Government
Dispute Escalates as WMA’s Appeal for Reduced Assessment Rejected by PSC
The recent meeting of the Public Services Commission (PSC) marked a pivotal moment in the ongoing dispute between the PSC and the Waste Management Authority (WMA), potentially paving the way for a legal showdown. The WMA’s request to re-evaluate its substantial annual assessment was firmly rejected, highlighting a critical disagreement over financial assessments and obligations.
Florence Kahugu, the WMA’s lead legal advisor, challenged the PSC’s assessment methodology, arguing for a significant reduction in the annual fee. According to Kahugu, funds received from the central government, designated for specific uses, were improperly included in the WMA’s operational revenue calculation, suggesting the assessment should be adjusted from the initial figure of over $400,000 to a mere $14,000.
Darryl Griffith, the WMA’s finance chief, contested the PSC’s revenue calculations for 2022, pointing out a stark contrast between the PSC’s $53.7 million figure and the $1.3 million reported by their auditors. Griffith emphasized that government appropriations, although utilized for operational expenses, do not constitute operating revenue, which he defined as earnings from the entity’s primary activities.
This contention over the definition of “gross operating revenue” became the crux of the disagreement. Despite pushback from the PSC, Griffith and Kahugu stood firm on their interpretation, backed by the consistent clearance of WMA’s financial audits by Bert Smith & Co, a reputable auditing firm also engaged by the Government of the Virgin Islands.
Highlighting the WMA’s reliance on government funding, Louis Sylvester, the deputy executive director, disclosed that 95% of the agency’s income stems from legislative appropriations. He pointed out the absence of charges for waste disposal services to the government, a practice underpinned by the WMA’s semi-autonomous status and the legislative support it enjoys. Sylvester recounted a failed attempt to introduce a charge for waste disposal, which was met with strong opposition from the community, leading to its withdrawal and the continuation of government subsidies.
The PSC, however, maintained its stance, referencing the agency’s acceptance of assessments from 2007 to 2021 without contention and highlighting the lack of initiative from the WMA to achieve financial independence. The PSC’s recommendation to deny the WMA’s petition for reassessment and to proceed with a comprehensive rate investigation reflects the commission’s position on the matter.
Kahugu signaled the WMA’s intention to challenge the decision in the Superior Court if their petition was denied, a move that would require the WMA to cover all legal expenses, including those incurred by the PSC.
In a unanimous decision, the commissioners denied the WMA’s appeal and initiated plans for an in-depth investigation into the agency’s financial operations, setting the stage for further developments in this contentious issue.
Government
Medicaid Funds Depleted, Major Road Repairs Planned: Bryan Provides Wide-Ranging Update
Governor Albert Bryan Jr. addressed several critical issues during Monday’s press briefing, focusing on infrastructure, housing, community welfare, and healthcare in the Virgin Islands.
Road Conditions and Repairs
Governor Bryan discussed the impact of recent weather on road conditions, particularly on St. Croix. “The rain, we’re grateful for it but it wreaks havoc on the roads,” he said. The wet weather has also accelerated vegetation growth, complicating roadside maintenance efforts. Additionally, some road projects have been delayed due to ongoing underground utility work. The North Shore Road will undergo significant work to install underground electrical and water services, while Mahogany Road and the main roadways in Frederiksted – Queen and King streets – are slated for extensive resurfacing. “We should be starting within the next 90 days or so to do that,” Bryan estimated.
Housing and Legislation
The governor emphasized the need for affordable housing and the aesthetic improvement of downtown areas, highlighting legislation on abandoned and derelict buildings. “We need to move this along and increase our affordable housing in our downtown spaces,” he stated. Bryan also addressed proposed sentencing reforms to give judges more discretion based on crime severity, saying, “We want to make sure that we have the appropriate amount of punishment for the crimes.”
Additionally, bills regarding gender changes on official documents, procurement requirements, and the combination of workers’ compensation with unemployment insurance are under legislative consideration.
Healthcare Funding and Medicaid
Healthcare funding was a key topic, with Bryan disclosing a recent bill requesting $3 million for Medicaid matching funds. “We ran out of Medicaid match money,” he said, noting the expansion of services during the Covid-19 pandemic led to increased demand and the subsequent depletion of funds. He emphasized the importance of maintaining access to affordable healthcare, highlighting the recent health fair that serviced over 2,400 residents.
Labor Shortage and Immigration
Addressing the territory’s chronic labor shortage, Bryan noted political challenges around immigration and visa waivers. He mentioned efforts to create work visa nexuses with the Dominican Republic and referenced an agreement allowing Trinidadian investors to settle in Miami as a potential model. He expressed confidence in meeting labor demands for upcoming projects under the Rebuild USVI initiative, stating that the four qualified bidders are already preparing to bring in workers.
Governor Bryan’s briefing provided a comprehensive overview of the challenges and initiatives aimed at improving the Virgin Islands’ infrastructure, housing, healthcare, and labor markets.
Government
Governor Bryan Urges Immediate Ceasefire in Gaza Strip; Proclaims USVI-Palestine Friendship Day
Governor Albert Bryan Jr. joined a global chorus calling for an immediate ceasefire in the Gaza Strip during Monday’s Government House press briefing.
The governor took this occasion to introduce Siri Hamad, a new public liaison for the Middle Eastern community. Hamad, a former member of the Public Services Commission, has collaborated with nearly every governor over the years, according to Governor Bryan.
Governor Bryan highlighted the significant contributions of the Palestinian community to the Virgin Islands’ development. “We are on the fourth generation of Palestinian descendants,” he said. “They are a critical cog in our business sector and part of the fabric of our community.”
Reflecting on the history of Palestinian entrepreneurs in the Virgin Islands, Bryan reminisced about the iconic traveling salesmen, who were pioneers in extending credit to their customers long before credit cards or bureaus existed. These businessmen were instrumental in shaping the local economy. Today, their descendants are recognized as Virgin Islanders of Palestinian descent, fully integrated into the community.
In a gesture of solidarity, Governor Bryan announced that November 29, recognized globally as the International Day of Solidarity with the Palestinian People, will also be celebrated as Palestinian Virgin Islands Friendship Day in the U.S. Virgin Islands.
Governor Bryan emphasized the universal desire for peace amidst global turmoil, stating, “As individuals, regardless of our skin color, origin, or religions, we should all want peace in this very tumultuous world.”
Government
USVI’s New Budget Strategy Aims to Address Revenue Shortfalls
The FY 2025 budget cycle commenced on Thursday as Senator Donna Frett-Gregory convened a hearing of the Senate Committee on Budget, Appropriations and Finance. Officials from the Office of Management and Budget presented an overview of the proposed executive budget for the upcoming fiscal year, themed “Fulfilling the Promise of Fiscal Solvency.” The proposed $1.44 billion budget includes a general fund allocation of nearly $897 million.
“Within the proposed general fund fiscal year 2025 budget of $896,803,010, you will find a continuation of the prudent and conservative approach we have employed since 2019,” stated OMB Director Jenifer O’Neal. This figure represents a $77 million decrease from the current general fund appropriation, resulting from the elimination of several one-time obligations and a reduction in the wage adjustment line item, O’Neal informed lawmakers.
The total budget of $1.44 billion also includes appropriated funds of $97,949,177, federal funds of $416,839,994, and other “non-appropriated funds” totaling $28,970,041.
According to O’Neal, the OMB has adopted a “cautious strategy” to produce a balanced budget that aligns with the estimated revenues for FY2025, aiming to ensure financial stability and resilience amid potential uncertainties. “Our commitment to conservative budgeting reflects our dedication to enhancing financial management and sustainable growth for the territory,” she said.
Despite current revenue shortfalls as of the third quarter of FY2024, the OMB’s projections anticipate growth in several categories. Personal income tax is expected to increase by 9% to $502.3 million, while corporate income is projected to rise by 23%. “With the launching of billion-dollar bid packages and the expected increase in construction activity, we project a significant increase of $19 million,” O’Neal explained.
Gross receipts are also expected to increase by 9% to $214 million, largely due to increased project bundles and construction activity. Excise taxes are projected to rise by 6%, from $42 million to $44.3 million. Notable revenue increases are also projected for hotel taxes.
The digital budget book indicates that the bulk of the FY2025 budget—$728,297,626—will be allocated to the general government. Public housing and welfare will receive $274,372,090, and education expenses are slated to receive $215,026,922. Health and Human Services will be allocated $65,010,796.
In her testimony, O’Neal highlighted several proposals from the FY2025 budget, including additional funds for the territory’s hospitals and the V.I. Waste Management Authority. These increased appropriations will ensure that “vital utilities are adequately budgeted for and can continue to meet the needs of our residents without falling behind again on their utility bills,” she said.
The $5 million budgeted for territory-wide road repairs underscores the commitment to enhancing transportation infrastructure and promoting economic development. An additional $5 million will be allocated to the Budget Stabilization Fund to maintain a prudent fiscal reserve, ensuring stability amid unforeseen challenges. New in the upcoming budget is extra funding for the Department of Sports, Parks, and Recreation for the operation of the recently recommissioned Clinton E. Phipps Racetrack.
Responding to Senator Novelle Francis, O’Neal announced that approximately $400,000 is allocated for the racetrack. “It’s been out of commission for quite a long time and had never been included in Sports and Parks budget,” she explained. The funds will cover utilities and personnel until a promoter takes over the management of the track.
For the Office of Management and Budget, the new budget represents a milestone in their commitment to transparency, accountability, and the prosperity of the territory.
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