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.