damage caused by the two hurricanes. For the Legislature to move forward with the FY 2018 budget, we want to make sure that all numbers are accurate. We need updated information so that the Government of Virgin Islands will be able to meet their financial obligations.”

###

SENATE PRESIDENT ANNOUNCES POSTPONEMENT OF MEETINGS DUE TO IRMA

Download PDF

ST. THOMAS – Senate President Myron D. Jackson announces that legislative meetings scheduled for the week of September 4 to 8 are postponed, due to the impending arrival of Hurricane Irma. The public will be informed of new dates. A final determination regarding the Legislative Session scheduled for September 8 will be made once the storm passes and its impacts are determined, he said.

Regarding the operations of the Legislature on all three islands, legislative employees are expected to report to work for 8 a.m. on Tuesday to secure their offices and, upon completion, will be allowed to leave at noon to continue their hurricane preparations at home. Casual wear is encouraged.

Based on reports from the National Hurricane Center and VITEMA, President Jackson said the Virgin Islands will likely be impacted by wind, rain, and ocean surge, particularly in the northern areas.

“As those reports are received I shall inform the public, all senators and our staff as to the operations of the Legislature,” he said. “All persons should therefore carefully monitor the media, including LEGIT TV – which can be accessed on Channel 5 throughout the territory, for announcements which may inform as to the operational status of the Legislature during the affected period.”

President Jackson said that the Legislature shall operate during this period only as weather conditions permit.

“Should the weather dictate the cessation of our operation for safety and health concerns, those decisions shall be made promptly and specific announcements shall be made,” he said. “I offer a prayer that all persons in the Virgin Islands, the Leeward and Windward Islands, and elsewhere be spared from Hurricane Irma. Please look to protect your families, friends, and properties be safe.”

###

SCHNEIDER REGIONAL MEDICAL CENTER REQUESTS $34.9 MILLION FOR FY 2018

Download PDF

St. Thomas – The Committee on Finance chaired by Sen. Kurt Vialet, held a meeting at the Capitol Building on Wednesday, to receive testimony on an overview of the Fiscal Year 2018 Budget from the Schneider Regional Medical Center (SRMC).

For FY 2018, SRMC requests $34.9 million as the total for operations and an additional allotment for Capital of $5 million to address infrastructure and equipment needs. The allotment will also assist in the required funding for the Government Employees Retirement System (GERS) conversion of $2.9 million. However, SRMC is facing financial challenges that may affect current operations for FY 2017.

“The $7 million that SRMC requested for FY 2017, to operate at current full services and did not receive was shouldered by our vendors, the Water and Power Authority (WAPA), and the Internal Revenue Bureau (IRB). SRMC account payables increased by $8.3 million since the beginning of FY 2017,” said Bernard Wheatley, Chief Executive Officer of SRMC.

Sen. Dwayne DeGraff inquired about the outstanding debt owed to GERS. In response, Scott Nothnagel, Chief Financial Officer of SRMC stated that $639 million owed to GERS for employer contributions for health premiums and vendors are owed $38.7 million for delinquent employer contribution payments to GERS.

Additional outstanding obligations include $1.7 million to IRB and $10.1 million for WAPA. SRMC is requesting an additional $3.6 million to settle both debts.

“What are the billing and collections averages per month?” inquired Sen. Vialet. CFO Nothnagel stated that as of March 2017, there had been an increase in its collections averages from $4.1 million to $4.6 million.

Sen. Vialet asked, “Is there someone assigned who ensures that charts are completed per floor for patients with insurance so that the bills can be distributed timely?” CFO Nothnagel said, “SRMC has a tracking mechanism for the completion of charts.” Sen. Vialet advised that hospital needs compensation for all services because the monitoring system is not enough. There needs to be an employee that overlooks the completion of all charts.

Lawmakers also addressed SRMC’s heavy reliance on travel nurses vs hiring of local nurses. “It is wrong that travel nurses have a higher salary. They earn double of what a nurse makes who graduated from the University of the Virgin Islands,” said Sen. Brian Smith.

CEO Wheatley said, “A successful negotiation with the Office of Collective Bargaining to update the Nursing Union Collective Bargaining was signed by the Governor in September 2016 to appropriate $500,000 to increase salaries for nurses locally. However, only $375,000 was received.”

The total needed to implement the rate increases and to fill 20 critical nurse vacancies at SRMC is $1.1 million. If this happens, there will be an annual savings of $1.3 million for the hospital added CFO Nothnagel.

Sen. Vialet asked, “Are qualified local nurses not hired by SRMC?” CFO Wheatley stated that the reason why there are more travel nurses than local nurses is that there are not enough people locally who are meeting the qualifications to become a nurse. The requirements are to have the appropriate college education and to pass the NCLEX Exam.

Separately, U.S. Virgin Islands Economic Development Authority (VIEDA) and St. Thomas East End Medical Center Corporation (STEEMCC) also shared the FY 2018 budget.

Acting Chief Executive Officer Wayne Biggs, Jr. stated that the FY 2018 budget request for VIEDA is $5,882,865. Comparatively to FY 2017, this is a reduction of $400,000. Areas that are affected by the cutbacks and the allocated amounts are $150,000 for the Incubator Program, $100,000 for marketing initiatives and $150,000 for the Cost Benefits Analysis.

For FY 2018, some of the primary objectives of VIEDA are to develop local and non-local marketing strategies, design a comprehensive five to ten-year plan for VIEDA and to complete the rules and regulations for the Hotel Development Act, International Financial Services Entities Program, Tax Increment Financing and the Youth Recreational Incentive Act.

Moleto Smith, Jr., Executive Director of STEEMCC is requesting $2,074,988 for FY 2018. Additional funding sources include $3,998,939 from the Program Income, $2,074,988 from Government of the Virgin Islands Grant and $1,809,380 from the Federal Grant. Projected expenditures for FY 2018 totals $7,883,307. The expenses include personnel services, fringe benefits provider services, medical programs, supplies, facility and other services.

Committee Members present are senators Kurt Vialet, Nereida Rivera O’Reilly, Dwayne DeGraff, Tregenza Roach, Neville James and Brian Smith.  Non-committee member Sen. Janelle Sarauw was also present. The next Committee on Finance meeting is on Tuesday, September 5th at the Fritz E. Lawaetz Conference Room on St. Croix.

###

V.I. DEPARTMENT OF AGRICULTURAL REQUESTS APPROXIMATELY $4 MILLION FOR FY 2018

Download PDF

St. Thomas – The Committee on Finance chaired by Sen. Kurt Vialet, held a meeting at the Capitol Building on Tuesday, to receive testimony on an overview of the Fiscal Year 2018 Budget from the Virgin Islands Department of Agriculture (VIDOA).

The Fiscal Year 2018 General Fund Budget for VIDOA is $4,084,440. Comparatively to FY 2017 this is $502,560 or 10.96% reduction. VIDOA is also anticipating an appropriation of $870,000 from the Miscellaneous Section, $255,000 for the Agriculture Revolving Fund, $1,000,00 from the Tourism Revolving Fund, $563,898 for Federal Funds and $500,000 for drought relief.

“VIDOA is supposed to receive $500,000 for the Miscellaneous Fund,” said Sen. Vialet. Carlos Robles, Commissioner of VIDOA, said, “By Act 6836, those monies are required to be a part of the overall budget. However, this has not been the case for several years. For FY 2018, VIDOA will finally receive the $500,000.”

According to the Post Audit report, from FY 2017 to FY 2018 the budget for personnel services has decreased by $83,000. Sen. Brian Smith inquired if the reduction affects critical vacancies. In response, Director of Administration and Management of VIDOA Delreese Brown said, “Yes, some of the key job openings include a heavy equipment mechanic, three heavy equipment operators, three butchers, an accountant, industrial engineer, property manager, horticulturalists and a maintenance supervisor.”

“The director of the Office of Management and Budget stated that for FY 2018, $1.5 million is allocated to fill critical vacancies in all departments,” said Sen. Tregenza Roach. He asked, “What is the cost for the vacancies at VIDOA?” Director Brown stated that approximately $375,000 is needed.”

Sen. Vialet also had inquiries concerning VIDOA funds that are received quarterly.

“How much monies do VIDOA receive from VLT’s?” asked Sen. Vialet. Director Brown stated that $11,000 every quarter and the funds go towards any animal issues that Director of Veterinary Services Dr. Bethany Bradford may be experiencing. Additionally, Sen. Vialet asked, “Do VIDOA get $1500 quarterly from the Casino Fund?” Director Brown stated that an estimate of $20,000 per quarter is received and it goes into the Agriculture Revolving Fund.

In addition to VIDOA, the Office of the Territorial Public Defender (OTPD) and the Virgin Islands Public Broadcast System (WTJX) shared the FY 2018 Budget.

For FY 2018, The governor’s recommendation is $4,227,120. This is almost $300,000 less than OTPD request of $4,560,000. The budget breakdown is as follows. Personnel services are $2,700,000, capital outlays are $160,000, fringe benefits are $850,000, supplies are $149,000, other services are $595,100, utility services are $106,000.

Samuel Joseph, Chief Public Defender, justifies the $4,560, 000 based on current caseloads, resources and commitment of the staff. “As of June 30, 2017, the current workload is 692 cases territory wide. There are 20 cases pending appeals before the Virgin Islands Supreme Court,151 new cases have appointed on St. Croix and 146 new cases in the St. Thomas/St. John District,” said Chief Joseph.

Tonya-Marie Singh, Chief Executive Officer and Chief Operating Officer of WTJX stated that the FY 2018 budget request is $4,400,000. The budget breakdown is as follows: Fringe benefits are $857,149, supplies are $80,000, capital outlays are $26,500, personnel services are $980,390, utility costs are $208,849, and other services and charges are $1,247,112.

Committee Members present are senators Kurt Vialet, Nereida Rivera O’Reilly, Dwayne DeGraff, Tregenza Roach, Neville James and Brian Smith.  Non-committee member Sen. Janette Millin Young was also present. The next Committee on Finance meeting is on Wednesday, August 30th at the Capitol Building.

###

OTAG, DSPR AND DOL DEFEND FY 2018 BUDGET APPROPRIATIONS

Download PDF

St. Croix–The Committee on Finance, chaired by Senator Kurt A. Vialet, met on Wednesday in the Frits E. Lawaetz Legislative Conference Room on St. Croix for its Fiscal Year 2018 budget hearing from the Office of the Adjutant General (OTAG), Department of Sports, Parks and Recreation (DSPR), and the Department of Labor (DOL).

According to Brigadier General, Deborah Howell OTAG is requesting an annual appropriation of $1,102,317 in territorial funds slightly lower than last year’s request. She said the requested FY2018 fund was sufficient to support their priorities. She said the V.I. Government payroll supports 34 territorial employees; 26 are 100-percent federally funded including 17 Base Security Guards, 3 are 75-percent federally funded and 5 are 100-percent territorially funded. She pointed out that the federal full-time support force of 288 personnel exists to ensure that they are always ready.

In summarizing the budget request, Sylma Sablon, Director of Administration and Business Management said the appropriation of $60,800 for the miscellaneous budget of OTAG for FY 2018 is earmarked for the National Guard’s Pension Fund. She added that a stipend of $100 monthly is paid to every qualified retired National Guard member who has reached the age of 55 and who is eligible.

In regards to the $5,400,051 projected federal funds that support the master cooperative agreement for FY2018, Sablon said $937,270 is for payroll of the Army National Guard which employ 23 full-time security Guards; $3,337,565 support the facilities and maintenance program; $193,000 is projected to cover the telecommunications program; $426,902 support environmental program; $102,616 for the Air National Guard operating and maintenance program; $122,100 for the distance learning program; $198,678 support the electrical security system; and $81,920 for the anti-terrorism program.

With the $1,102,317 from the General Fund; the $60,000 miscellaneous fund; and the $5,400,051 federal projected allocation of $5,400,051, the total Funding projected for OTAG amounted to $6, 502,368.

Colonel Deborah Lobbenmeier, United States Property and Fiscal Officer for the V.I. National Guard said their federal revenue projected for the V.I. National Guard for FY2018 is approximately $48.4 million. This she added is a $2.3 million increased over FY2017.

According Lebbenmeier, of the $48.4 million, it includes $27.3 million for full-time employees’ payroll; $4.6 million for part-time soldiers; $5.0 million for services and supplies; $6.6 million for installation support and $4.7 million for operations and training. She pointed out, in addition to their budget, they estimate an additional two to three million dollars to enter the territory from indirect support to the National Guard.

Lebbenmeier told the Committee that the federal monies received demonstrate the critical importance of the local government providing its share of matching funds to execute federal dollars and federal funding at the recommended level. She added that they have estimated that during FY2018, 75-percent or approximately $36.3 million will remain in the Virgin Islands economy.

Pedro Cruz, Commissioner of DSPR said their proposed FY2018 budget is $6,602,054 and it consists of $3,513,720 for Personnel Services; $1,805,733 for Fringe Benefits; $227,319 for Supplies; $307,548 for other services; and $747,734 for Utilities. The Commissioner added that they receive a quarterly allotment from the Casino Revenue Fund where in FY2016 they received $145,235 and for the past two quarters of FY2017, they have received $68,224.

In respect to the Territorial Parks Fund, he said last FY they collected $271,797 and for FY2017 to date, they have collected $133,590. These collections, he noted, derived from parks’ fees, rentals, and charges for the use or operation of facilities, concessions, open spaces, and recreation facilities.

As for the Athletics Fund, he said in FY2016 they have collected $51,388 and for FY2017, to date, they have collected $21,512. These fees are derived from the collection of sports and recreation programs.

In reference to DSPR Revenue, they have 91 vendor spaces territory wide—43 in the District of St. Thomas/St. John/Water Island and 48 in the District of St. Croix. Through these spaces and facilities, they have collected $133,590.

According to the Commissioner, The Paul E. Joseph Stadium/Terrence Martin Softball Park/Festival Village is in progress. He said after the surcharge earthwork and testing required for the geotechnical report is completed, there will be a period of inactivity for 90 days. This is necessary in order to allow the ground to settle and be firm for the construction of the stadium. He added that during the process of the surcharge earthwork, 30 local individuals have been hired. This number will dramatically increase during construction phase.

Other testifiers for DSPR were: Calvert White, Assistant Commissioner, District of St. Thomas/St. John; Craig Williams, Assistant Commissioner, District of St. Croix; and Elroy Hill, Deputy Director, St. John.

Catherine Hendry, Commissioner of DOL said their recommended funding for FY2018 is $5,057,357—$3,912,935 from the General Fund and $1,144,422 from the Government Insurance Fund. The total non-appropriated local funding is $798,156 and non-appropriated federal funding is $6,353,294 for a total budget of $12,208,807. According to her, this budget does not include the $1,500,000 under the miscellaneous section which is specifically to pay the interest payment on the Unemployment Trust Fund loan.

According to Commissioner Hendry, DOL Unemployment Division processed 1,516 new claims, paid $7,132,303 in benefits to eligible claims, collected $2,615,246 in contributions owed by employers, and collected $528,124 in surcharge. She added that in regards to the Worker’s Compensation Administration, they have handled 4,089 active cases; processed payments that resulted in $1,268,106 million being disbursed to injured workers; and paid $2,171,007 to medical services providers.

Other testifiers for DOL were: Wean Williams Farrell, Assistant Commissioner; Atty. Nesta Christian-Hendrickson, Legal Counsel; Chivonne Romnry-Lee, Director of Business and Administration; and Gary Halyard, Director of the Bureau of Labor Statistics.

Committee members at Wednesday’s budget hearing were: Chairman Kurt A. Vialet, Marvin Blyden, Neville James, Nereida Rivera-O’Reilly, Brian Smith, Tregenza Roach, and Dwayne DeGraff. Non-Committee members were Senators Alicia “Chucky” Hansen and Novelle Francis, Jr.

###

DEPARTMENT OF FINANCE REQUESTS OVER $4 MILLION FOR FY 2018

Download PDF

St. Thomas – The Committee on Finance chaired by Sen. Kurt Vialet, held a meeting at the Capitol Building on Tuesday, to receive testimony on an overview of the Fiscal Year 2018 Budget from the Department of Finance.

The FY 2018 recommendation for the General Fund Budget is $4,878,000. This is a 10% reduction of $564,750 in comparison to the FY 2017 Budget of $5,442,750. The proposed budget also includes $778,095 for the Government Insurance Fund, $217,749 for the Indirect Cost Fund and $5,873,844 for combined Appropriated Funds.

“Is the 10% reduction in the General Fund Budget attributable to the reduction of personnel services?” asked Sen. Tregenza Roach. Commissioner Collens said, “Yes, the department has removed positions in personnel that are not needed with respect to the Board of Tax Review.”

Sen. Vialet inquired about the increase of the Government Insurance Fund. Commissioner Collens said, “I don’t know why there is an increase but when we looked deeper, the department found that some employees have a family plan with more dependents. The fringe benefits increased because of that.”

The Department of Finance budget breakdown is as follows: $3,079,720 for personnel services, $1,143,551 for fringe benefits, $1,051,080 for other services and charges, $94,000 for capital outlays, $360,000 for utilities and, $$217,329 for supplies.

“In comparison to FY 2017, why is there a 66% variance for supplies for FY 2018?” asked Sen. Marvin Blyden. Commissioner Collens said, “In meeting the mandate, we recognized that it’s better to take stock of inventory rather than purchasing new supplies.”

Lawmakers also requested further information about the utility costs.

“In FY 2017, the utility cost was $667,000,” said Sen. Vialet. “However, for FY 2018 it is $360,000. This is a substantial decrease.” Commissioner Collens said, “We attributed the reduction to conservation efforts, which have decreased consumption and expenditures.”

Sen. Roach asked, “What are the expenditures to date for utilities?” Commissioner Collens stated that the department has expended $327,000 as of July 30th.

Separately, Margaret Guarino, Director of Finance and Administration for V.I. Public Finance Authority (PFA) stated that the FY 2018 budget has not been approved by the PFA Board. However, she said that the proposed FY 2018 budget will be used for operations, payroll and administrative expenses.

“Is there a significant difference in the governor’s recommended budget of $1.7 million for FY 2017 in comparison to FY 2018?” asked Sen. Brian Smith. In response, Director Guarino stated that it is currently the same.  Then Sen. Smith asked, “What is the debt ceiling for the government of the Virgin Islands?” Director Guarino stated that it is $1 billion. “How close are we to reaching it?” asked Sen. Smith. Director Guarino stated that we are $737 million away.

Senators also inquired about rum production and resolving the decline of the bond ratings. Sen. Vialet asked, “Is the rum production in FY 2017 the same for FY 2018?” Denise Rhymer, Legal Counsel for PFA said, “In comparison to FY 2016, there is a slight increase in terms of the rum cover over sold in U.S. during the first quarter of FY 2017.”

Sen. DeGraff inquired about the continual decrease in bond ratings and what is PFA doing to fix the situation. Valdamier Collens, Executive Director of PFA said, “PFA is working to fix this comprehensive task to increase bond ratings. One of the ways is to improve the internal metrics.”

In addition to the Department of Finance and PFA, the Virgin Islands Public Service Commission (PSC) and the Office of Management and Budget (OMB) also shared their FY 2018 budget requests.

Donald Cole, the Executive Director of PSC stated that the FY 2018 budget is $2,782,807. He also stated that the FY 2018 expenditures are $1,792,173.37. Personnel services and fringe benefits total $1,309,652.87, capital outlays is $9,200 and $473,320.50 covers electricity, water, office supplies, repairs and maintenance, automotive repairs, rent land/building, professional services, security, communication, advertising, transportation, insurance, travel and other services.

Nellon Bowry, Director of OMB stated that the appropriation request is $4.44 million this includes $2.45 million from the General Fund and $1.99 million from the Indirect Cost Fund.

Committee Members present are senators Kurt Vialet, Marvin Blyden, Neville James, Brian Smith, Tregenza Roach and Dwayne DeGraff. The next Committee on Finance meeting will be held on Wednesday, August 23rd at the Fritz E. Lawaetz Conference Room on St. Croix.

###

VIRGIN ISLANDS DEPARTMENT OF EDUCATION SHARES FY 2018 BUDGET

Download PDF

St. Thomas – The Committee on Finance chaired by Sen. Kurt Vialet, held a meeting at the Capitol Building on Friday, to receive testimony on an overview of the Fiscal Year 2018 Budget from the Virgin Islands Department of Education (VIDOE).

“During the last ten fiscal years, VIDOE has experienced severe budget shortfalls valuing $45,829,588 making it extremely challenging to meet all of the Department’s mandatory program needs. This year is no different,” said Sharon McCollum, Ph.D., Commissioner of VIDOE.

For FY2018 the General Fund recommended budget is $156,755,559. This is a reduction of $10,295,271 in comparison to $167,050,830 for FY 2017. The budget breakdown is as follows: $93,081,386 for personnel services, $39,962,587 for fringe benefits, $3,965,048 for materials and supplies, $11,494,660 for mandatory costs, and $8,251,878 for utilities.

“Can you expound on the $8,251,878 representing a 17% reduction of $1,748,122 that is for utility services?” asked Sen. Marvin Blyden. Commissioner McCollum said, “VIDOE has been diligent in managing electrical and water bills. If needed, supplemental funds can assist with costs.”

According to the post audit report, in FY 2017 the Federal E-Rate Reimbursement Trust non-appropriated funds was $8,225,804. This is a 69% reduction for FY 2018 representing $2,548,365.  “Comparatively, why is there a $6 million reduction?” inquired Sen. Blyden. Anthony Thomas, Chief of Staff for VIDOE stated that the challenges come from operational demand.

“The E-Rate Program covers specific aspects of the cost of technology servicing repairs for thirty-one Activity Centers. However, the E-Rate does not provide funding for supplies or damaged equipment that is caused by environmental challenges and unexpected power outages,” added Commissioner McCollum.

Lawmakers also inquired about Federal Funds, grants and awards.

“Can you give me a ballpark figure of Federal Funds allocated for Adult Education?” asked Sen. Vialet. Commissioner McCollum said, “It is approximate $1 million. The monies were in serious jeopardy because the former director did not submit the paperwork.” Sen. Vialet stated that it is important for individuals who are charged to overlook Federal Funds to do their jobs because the oversight can be costly.

Sen. Tregenza Roach said, “In terms of Federal Funds, the post audit reports states that the efforts to attain current grant status on awards remain unanswered.” Commissioner McCollum said, “There is no response to the post audit report because VIDOE has submitted status reports monthly to the Office of Management and Budget and Government House.”

Separately, for FY 2017 the reimbursable value of National School Lunch Program was $4,918,989. From FY 2013 to FY 2016, the Virgin Islands Inspector General conducted an audit report on the School Lunch Program.

Steven van Beverhoudt, CFE, CGFM Inspector General of the Virgin Islands Office of the Inspector General shared some of the challenges found upon completion of the audit report.

“We found that complete, accurate, and current records of receipt, distribution, and warehousing of inventory were not kept. Inventory records were modified or adjusted without proper written justification,” said Inspector General Beverhoudt. “Education officials were negligent in securing and accounting for inventory received, delivered, stored, and/or used at district warehouses and schools.”

“The audit highlighted several issues with the School Lunch Program. Thus far, what changes has VIDOE implemented?” asked Sen. Vialet. Commissioner McCollum said, “VIDOE has collaborated with the United States Department of Agriculture to train staff on recipe preparation, plate presentation, and customer service.”

In addition to the VIDOE, the Office of the Inspector General shared FY 2018 budget request. Inspector General Beverhoudt stated that the budget proposal for FY 2018 is $2,023,605. This is a reduction of $224,845 in comparison to the FY 2017 appropriated amount. The breakdown is as follows: $1,277,416 for personnel services, $461,237 for fringe benefits, $64,952 for supplies, $40,000 for utilities and $180,000 for other services.

Committee Members present are senators Kurt Vialet, Marvin Blyden, Neville James, Brian Smith, Nereida O’Reilly, Tregenza Roach and Dwayne DeGraff.  Also in attendance was non-committee member Sen. Janelle Sarauw.

The next Committee on Finance meeting will take place on Monday, August 21, 2017 at the Fritz E. Lawaetz Conference Room on St. Croix.

 

###

 

 

PUBLIC EMPLOYEES RELATIONS BOARD REQUESTS OVER A MILLION DOLLARS FOR FY 2018

Download PDF

St. Thomas – The Committee on Finance, chaired by Sen. Kurt Vialet, held a meeting at the Capitol Building on Thursday, to receive testimony on an overview of the Fiscal Year 2018 Budget from the Public Employees Relations Board (PERB).

For FY 2018, the governor’s recommended budget for PERB is $1,106,370. The budget breakdown is as follows: $654,000 for personnel services, $274,521 for fringe benefits, $16,800 for utilities, $10,000 partially covers supplies, $154,049 will partially assist with other services, charges, and professional services.

Zandra Peterson, Executive Director and Certified Officer of PERB stated that PERB needs an additional appropriation and allotment of $208,620. If approved, this will bring the FY 2018 budget request to $1,314,990. “The additional monies will assist the Board in continuing to serve the employees of the Government of the Virgin Islands while maintaining a positive relationship with our vendors,” added Director Peterson.

“We are in a new financial era. The budget that was sent down by the governor demonstrates prudence and it shows that we are going in the right direction fiscally. Realistically speaking, maintaining the solvency of the government without harming private entities is our paramount for FY 2018,” said Sen. Brian Smith.

According to the post audit report, the cost of Communication/Broadband has increased from $3,700 to $6,000 and the telephone services has increased from $9,000 to $15,000. Sen. Blyden asked, “Can you expound on that?” In response, Director Peterson stated that both services were expanded and the telephone system was upgraded.

Sen. DeGraff inquired, “How would you quantify savings for the government?” Director Peterson said, “Consolidating the work load amongst the staff, maintaining the same fees for car rental services for the past ten years, and board members conducting in-house hearings are some of our cost saving measures.”

Separately, Yarah Farrington, Administrative Assistant for the V.I. Labor of Management Committee (VILMC) stated that governor’s recommended budget for FY 2018 is $158,000. This is a decrease in comparison to the FY 2017 Budget of $175,000. The breakdown is as follows: $96,000 for personnel, $5,000 for supplies, $62,800 for other services and charges, and $16,200 for Health Insurance and fringe benefits.

Despite the governor’s recommendation, VILMC is requesting $22,000 more bringing their FY 2018 budget request to $180,000. Defending the proposed budget, Joseph Gumbs, Former Vice Chair of the Labor Management Committee stated that the additional funds will help VILMC to continue operating from October 1, 2017, to September 30, 2018.

Sen. Vialet said, “For FY 2018, we have to operate within the confines of what was recommended by the governor because of the fiscal condition of the Territory.” He added that one cost saving measure would be to utilize more office space on St. Croix because of the cost of rent on St. Thomas is much higher.

Sen. Blyden suggested that another way to reduce expenses is to combine government services.

He asked, “Is it possible to consolidate the services of PERB and VILMC?” Avery Lewis, Labor Co-Chair of the VILMC stated that the entities should not be combined because the services that PERB provides are much more expanded. “VILMC assists with the decision-making process with management, promotes and prepares rank and file employee involvement and address the employment environment,” said Lewis.

In addition to PERB and VILMC, The Office of Veterans Affairs also shared their budget request.

The FY 2018 budget request general fund appropriations are $790,344. The will cover approximately $346,344 for personnel salaries and fringe benefits, $27,000 for operating expenses, $300,000 to cover medical travel and death benefits and $117,000 of projected non-appropriated funds that will be from the Virgin Islands Lottery and Taxi-Cab Commission; according to Patrick Farrell, Director of the Virgin Islands Office of Veterans Affairs.

Committee members who are present: Kurt Vialet, Marvin Blyden, Nereida Rivera-O’Reilly, Brian Smith, Tregenza Roach, Dwayne DeGraff. Non-committee members present: Myron Jackson.

###

 

BUREAU OF ECONOMIC RESEARCH REQUESTS $662, 592 FOR FY 2018

Download PDF

St. Thomas – The Committee on Finance, chaired by Sen. Kurt Vialet, held a meeting at the Capitol Building on Wednesday, to receive testimony on the Fiscal Year 2018 Budget overview from the Virgin Islands Bureau of Economic Research (BER).

The BER Fiscal Year 2018 budget request is $662,592. The budget breakdown is as follows: $512,592 for the General Fund and $150,000 from the Tourism Revolving Fund. The budget includes $302,000 for personal services, $113,092 for fringe benefits, $14,200 for supplies, $44,000 for utilities, and $39,300 for other services; stated Bernadette Melendez, Director of BER.

“Is the Department of Tourism paid out of the $150,000 for the Tourism Evolving Fund?” asked Sen. Dwayne DeGraff? Director Melendez stated that she is not sure.

According to Sen. Vialet, the allotment would be coming out of the Tourism Evolving Fund and not out of the General Fund.

Sen. Janette Millin Young inquired, “Why is BER dipping into the $150,000 from the Tourism Revolving Fund.” In response, Director Melendez stated that the line item for BER is down to $15,000. The monies cover any economic related studies that are requested.

Separately, BER was awarded $250,000 Technical Assistance Grant on July 11, 2017. The primary purpose of the grant is to develop and implement the 2017 Consumer Price Index (CPI) based on the new 2016 Household Income Expenditure Survey, according to Director Melendez.

“How will the grant award assist BER with its duties for FY 2018?” asked Sen. Marvin Blyden. Director Melendez said, “CPI is an important economic indicator that captures price trends in new sectors, such as technology and broadband services. CPI also provides current data on expenditures of consumers in the Territory.” She added that currently, BER receives secondary data that is voluntarily submitted by the government and private sector.

Sen. Blyden asked, “Do BER meet with government agencies and the private sector to ensure the data submitted is accurate?” Director Melendez stated that the staff verifies the accuracy of the data during meetings held with various entities.”

“How do you get data from St. Croix, if all of your five of your staff members are in St. Thomas?” inquired Sen. Vialet. Director Melendez stated that BER has ways to collect data without physically being on St. Croix. The data reports are voluntarily submitted from the various private and government sectors.

However, the accuracy of the data collected was still questionable.

“I don’t know if the data is really accurate. The problem is that we continue to see numbers that are submitted voluntarily. At some point, data reports should be mandatory. The challenge is that there needs to be a process that synchronizes the data from all agencies,” said Sen. Vialet.

In a line of questioning, Sen. Janelle Sarauw inquired about the status of the economy and what are the contributing factors in the condition of the economy. In response, Director Melendez said, “The economy is growing. Construction, manufacturing and tourism are the main sources contributing to the growth of the economy.”

Separately, Office of the Governor, the Virgin Islands Fire Service and the Division of Personnel also shared their FY 2018 Budget requests.

Rochelle Benjamin, Director of the Business and Administration for the Office of the Governor stated that the budget request is for $9,203,565. The budget breakdown is as follows: General Fund is $8,690,973, BER is $512,592 and the Tourism Revolving Fund is $150,000.

Clifford Joseph, Director of the Virgin Islands Fire Service stated that the FY 2018 Budget request is $18,816,221. “Approximately 96% of these funds will be allocated to personnel costs. The remainder will be allocated to mandatory costs such as rent, travel, communications, and utilities,” added Director Joseph.

Milton Potter, Director of the Division of Personnel for the Government of the Virgin Islands stated that the FY 2018 Budget request is $3,230,927. This is a 6.8% decrease in comparison to the FY 2017 Budget of $4,145,535. The monies for the FY 2018 prime accounts $3,230,927 for the General Fund and $632,091 for the Indirect Cost Fund.

Committee members who are present: Kurt Vialet, Marvin Blyden, Neville James, Nereida Rivera-O’Reilly, Brian Smith, Tregenza Roach, Dwayne DeGraff. Non-committee members present Janelle Sarauw, Tregenza Roach, Jean Forde, Janette Millin Young, Myron Jackson and Novelle Francis.

The next Committee on Finance meeting as it pertains to the FY 2018 Budget, will take place on Wednesday, August 2nd at the Frits E. Lawaetz Legislative Conference Room on St. Croix.

###