July 31, 2002 – Just how effective a combined effort of the government and the private sector can be in pursuing the tourism dollar was brought home to local hoteliers and public officials Wednesday by an expert from one of their nearest neighbors and biggest competitors.
Several gubernatorial candidates and a scattering of senators joined executives of hotels large and small at a Wyndham Sugar Bay Resort luncheon on St. Thomas to hear what Jorge Pesquera, executive director of the Puerto Rico Convention Bureau, had to say.
Pesquera said revenues from group travel to Puerto Rico neared $40 million in the last year. The convention bureau receives 12 percent of hotel tax revenues, roughly $5 million a year. With 47 employees, Pesquera said, the organization is well on the way to making Puerto Rico the "preferred meeting destination of the Americas."
The bureau, a not-for-profit entity, focuses on marketing Puerto Rico as a meeting and convention destination. Pesquera, a 25-year veteran of the travel and tourism industry, serves as a director of the Puerto Rico Hotel and Tourism Association and of the International Association of Convention and Visitor Bureaus.
Leadership is the key to the bureau's success, Pesquera said. "You need good government structure. You need a balanced government structure — one that promotes consistency," he said. "Otherwise, you're going to lose market share to those out there who are doing it well."
Pesquera's presentation at the meeting, hosted by the St. Thomas-St. John Hotel and Tourism Association, lent credence to the lobbying efforts of local hoteliers. The Puerto Rico Convention Bureau has worked since 1962 to develop group travel as a major economic resource for the commonwealth. According to Pesquera, it has been very successful.
Listening intently as Pesquera described the bureau's accomplishments were many hoteliers who have long lobbied for a private-public tourism authority in the Virgin Islands. Legislation was prepared in late 1999 to create a Virgin Islands Tourism Authority made up of private sector representatives in the majority and government representatives in the minority.
The proposed tourism authority would have been empowered to disburse the territory's hotel tax revenues — then accounting for some $11 million a year — to promote the Virgin Islands as a visitor destination. Hotel tax revenues are by law exclusively for tourism advertising and promotion; however, the funds have consistently been raided to meet government obligations and pay for special-interest projects.
The Legislature passed a bill creating a tourism authority as part of the Fiscal Year 2001 Omnibus Act, but Gov. Charles W. Turnbull vetoed the measure in February of 2001 — while approving a 2 percent increase in the hotel tax. The Legislature later rescinded the tax increase.
Two months after vetoing the public-private authority, Turnbull in an executive order created a Tourism Advisory Council, a move soundly rejected by the private hospitality sector. He named as the four private sector members the executive directors of the territory's two hotel associations and chambers of commerce; the four bodies subsequently said their managers would not serve. The council's activities have not been made public.
According to Pesquera, the Puerto Rico government has "recognized the value of public-private non-profits." He said 80 per cent of the bureau's funding comes from the hotel room tax with the rest derived from member dues, cooperative marketing (as with airlines and hotels) and revenue from a contract with a convention center under development.
Public-sector support has enabled the Puerto Rico Convention Bureau to "impact the entire tourism industry," he said. The bureau's function, he said, is to serve as the center of the commonwealth's overall "destination team."
The bureau reaches potential travel groups through a combination of direct marketing, Internet presence, newsletters — to both members and customers — and sales offices in the mainland United States and Spain. Last year, Pesquera said, his agency worked with more than 700 groups traveling to Puerto Rico.
Asked by audience members what the territory would need to do to implement an agency on the same model as his bureau, Pesquera said it is simple: "You have to get the right people in place and move forward."

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Aug. 1, 2002 – The V.I. government's Fiscal Year 2002 revenues likely will fall $40 million to $50 million short of last year's projections, Ira Mills, director of the Office and Management, told the Senate Finance Committee on Wednesday.
Louis Willis, Internal Revenue Bureau director, added to the grim news at the FY 2003 budget hearing. He said he now anticipates an increase of 14 percent, or $2.3 million, in real property tax revenues for FY 2002, but a shortfall of 14 percent, or $3 million, in corporate taxes.
And Willis said he expects a reduction of 17 percent, or $2.5 million, in excise taxes; a drop of 4 percent, or $3 million, in gross receipts taxes; and a decrease of about 4 percent, or $500,000, in individual income tax revenues for 2002.
"The higher estimated level of revenues projected for this fiscal year may not yet be realized," Mills told the committee. He said the situation became apparent when he reviewed the April and May collections when the latter became available in June. "A different mix of the taxpayer base, review of the filings for April 15, coupled with the extensions filed, demand that we reassess collections which may come in August, or, worst case, October 2002," he said.
Uncertainty regarding the "due date" for payment of FY 2001 commercial property taxes further complicates the picture, Mills said. The closer to the end of the year that residential and commercial property taxes come due, he said, "the riskier will be the available resources to cover the projected obligations in this fiscal year."
He added, "The revised resource estimates for FY 2002 must now guide revised spending levels for the remainder of the fiscal year. A downward adjustment must now be prudently made. We have begun to assess the distribution of this across departments and agencies, and must do it for all branches as well."
As far as FY 2003, Mills said he is holding to his earlier projections. At the Finance Committee's opening budget hearing on June 11, he and other administration fiscal officials gave a generally optimistic picture of anticipated economic activity for the fiscal year to begin on Oct. 1. At that time, he projected General Fund revenues of $567.7 million for 2003, with 58 percent, or $329 million, coming from gross personal income taxes.
At the same June hearing, Tax Assessor Roy Martin estimated FY 2003 property taxes at $48.3 million plus another $14 million from Hovensa. And Finance Commissioner Bernice Turnbull said the government was owed more than $30 million in delinquent property taxes.
At that time, Mills cited capital improvement and tourism-related projects as the basis for the outlook: $35 million in private activity bonds the Public Finance Authority issued in May for the Seven Hills Beach Resort and Casino planned for Robin Bay on St. Croix; a $12 million Botany Bay development on St. Thomas; the rebuilding of the Yacht Haven Hotel; and two public projects — the Enighed Pond commercial port on St. John and the Red Hook marine terminal on St. Thomas. He also said PFA infrastructure changes would attract long-term investment in the territory.
On Wednesday, Mills also made a familiar plea to the Finance Committee chair, Sen. Alicia "Chucky" Hansen, for "even some form of modified line-item budget." Such pleas from the administration have fallen on deaf ears since last year, when the committee instituted line-item budgets specifying how much can be spent for what, rather than lump-sum budgets that would allow for discretionary expenditures within an agency's overall allocation. For FY 2003, the committee has made one exception, granting a lump-sum budget to the Office of the Inspector General.
Mills noted there are lump-sum amounts in each agency and department's personnel list covering the top managerial exempt salary adjustments.
One area where the financial picture looks rosy is cruise ship traffic, according to testimony presented by Edward E. Thomas St., chief executive of The West Indian Co.
Presenting an overview of the independent entity, which adopts its own budget, Thomas said he anticipates an "excellent" cruise ship season. He said 832 port calls are scheduled for FY 2003, bringing an estimated 1.9 million passengers. He said these passengers should spend about $1 billion, generating about $44 million in gross receipts taxes for the government.
With one exception, Wednesday's testimony concluded the committee's FY 2003 budget hearings. Hansen has yet to announce when the twice-postponed budget hearing for the Office of the Lieutenant Governor will be held. The committee is scheduled to meet on Aug. 7 to review and mark up the budgets that it will send to the governor.

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July 31, 2002 – The planned University of the Virgin Islands Research and Technology Park eventually will be self-supporting, but it will have to depend on the local government to fund operations in its early years, UVI President-elect Laverne Ragster told members of the Senate Finance Committee on Tuesday.
Ragster and President Orville Kean, who will retire in August, asked the senators to approve their requested $34.6 million budget for Fiscal Year 2003 along with an additional $1.5 million to fund start-up operations at the Research and Technology Park, to be developed on St. Croix.
In a prepared statement, Ragster said that the $1.5 million will go for seating and orienting the park's board and executive management; administrative operations and professional expenses; workforce training; development of matching funds; business recruitment; marketing and public relations; and facilities and infrastructure development planning. She also said the university is pursuing grants to support the park.
While the outlook for the park's implementation remains good, she said, there are concerns about acquiring the land needed. It is now owned by farmers who will have to be relocated. "We are going to need the help of the legislative and executive branches to overcome the legitimate concerns of the farmers," she said in the statement.
She said the park will benefit St. Croix's agribusiness community by opening world markets to local agricultural products through e-commerce.
Ragster said Gov. Charles W. Turnbull has appointed the three community members to the park board. They are Liston Abbott, Kathleen Dyer and Roger Dewey. And, she said, UVI is close to wrapping up a technology plan outlining telecommunications and related infrastructure needs for the park.
Ragster said there is a lot of enthusiasm for developing a technology community education center to provide training and develop programs of outreach to youths, schools and the business community. "One of the important goals of the center is to bring technology training within the reach of every Virgin Islander at little or no cost, so that no one will be locked out from training or job opportunities because of inability to pay," Ragster said.
Also appearing before the Finance Committee on Tuesday was the Government Employees Retirement System acting administrator and chief financial officer, Willis C. Todman.
He told the senators that GERS has reached the point where benefits paid out have exceeded contributions. He said that in Fiscal Year 2002, the system had to liquidate $30 million in assets to pay retirement benefits.
All committee members were present — Sen. Douglas Canton Jr., Donald "Ducks" Cole, Adlha "Foncie" Donastorg, Carlton Dowe, Alicia "Chucky" Hansen, Norman Jn Baptiste and Norma Pickard-Samuel. Non-committee member Sen. Celestino A. White Sr. also was present.

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July 31, 2002 – The lieutenant governor didn't appear on Wednesday at the Senate Finance Committee's hearing on the Fiscal Year 2003 budget for his office, and one of his officials who did appear had grim news.
It was Lt. Gov. Gerard Luz James II's second failure to show before the committee, and if Sen. Alicia "Chucky" Hansen, Finance chair, has her way, it will be the last.
James sent Charles Parrott, his chief of staff, as he had done on July 11, when the budget hearing for the office was originally scheduled. Hansen's response then was to postpone the hearing. On Wednesday, for the second time, Hansen said that Parrott's presence would not suffice.
"The lieutenant governor is also the commissioner of Insurance and chairman of the Banking Board, and as such he should appear before this body as the other commissioners do," Hansen said.
James had written to Hansen asking for an extension from July 11 to July 17, or "any date after the 15th," saying he said he would be unable to compile the necessary budget information before then because of hosting the annual meeting on June 25 to 30 of the National Conference of Lieutenant Governors on St. Croix.
On Tuesday, James wrote to Hansen saying Parrott would represent him on Wednesday. Hansen's response was: "We have many insurance problems in the territory, and we need to hear from the person in charge of policy. I will not accept the chief of staff."
She made it clear Wednesday that she considers the staff of the office — 10 of whom sat in the Senate chambers — competent. "But we need James," she said, noting that prior lieutenant governors have appeared at budget hearings. "Kenneth Mapp appeared, as did Derek Hodge and Julio Brady when they were lieutenant governor," she said.
Hansen said she needed to hear James's direct responses to questions. "He appears in press releases, or responds by cover of radio on the talk shows. We can't see what he is reading," she continued. "We have many insurance problems, with insurance companies being forced out of the territory … I don't want somebody else to sit here and read James's document."
Sen. Donald "Ducks" Cole asked where Maryleen Thomas, the director of banking and insurance under James, was. "With the insurance crisis looming over the territory, we have issues that need to be clarified, with ridiculous prices now for insurance," he commented.
Cole expressed surprise to find that Thomas was not there, either. No excuse was offered to Hansen for her absence.
One senator suggested she might be out campaigning. Thomas is James's running mate in his bid to replace his boss as governor in the November election.
Hansen said she will give James one more chance to appear voluntarily. It that doesn't work, she said, she will subpoena him. She said she would announce a time for the next hearing after discussing the matter with her Finance Committee colleagues on Wednesday evening.
Settlement means lower property tax revenues
Tax Assessor Roy Martin, whose office falls within that of the lieutenant governor, did testify Wednesday, saying his office is in "serious trouble." He said the recent settlement of a legal challenge filed by Berne Corp. and B&B Corp. and C & M Caron Building, Twenty-One Queen's Quarter Inc., has set precedent for other litigators to follow.
The suit, settled in December of 2000, was filed by Berne and B&B in August of that year, with Caron joining the case later. The suit charged that the government was assessing commercial properties on the basis of replacement value rather than actual value, that this had resulted in inflated assessments since 1994, and that the owners had effectively been denied a fair appeal hearing.
The parties agreed to having the District Court name an independent "special master" to review the procedures and process of commercial property assessment. (See "Berne tax assessment case settled".) Under the mandate, Martin said Wednesday, the special master must see that the office meets certain requirements before it can appraise commercial properties. "These mandates require funding," Martin said.
The terms of the settlement were "sealed" and have not been made public, he said.
He said two commercial property owners' cases have been settled at between $300,000 and $400,000, and another 10 cases are pending. Asked by Hansen if this was a government payout from his office, Martin said, "No, it would be a credit."
"That's still the same thing isn't it?" Hansen persisted. "It's money out of the government's pocket." To this Martin agreed.
He said there are about 1,500 commercial property owners in the territory. "Imagine crediting all of those," Hansen remarked.
Martin also said there are about 34,000 residential property taxpayers — some 20,000 on St. Thomas; 1,600 on St. John and 12,300 on St. Croix. He said there are "no residential cases yet" challenging the basis for those assessments.
Under questioning by Cole, Martin said the expected commercial property tax revenues under the old procedure would have been between $9 million and $10 million. Under the court order, he said, it could be $7 million.
In requesting that the committee approve the governor's recommended $727,472 for his office, Martin said since his office brings in about $70 million yearly that goes into the General Fund, "we should not have to beg for money in order to become compliant with the court decree."
The committee was scheduled to hear budget testimony from the Crucian Christmas Festival and updates from the St. Thomas marine industry and the St. Thomas Swimming Association Wednesday night.
Committee members attending Wednesday's daytime session were Sens. Cole, Carlton Dowe, Adlah "Foncie" Donastorg, Hansen and Norma Pickard-Samuel. Sens. Douglas Canton Jr. and Norman Jn Baptiste were absent. Non-committee member Celestino A. White Sr. also attended.

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July 31, 2002 – The V.I. government will enter into an agreement with the U.S. Department of Education committing to make needed improvements in education programs or face the prospect of losing multi-millions of dollars in annual federal funding.
The compliance agreement is expected to be finalized within the next two weeks, and it will go into effect immediately, acting Education Commissioner Noreen Michael said at a press conference Wednesday. Its purpose is to force local education officials to make improvements in fiscal management, hiring, procurement practices and documentation of how the federal funds are being used to benefit students.
If the department does not make the improvements, the territory could lose some or all of the $31 million it receives each year in federal education funding, Michael said.
"We'll have to correct fiscal and administrative difficulties that have hindered our education programs," she said. "The ultimate goal of this agreement is to improve the education system in the Virgin Islands."
The compliance agreement gives the territory three years to bring its administrative standards up to criteria outlined in federal law, said Jim Bradshaw, a spokesman for the U.S. Department of Education.
"This is a last resort," he said of the compliance agreement. It is rare that a state or territory has to come under such an agreement, he said, one other example being a District of Columbia compliance agreement for its special education programs.
"The territory has quite a bit of ground to cover to meet the requirements of the law," Bradshaw said.
The territory's public school students rank at or near the bottom of the nation on SAT's and other standardized tests of reading, math and science ability.
Last November, Central, Charlotte Amalie and Ivanna Eudora Kean High Schools lost their national accreditation because they had not shown improvements in basic areas such as teacher and student absenteeism and in efforts to increase onsite management of the schools. The fourth public high school, Educational Complex, has never been accredited.
Many of the complaints leading to the loss of accreditation were similar to those that have been raised by federal education officials: that they were not seeing improvements made, even long after problems had been brought to light.
Federal education officials have cited lack of audits, co-mingling of federal dollars with other education funds, and lack of progress reports on projects funded by federal funds. And they deem the territory a "high-risk grantee" for federal funding because of problems in fiscal management and a bureaucracy that slows everything from hiring new teachers to buying learning materials, Michael said.
Federal education officials will work with local administrators to help them comply with the terms of the agreement, Bradshaw said.
At the press conference, Michael also said:
– Summer school maintenance work is on schedule, and unless unforeseen circumstances come up, all of the schools are expected to be ready to open on Aug. 27, when students begin returning to classes.
– The Education Department is working to fill about 85 vacancies created by retirements and resignations. Recruiters have gone to mainland job fairs and have set up a jobs Web site and a toll-free telephone number for candidates to obtain information.
Needed are teachers of math, foreign languages, special education, music, art and other disciplines, Michael said. As an incentive, the department is offering recent University of the Virgin Islands graduates a $1,500 signing bonus and off-island candidates a one-way airline ticket and two months' rent, she said. It's also offering tuition reimbursement for teachers who need course credits to get their V.I. teaching certificate, she said.
– In September, the department with the Middle States Association of Colleges and Schools, the territory's accrediting body, will hold accreditation workshops for administrators and staff of the territory's high schools.
The workshops are to outline what needs to be done for the schools to begin trying to regain accreditation. Presenters will discuss the problems that led to the loss of accreditation and what needs to change, and then participants will learn about the self-study that each high school will need to undertake. The re-accreditation process involves outlining programs for improving schools and setting up schedules to see those improvements through, Middle States officials have said.
The territory is seeking accreditation for all four high schools, Michael said Wednesday.

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July 31, 2002 – The Water and Power Authority board voted at a special meeting on Wednesday to seek Public Services Commission approval of an increase in its base electric rate to customers that would yield a net gain of about 3.3 percent in revenues.
As another means of generating income, it plans to issue $50 million in bonds early next year, according to a WAPA release.
The request to the PSC will be for an increase of 11.4 percent in the base rate, but the net impact after a proposed reduction of the current Levelized Energy Adjustment Clause surcharge will be an increase of some 3.3 percent, the release stated.
The last general base-rate increase took effect in 1994, it said, and the last increase of any kind was an emergency rate hike in 1996 as a result of Hurricane Marilyn.
"Since that time, the authority's costs have outpaced the revenues from the rate structure," the release stated. And if the increase is not approved, it said, "the authority anticipates reducing staff and eliminating necessary projects for maintenance and upgrade."
Additional revenues are essential in order for WAPA to fund the territory's street lighting operations — transferred late last year to the authority from the Public Works Department — and capital projects, the release said.
"We have a duty to provide the service, but there must be sound funding to support the effort," Glenn Rothgeb, acting WAPA executive director, said. "The only reliable funding source is a customer surcharge."
Joseph R. Thomas Jr., who served as executive director for a year before being asked to resign in April, had been of the same opinion. He said looking to yearly legislative appropriations was too unreliable. WAPA established a separate company to handle the street lighting.
The Legislature appropriated $2.8 million for the lighting start-up costs but the executive branch has yet to release any of the money, WAPA officials have said.
Rothgeb said the capital projects are needed in order to "improve the reliability of power." Among the critical needs, he said, are extension of underground lines from Henry E. Rohlsen Airport to Frederiksted on St. Croix and from the Rehelio Hatchett Substation in Long Bay to the East End on St. Thomas, and the building of a substation on St. John.
At its July 19 meeting, the PSC voted to let WAPA's current asbestos abatement surcharge expire on Aug. 2. It extended the Hurricane Marilyn emergency mitigation and recovery surcharge, which also was scheduled to end on Aug. 2, until Sept. 30, with plans to address the matter again at the board's September meeting.
PSC members were not happy that Rothgeb waited until the 11th hour to seek an extension of the two expiring surcharges. But he said revenues from the two temporary surcharges are tied to the utility's bond holdings. Cutting off those sources of revenue, he said, would throw the authority into default on its bond retirement, and the result would be that "the bondholders will own WAPA."
Now, the release said, WAPA proposes "eliminating existing surcharges by rolling them into the base rate."
The utility still will press for a separate surcharge for street lighting, however. It already has a petition before the PSC seeking approval to assess residential electricity customers an average of about $1.50 a month to cover the costs of maintaining and improving the territory's street lighting system. The actual charge would be based on kilowatt usage, the release stated.
Carol Burke, WAPA board chair, said on Wednesday that no one has complained to her about a $1.50 charge for street lighting. "To the contrary, people say they want street lights, and a minimal surcharge … is more than worth it," she said.

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July 31, 2002 – Just how effective a combined effort of the government and the private sector can be in pursuing the tourism dollar was brought home to local hoteliers and public officials Wednesday by an expert from one of their nearest neighbors and biggest competitors.
Several gubernatorial candidates and a scattering of senators joined executives of hotels large and small at a Wyndham Sugar Bay Resort luncheon to hear what Jorge Pesquera, executive director of the Puerto Rico Convention Bureau, had to say.
Pesquera said revenues from group travel to Puerto Rico neared $40 million in the last year. The convention bureau receives 12 percent of hotel tax revenues, roughly $5 million a year. With 47 employees, Pesquera said, the organization is well on the way to making Puerto Rico the "preferred meeting destination of the Americas."
The bureau, a not-for-profit entity, focuses on marketing Puerto Rico as a meeting and convention destination. Pesquera, a 25-year veteran of the travel and tourism industry, serves as a director of the Puerto Rico Hotel and Tourism Association and of the International Association of Convention and Visitor Bureaus.
Leadership is the key to the bureau's success, Pesquera said. "You need good government structure. You need a balanced government structure — one that promotes consistency," he said. "Otherwise, you're going to lose market share to those out there who are doing it well."
Pesquera's presentation at the meeting, hosted by the St. Thomas-St. John Hotel and Tourism Association, lent credence to the lobbying efforts of local hoteliers. The Puerto Rico Convention Bureau has worked since 1962 to develop group travel as a major economic resource for the commonwealth. According to Pesquera, it has been very successful.
Listening intently as Pesquera described the bureau's accomplishments were many hoteliers who have long lobbied for a private-public tourism authority in the Virgin Islands. Legislation was prepared in late 1999 to create a Virgin Islands Tourism Authority made up of private sector representatives in the majority and government representatives in the minority.
The proposed tourism authority would have been empowered to disburse the territory's hotel tax revenues — then accounting for some $11 million a year — to promote the Virgin Islands as a visitor destination. Hotel tax revenues are by law exclusively for tourism advertising and promotion; however, the funds have consistently been raided to meet government obligations and pay for special-interest projects.
The Legislature passed a bill creating a tourism authority as part of the Fiscal Year 2001 Omnibus Act, but Gov. Charles W. Turnbull vetoed the measure in February of 2001 — while approving a 2 percent increase in the hotel tax. The Legislature later rescinded the tax increase.
Two months after vetoing the public-private authority, Turnbull in an executive order created a Tourism Advisory Council, a move soundly rejected by the private hospitality sector. He named as the four private sector members the executive directors of the territory's two hotel associations and chambers of commerce; the four bodies subsequently said their managers would not serve. The council's activities have not been made public.
According to Pesquera, the Puerto Rico government has "recognized the value of public-private non-profits." He said 80 per cent of the bureau's funding comes from the hotel room tax with the rest derived from member dues, cooperative marketing (as with airlines and hotels) and revenue from a contract with a convention center under development.
Public-sector support has enabled the Puerto Rico Convention Bureau to "impact the entire tourism industry," he said. The bureau's function, he said, is to serve as the center of the commonwealth's overall "destination team."
The bureau reaches potential travel groups through a combination of direct marketing, Internet presence, newsletters — to both members and customers — and sales offices in the mainland United States and Spain. Last year, Pesquera said, his agency worked with more than 700 groups traveling to Puerto Rico.
Asked by audience members what the territory would need to do to implement an agency on the same model as his bureau, Pesquera said it is simple: "You have to get the right people in place and move forward."

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July 31, 2002 – The lieutenant governor didn't appear on Wednesday at the Senate Finance Committee's hearing on the Fiscal Year 2003 budget for his office, and one of his officials who did appear had grim news.
It was Lt. Gov. Gerard Luz James II's second failure to show before the committee, and if Sen. Alicia "Chucky" Hansen, Finance chair, has her way, it will be the last.
James sent Charles Parrott, his chief of staff, as he had done on July 11, when the budget hearing for the office was originally scheduled. Hansen's response then was to postpone the hearing. On Wednesday, for the second time, Hansen said that Parrott's presence would not suffice.
"The lieutenant governor is also the commissioner of Insurance and chairman of the Banking Board, and as such he should appear before this body as the other commissioners do," Hansen said.
James had written to Hansen asking for an extension from July 11 to July 17, or "any date after the 15th," saying he said he would be unable to compile the necessary budget information before then because of hosting the annual meeting on June 25 to 30 of the National Conference of Lieutenant Governors on St. Croix.
On Tuesday, James wrote to Hansen saying Parrott would represent him on Wednesday. Hansen's response was: "We have many insurance problems in the territory, and we need to hear from the person in charge of policy. I will not accept the chief of staff."
She made it clear Wednesday that she considers the staff of the office — 10 of whom sat in the Senate chambers — competent. "But we need James," she said, noting that prior lieutenant governors have appeared at budget hearings. "Kenneth Mapp appeared, as did Derek Hodge and Julio Brady when they were lieutenant governor," she said.
Hansen said she needed to hear James's direct responses to questions. "He appears in press releases, or responds by cover of radio on the talk shows. We can't see what he is reading," she continued. "We have many insurance problems, with insurance companies being forced out of the territory … I don't want somebody else to sit here and read James's document."
Sen. Donald "Ducks" Cole asked where Maryleen Thomas, the director of banking and insurance under James, was. "With the insurance crisis looming over the territory, we have issues that need to be clarified, with ridiculous prices now for insurance," he commented.
Cole expressed surprise to find that Thomas was not there, either. No excuse was offered to Hansen for her absence.
One senator suggested she might be out campaigning. Thomas is James's running mate in his bid to replace his boss as governor in the November election.
Hansen said she will give James one more chance to appear voluntarily. It that doesn't work, she said, she will subpoena him. She said she would announce a time for the next hearing after discussing the matter with her Finance Committee colleagues on Wednesday evening.
Settlement means lower property tax revenues
Tax Assessor Roy Martin, whose office falls within that of the lieutenant governor, did testify Wednesday, saying his office is in "serious trouble." He said the recent settlement of a legal challenge filed by Berne Corp. and B&B Corp. and C & M Caron Building, Twenty-One Queen's Quarter Inc., has set precedent for other litigators to follow.
The suit, settled in December of 2000, was filed by Berne and B&B in August of that year, with Caron joining the case later. The suit charged that the government was assessing commercial properties on the basis of replacement value rather than actual value, that this had resulted in inflated assessments since 1994, and that the owners had effectively been denied a fair appeal hearing.
The parties agreed to having the District Court name an independent "special master" to review the procedures and process of commercial property assessment. (See "Berne tax assessment case settled".) Under the mandate, Martin said Wednesday, the special master must see that the office meets certain requirements before it can appraise commercial properties. "These mandates require funding," Martin said.
The terms of the settlement were "sealed" and have not been made public, he said.
He said two commercial property owners' cases have been settled at between $300,000 and $400,000, and another 10 cases are pending. Asked by Hansen if this was a government payout from his office, Martin said, "No, it would be a credit."
"That's still the same thing isn't it?" Hansen persisted. "It's money out of the government's pocket." To this Martin agreed.
He said there are about 1,500 commercial property owners in the territory. "Imagine crediting all of those," Hansen remarked.
Martin also said there are about 34,000 residential property taxpayers — some 20,000 on St. Thomas; 1,600 on St. John and 12,300 on St. Croix. He said there are "no residential cases yet" challenging the basis for those assessments.
Responding to questioning by Cole, Martin said the expected commercial property tax revenues under the old procedure would have been between $9 million and $10 million this year. Under the court order, he said, it could be $7 million.
In requesting that the committee approve the governor's recommended $727,472 for his office, Martin said since his office brings in about $70 million yearly that goes into the General Fund, "we should not have to beg for money in order to become compliant with the court decree."
The committee was scheduled to hear budget testimony from the Crucian Christmas Festival and updates from the St. Thomas marine industry and the St. Thomas Swimming Association Wednesday night.
Committee members attending Wednesday's daytime session were Sens. Cole, Carlton Dowe, Adlah "Foncie" Donastorg, Hansen and Norma Pickard-Samuel. Sens. Douglas Canton Jr. and Norman Jn Baptiste were absent. Non-committee member Celestino A. White Sr. also attended.

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July 31, 2002 – The V.I. government will enter into an agreement with the U.S. Department of Education committing to make needed improvements in education programs or face the prospect of losing multi-millions of dollars in annual federal funding.
The compliance agreement is expected to be finalized within the next two weeks, and it will go into effect immediately, acting Education Commissioner Noreen Michael said at a press conference Wednesday. Its purpose is to force local education officials to make improvements in fiscal management, hiring, procurement practices and documentation of how the federal funds are being used to benefit students.
If the department does not make the improvements, the territory could lose some or all of the $31 million it receives each year in federal education funding, Michael said.
"We'll have to correct fiscal and administrative difficulties that have hindered our education programs," she said. "The ultimate goal of this agreement is to improve the education system in the Virgin Islands."
The compliance agreement gives the territory three years to bring its administrative standards up to criteria outlined in federal law, said Jim Bradshaw, a spokesman for the U.S. Department of Education.
"This is a last resort," he said of the compliance agreement. It is rare that a state or territory has to come under such an agreement, he said, one other example being a District of Columbia compliance agreement for its special education programs.
"The territory has quite a bit of ground to cover to meet the requirements of the law," Bradshaw said.
The territory's public school students rank at or near the bottom of the nation on SAT's and other standardized tests of reading, math and science ability.
Last November, Central, Charlotte Amalie and Ivanna Eudora Kean High Schools lost their national accreditation because they had not shown improvements in basic areas such as teacher and student absenteeism and in efforts to increase onsite management of the schools. The fourth public high school, Educational Complex, has never been accredited.
Many of the complaints leading to the loss of accreditation were similar to those that have been raised by federal education officials: that they were not seeing improvements made, even long after problems had been brought to light.
Federal education officials have cited lack of audits, co-mingling of federal dollars with other education funds, and lack of progress reports on projects funded by federal funds. And they deem the territory a "high-risk grantee" for federal funding because of problems in fiscal management and a bureaucracy that slows everything from hiring new teachers to buying learning materials, Michael said.
Federal education officials will work with local administrators to help them comply with the terms of the agreement, Bradshaw said.
At the press conference, Michael also said:
– Summer school maintenance work is on schedule, and unless unforeseen circumstances come up, all of the schools are expected to be ready to open on Aug. 27, when students begin returning to classes.
– The Education Department is working to fill about 85 vacancies created by retirements and resignations. Recruiters have gone to mainland job fairs and have set up a jobs Web site and a toll-free telephone number for candidates to obtain information.
Needed are teachers of math, foreign languages, special education, music, art and other disciplines, Michael said. As an incentive, the department is offering recent University of the Virgin Islands graduates a $1,500 signing bonus and off-island candidates a one-way airline ticket and two months' rent, she said. It's also offering tuition reimbursement for teachers who need course credits to get their V.I. teaching certificate, she said.
– In September, the department with the Middle States Association of Colleges and Schools, the territory's accrediting body, will hold accreditation workshops for administrators and staff of the territory's high schools.
The workshops are to outline what needs to be done for the schools to begin trying to regain accreditation. Presenters will discuss the problems that led to the loss of accreditation and what needs to change, and then participants will learn about the self-study that each high school will need to undertake. The re-accreditation process involves outlining programs for improving schools and setting up schedules to see those improvements through, Middle States officials have said.
The territory is seeking accreditation for all four high schools, Michael said Wednesday.

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Dear Source,
Gov. Charles Turnbull's refusal to nominate qualified citizens to fill board and commission vacancies continues to shortchange the interests of the residents of St. Croix. It's a known fact that the board of trustees of the University of the Virgin Islands is absent two members from the St. Croix private sector, while the V. I. Port Authority board also operates with two vacant chairs that should be filled with Crucians. This vacuum of opinion does not allow for a balanced representation of the citizens of all islands; instead, St. Croix has little or no voice in the actions of some of these government agencies.
As a case in point, just recently, the Port Authority board met to discuss a number of issues, one of which was a proposal by Royal Caribbean Cruise Lines to allow fuel bunkering on St. Thomas. As I understand it, the Port Authority staff recommended that the board not accept the proposal for two main reasons. The first one was that if Royal Caribbean was allowed to bunker fuel on St. Thomas, the action diminished the chances of St. Croix attracting the cruise line back to its port in Frederiksted where fuel bunkering is available. The second reason was an environmental one; as the St. Thomas harbor is not a naturally flushing harbor, an oil spill could cause much damage.
Despite the reasons articulated by the Port Authority staff, the board members at the meeting, consisting of three from St. Thomas and only one from St. Croix, took the opposite tack and voted to approve Royal Caribbean's proposal. The only dissenting vote came from the St. Croix member. The outcome of this vote may well have been different if the Port Authority board had fair representation from St. Croix. It's interesting to note that the Port Authority staff, and in particular Executive Director Gordon Finch, were the group arguing for the interests of St. Croix.
This is but one example in a string of many, of how the people of St. Croix have not been and still are not being fairly treated by the present administration. Their interests are not being served, their voices are not being heard, and their futures are not being considered by Gov. Turnbull. St. Croix needs and deserves better, as we all do.
John de Jongh
St. Thomas
Candidate for Governor
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