Aug. 20, 2008 — A funding bill the governor sent down two months ago is meant to carry various recipients through the end of the fiscal year, but senators said Wednesday they will have the final say in prioritizing the bill's $23.3 million in new expenditures.
The bill to fund various departments, agencies and organizations draws from appropriations approved by the Legislature as far back as 2001. In most cases, only a portion of funding was allotted, leaving the undistributed money available until expended, according to Debra Gottlieb, director of the Office of Management and Budget.
The authorization needed to use the remaining funds will be shifted from the previous years' appropriations to any new expenditures included in the bill, she explained during Wednesday's Committee of the Whole hearing.
Though the government is currently experiencing a cash-flow shortfall of about $30 million for FY 2008, money needed to cover the bill's expenditures would come from the General Fund. Though the government plans to issue FY 2006 property-tax bills next week, only $38 million in collections are expected to come in before the end of September, Gottlieb said.
Several senators said they were opposed to the process of "robbing Peter to pay Paul," but Gottlieb said she would still have to take money from other parts of the budget to cover the expenses, which includes, among other things, $13.7 million for the V.I. Water and Power Authority.
About $8.7 million of that amount would cover a portion of the government's unpaid utility bills — particularly outstanding amounts owed by the territory's two hospitals and the Waste Management Authority. Another $5 million will be used to increase the budgets of various government departments and agencies in an attempt to keep them up to date with their FY 2008 electricity costs. Another section of the bill increases by two percent the amount of property taxes deposited by the Finance Department into the District Street Lighting Fund.
"Given its current cash-flow crisis, the authority welcomes any and all assistance that will help to alleviate its cash position," said Nellon Bowry, WAPA's chief financial officer.
As of Wednesday, the authority owed Hovensa $25.1 million, but another $11.8 million is due next week, Bowry said. According to a recent mandate from Hovensa, WAPA is required to pay its fuel deliveries two days in advance, and will continue to accrue interest on its past-due invoices.
But the bill's figures took into account information provided by the authority last December, Gottlieb said. Since then, the government's outstanding receivables and poor financial condition has worsened, making it necessary for OMB to sit down with authority officials to determine exactly where the money should go, she said.
Discussion about WAPA's financial needs took up most of Wednesday's hearing, with senators saying the authority's inability to collect its outstanding receiveables — coupled with the failure of the Public Services Commission to keep Levelized Energy Adjustment Clause (LEAC) rates at pace with the rising cost of fuel — has continued to prevent WAPA from rebounding from near insolvency.
Much like other hearings held over the past couple of months, senators suggested that WAPA shut off power to delinquent government departments, and that the executive branch sit down and renegotiate its contract with Hovensa. Instead of shifting money that has gone unused by various community organizations, the government should also capitalize on about $100 million in Public Finance Authority bond proceeds that are currently languishing in the bank, they said.
While senators didn't dispute that the appropriations to the WAPA were "critical needs," they did question some of the bill's other appropriations — including $2.6 million to the Bureau of Information Technology to fund the territory's new E-911 system. Over the past three years, the Legislature has been handing out money for the project, but so far nothing has been done, and some of the equipment has "remained in the bush," Senate President Usie R. Richards said Wednesday.
The system is being built in three parts, and is designed to improve communication between local emergency-response agencies, BIT Director John George explained.
"It will save lives and make the territory a safer place to work and live," he said.
Senators will consider acting on most of the appropriations during a session slated for Friday. It was made clear, however, that the bill would not appear as the governor initially submitted it — especially since many of the appropriations have already been proposed by various senators and are currently in the process of being drafted into bills, Richards said earlier in the hearing. Meanwhile, the cost of living has continued to rise since the bill was first sent down, and there might be other pressing needs to take care of in the community, other senators said.
"I think sometime on Friday we would find some amiable way of addressing the needs of the executive branch and weighing them against the interests of this body," Richards said later.
Also included in the bill are appropriations of:
— $901,707 for the territory's third-party fiduciary;
— $1.6 million to Public Works for road striping and associated equipment and manpower costs;
— $1 million to the Justice Department to cover the first installment of a settlement between the government and H&O Food Warehouse;
— $275,000 to the Justice Department to cover off-island housing costs for five mentally ill inmates;
— $200,000 to the Justice Department to replace the air-handling system at the Alexander A. Farrelly Criminal Justice Complex;
— $800,000 for the Health Department to buy an ambulance boat for St. John;
— $500,000 to the Tourism Department to pay for an increase in the promotional contract the government has with Cruzan VIRIL;
— $273,000 to the Finance Department to cover the cost of putting out the government's 2005 single and financial audit;
— $250,000 to the Bureau of Economic Research to conduct studies on health issues and private-sector health insurance;
— $199,902 as an increase to the Department of Planning and Natural Resources' FY 2008 budget allotment;
— $150,000 to DPNR to fund renovations and upgrades to the LaReine Fish Market;
— $183,668 extra to DPNR to fund costs associated with the operation of the territory's Community Development Block Grant program, which was transferred in March to the V.I. Housing Finance Authority;
— $150,000 for the Boys and Girls Club of the Virgin Islands;
— $150,000 to Catholic Charities of the Virgin Islands;
— $150,000 from the Union Arbitration Fund to the Office of Collective Bargaining to cover bargaining and negotiations expenses;
— $115,580 to the University of the Virgin Islands Eastern Caribbean Center to conduct the V.I. community survey and have the data processed and tabulated;
— $93,243 to cover pay increases for employees at the Board of Nurse Licensure; and
— $598,915 extra to Housing, Parks and Recreation to cover costs associated with the department's housing programs, which were transferred in March to the V.I. Housing Finance Authority.
Present during Wednesday's hearing were Sens. Liston Davis, Carlton "Ital" Dowe, Juan Figueroa-Serville, Louis P. Hill, Neville James, Norman Jn Baptiste, Shawn-Michael Malone, Basil Ottley Jr., Richards, Ronald E. Russell, James Weber III, Celestino A. White Sr. and Alvin L. Williams.
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