Getting more done with fewer resources was the theme Thursday as the Senate Finance Committee received budget presentations from the inspector general’s office, the Department of Finance and the Public Finance Authority.
The committee also learned Thursday that a ferry boat being offered by an Alaskan town would not be appropriate for the Virgin Islands.
Commissioner Angel Dawson Jr. said that the first budget he presented to the Senate for the 2010 Fiscal Year called for a $7.6 million appropriation from the General Fund, and the funds included salaries for 112 employees. In the four years since then, the proposed appropriation has shrunk by more than one-third, to about $4.8 million, and the department now has less than half the number of employees, only 53, he said.
Yet despite the funding challenges and staffing shortages, Dawson said, “as indicated by our key performance indicators, the Department of Finance continues to fulfill its mission of providing efficient government financial service.”
At the same time, the straitened conditions are severely testing the remaining staff, Dawson said. Without new computer systems and streamlined processes, "We wouldn’t have a prayer of a chance" of getting the job done.
The department’s proposed FY14 budget includes $650,372 in funding from the Government Insurance Fund and $307,380 from the Indirect Cost Fund, for a total appropriation of $6,002,280.
At the beginning of the meeting, Inspector General Steven van Beverhoudt began the presentation of his budget with a quote from the Washington Post: "Inspector generals as a breed are about as welcome as the IRS guy at tax time. If they want to do something more socially acceptable they should do something like be an executioner."
For 25 years van Beverhoudt has headed the office charged with auditing government departments and agencies and ferreting out corruption and other wrongdoing. The agency has 11 employees and recently lost one of its two inspectors, the one assigned to St. Croix.
The office’s proposed budget calls for spending $1.4 million, an increase of about 8 percent over the current budget. The proposed increase consists of the requested authorization for three new auditor positions and one investigator position.
Van Beverhoudt pointed out the U.S. Department of the Interior will be closing its Virgin Islands inspector general’s office in September, leaving his office the only auditing agency in the territory.
The inspector general’s office is part of the executive branch, but van Beverhoudt has long maintained that the office should be independent. That would remove even the appearance of a conflict as his employees audit department’s that are part of the branch for which they work. That’s how it’s set up in the American territory of Guam, he said, written in their Organic Act.
Dawson, who is also executive director of the Public Finance Authority, gave the committee an overview of the Virgin Islands’ public debt and the authority’s operations in the current fiscal year, but he did not present a proposed budget. The PFA is an autonomous public corporation that aids the Virgin Islands government in meeting its fiscal obligations and raising capital for essential public projects, but its operation is not funded through the General Fund.
The budget the PFA board will put forward in August will fund the business of the authority, Dawson said, such as office expenses, transportation, payroll, property and casualty insurance.
The PFA budget is appropriated through contributions from the Internal Revenue Matching fund and from the Authority’s Project/Administration fund, comprised solely of fees collected upon the closing of bond financings.
In answer to a question from Sen. Clifford Graham, Dawson said two of the board positions, representing the private sector, have been vacant "for years," and he did not know when anyone might be appointed. The difficulty lies in finding people with the requisite skills and knowledge who are willing to go through the political vetting process, he said.
The PFA facilitates the government’s issuance of municipal securities – general obligation bonds and revenue bonds.
Currently the government’s general obligation debt stands at $782.5 million, which includes a Water and Power Authority guaranty loan of $10.3 million.
The government pays out $152.5 million annually on its bonds – $97.3 million on Diageo and Cruzan Matching Fund Revenue Bonds and $52.2 million on Gross Receipts Tax Bonds and other loans.
During the discussion of public works projects, which are largely funded through PFA bond revenues, he was asked by Senate President Shawn-Michael Malone about progress on the Alaskan ferry.
In March, Malone had heard about a state-of-the-art, $78 million passenger and car ferry built as a military prototype that an Alaska village was offering free to a qualifying public entity in the United States. He asked Smalls to look into whether the territory could acquire the 100-passenger, 20-car vessel for the St. Croix-St. Thomas ferry route.
Smalls said he had looked into it and learned enough to make him feel the ferry wasn’t a good fit for the territory.
First, he stipulated, it’s not really free because it needs work. There is a long list of tasks it needs to be finished, Smalls said.
More importantly, the ferry was designed and built for the frigid north Pacific, not the warm tropics. The bow is armored with steel sheets to enable it to break ice. That renders the ferry both slow and extremely inefficient, he said.
According to Smalls, the ferry burns fuel at a rate of 375 gallons an hour, compared to about 50 gallons an hour being normal for the territory’s ferries.
Further, Smalls said, the Alaskan ferry’s automotive lift would require modifying local docking facilities.
"I would not recommend that vessel for the territory," he said.
Instead the department is pursuing a new ferry specifically for carrying passengers and vehicles between St. Thomas and St. Croix.