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Charlotte Amalie
Wednesday, August 17, 2022
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Revenues Up at Property and Procurement

Times may be tight and budgets shrinking, but the Department of Property and Procurement is seeing big increases in revenues from its rental and sales operations, according to testimony from Commissioner Lynn Millin-Maduro during Senate budget hearings on Wednesday.

So far in Fiscal Year 2013, the department has collected $7.5 million in revenues from the funds it manages, which include the Central Motor Pool fund, government gasoline coupon program, government printing fund and the Abandoned Vehicle Program, Millin-Maduro told the Finance Committee.

This is a 16 percent increase in revenues over the same period in FY12, she said.

Year-to-date sales at the central government stores are at $851,000, an increase of 21 percent from the same period last year. Fiscal Year 2012 ended with $1.1 million in sales.

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“Regrettably the allotment for Business and Commercial Fund has been cut by 5 percent, which is of concern since the fund is a revolving fund and the department continues to meet its targeted collection goals every year,” Millin-Maduro said.

Rental and sales incomes to its Business and Commercial Account have yielded $2.4 million this year so far, a massive 41 percent increase over the same time last year. Selling four government properties for $296,000 raised that number, Millin-Maduro said.

The department expects to collect $2.8 million for the entire fiscal year, and a higher amount next year, with eight new lease agreements expected and four leases currently moving through the approval process, she said. The department is also pursuing evictions on 10 accounts based on failure to pay rent, failure to negotiate a new lease agreement, and improper or unauthorized use of the government’s property.

Property and Procurement manages 129 property leases – 59 on St. Croix, four on St. John, 65 on St. Thomas, and one off-island lease. These properties have a combined square footage of 30,280,331, and they cost the government $8.4 million to rent this year – 7 percent less in commercial space rental costs than the government spent in the previous year, when Property and Procurement managed 149 space management leases.

Finance Committee Chairman Clifford Graham said he had noticed many departments have private vans they own but do not use most of the day. He asked, "Would it be more efficient to operate more like a rental agency or a motor pool, have departments request one for use then sending them out?"

Millin-Maduro said the department does provide that sort of service to some degree now, "but we don’t charge." Most of the vans belong to Human Services and are related to specific federally funded programs so cannot be shuffled around, she said.

The Property and Procurement commissioner presented the department’s FY14 budget request of $6.3 million, of which $3.9 million is from the General Fund; $1.96 million from the revolving Business and Commercial Fund of the department’s own internal revenues; and $392,000 from the Indirect Cost Fund, which is paid by the federal government for local government costs of federal programs.

This year’s request is roughly 4 percent less than the 2013 appropriation, with a 5 percent drop in the General Fund allotment that has resulted in the department shifting some employee salaries from the General Fund to the Indirect Cost Fund and Business and Commercial Fund, Millin-Maduro said.

“While the decrease is minimal, it is not anticipated to have an adverse impact to the services that the department provides to other departments, agencies or the public as we continue to perform our duties timely and efficiently,” Millin-Maduro said.

Sen. Clarence Payne asked how well the department was absorbing its budget cuts and if it was fully staffed.

The department has enough staff to get by right now, Millin-Maduro said to Payne, adding that she thinks “if we have a further reduction we will be understaffed.”

Personnel wages and salaries comprise $3.4 million of the total appropriation, with employer Medicare, Social Security and pension contributions adding another $1.4 million. Some $530,000 is allocated to utilities.

The department is also slated to receive $7.8 million from the miscellaneous section of the budget, of which $7.6 million is for property insurance on all the government properties it manages.

No votes were taken at the information gathering hearing.

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Times may be tight and budgets shrinking, but the Department of Property and Procurement is seeing big increases in revenues from its rental and sales operations, according to testimony from Commissioner Lynn Millin-Maduro during Senate budget hearings on Wednesday.

So far in Fiscal Year 2013, the department has collected $7.5 million in revenues from the funds it manages, which include the Central Motor Pool fund, government gasoline coupon program, government printing fund and the Abandoned Vehicle Program, Millin-Maduro told the Finance Committee.

This is a 16 percent increase in revenues over the same period in FY12, she said.

Year-to-date sales at the central government stores are at $851,000, an increase of 21 percent from the same period last year. Fiscal Year 2012 ended with $1.1 million in sales.

“Regrettably the allotment for Business and Commercial Fund has been cut by 5 percent, which is of concern since the fund is a revolving fund and the department continues to meet its targeted collection goals every year,” Millin-Maduro said.

Rental and sales incomes to its Business and Commercial Account have yielded $2.4 million this year so far, a massive 41 percent increase over the same time last year. Selling four government properties for $296,000 raised that number, Millin-Maduro said.

The department expects to collect $2.8 million for the entire fiscal year, and a higher amount next year, with eight new lease agreements expected and four leases currently moving through the approval process, she said. The department is also pursuing evictions on 10 accounts based on failure to pay rent, failure to negotiate a new lease agreement, and improper or unauthorized use of the government’s property.

Property and Procurement manages 129 property leases – 59 on St. Croix, four on St. John, 65 on St. Thomas, and one off-island lease. These properties have a combined square footage of 30,280,331, and they cost the government $8.4 million to rent this year – 7 percent less in commercial space rental costs than the government spent in the previous year, when Property and Procurement managed 149 space management leases.

Finance Committee Chairman Clifford Graham said he had noticed many departments have private vans they own but do not use most of the day. He asked, "Would it be more efficient to operate more like a rental agency or a motor pool, have departments request one for use then sending them out?"

Millin-Maduro said the department does provide that sort of service to some degree now, "but we don't charge." Most of the vans belong to Human Services and are related to specific federally funded programs so cannot be shuffled around, she said.

The Property and Procurement commissioner presented the department’s FY14 budget request of $6.3 million, of which $3.9 million is from the General Fund; $1.96 million from the revolving Business and Commercial Fund of the department's own internal revenues; and $392,000 from the Indirect Cost Fund, which is paid by the federal government for local government costs of federal programs.

This year's request is roughly 4 percent less than the 2013 appropriation, with a 5 percent drop in the General Fund allotment that has resulted in the department shifting some employee salaries from the General Fund to the Indirect Cost Fund and Business and Commercial Fund, Millin-Maduro said.

“While the decrease is minimal, it is not anticipated to have an adverse impact to the services that the department provides to other departments, agencies or the public as we continue to perform our duties timely and efficiently,” Millin-Maduro said.

Sen. Clarence Payne asked how well the department was absorbing its budget cuts and if it was fully staffed.

The department has enough staff to get by right now, Millin-Maduro said to Payne, adding that she thinks “if we have a further reduction we will be understaffed.”

Personnel wages and salaries comprise $3.4 million of the total appropriation, with employer Medicare, Social Security and pension contributions adding another $1.4 million. Some $530,000 is allocated to utilities.

The department is also slated to receive $7.8 million from the miscellaneous section of the budget, of which $7.6 million is for property insurance on all the government properties it manages.

No votes were taken at the information gathering hearing.