The Turnbull administration has overestimated revenue projections for its revised $432 million FY 2000 budget by $135.3 million, according to a report from Post Auditor Campbell Malone.
Moreover, Malone identified two other potential revenue losses that could boost the shortfall to as high as $160 million.
One is the pending sale of Chase Manhattan Bank to the V.I. Community Bank — if VICB is granted tax relief on those additional assets. The other is the interest the government would pay on a $300 million bond issue recently authorized by the Legislature.
However, another financial analyst who asked not to be named cautioned that the pending bank sale and the bond issue, which are not yet in place, could happen far enough into FY2000 to lessen their impact on revenue projections.
Meanwhile, the Senate Finance Committee late Thursday abruptly postponed until next Tuesday a meeting at which the committee was to take action on 16 remaining individual budget bills. The meeting had been scheduled for early Thursday afternoon.
Calling the situation "another challenge" in formulating a "viable" budget, Committee Chair Lorraine Berry said balances in various unidentified government funds must be reconciled with the Finance Department and Office of Management and Budget before the committee moves forward.
In his 52-page report sent Oct. 13 to Berry, Malone broke down into 10 areas his estimate that projected revenues realistically should be reduced by $135.3 million.
The largest suggested cut was in personal income-tax projections, which the post auditor said should be reduced by $68.1 million.
Malone attributed much of the projected shortfall to the general decline in economic activities, saying, "Revenues are down, major funds are overdrawn, layoffs and firings are imminent," resulting in a 9 percent decline in income tax collections.
Malone also said the revenue projections were incorrectly counting twice the witholding payments of government employees.
Malone said projected revenues from the Caribbean Basin Initiative Fund, the Interest Revenue Fund, the V.I. Lottery and the Internal Revenue Matching Fund, amounting to $11.3 million, should be removed because "none of these funds could sustain the indicated appropriations as suggested in the FY 2000 budget."
Malone said the sale of delinquent property liens should be removed entirely as a source of revenues because there was no basis to indicate an increase in revenues. "If a more substantial basis, say a signed commitment," were secured for sale of the liens, then the revenues could be upgraded, Malone said.
Malone also said there was no basis to include revenues from a solid waste fund in the budget.
Of the $14.4 million projected for collection of back taxes by the Internal Revenue Bureau, Malone said, "This definitely requires more than lip service; an absolute, funded commitment must be undertaken in order to realize these collections. Given the current funding levels and difficulties at IRB, this goal definitely seems unrealistic, as least by the amount of the reduction."
Malone decreased the projected revenues as follows:
– Personal income taxes, $68,080,151.
– Trade and Excise taxes, $3,500,000.
– Gross receipt taxes, $9,000,000.
– Caribbean Basin Initiative fund, $2,300,000.
– Interest Revenue Fund, $2,000,000.
– VI Lottery Commission, $349,000.
– Internal Revenue Matching fund, $6,700,000.
– Sale of delinquent property tax liens, $27,000,000.
– Solid Waste Fund, $2,000,000.
– Collection of accounts receivable, $14,400,000.
Malone's report contained a number of measures he said must be taken to improve cash flow and revenues for the current fiscal year, many of which have been previously discussed.
They include:
– Reprogramming funds from the tobacco settlement.
– Eliminating subsidies to revenue-generating agencies.
– Eliminating requirements for bid bonds and performance bonds.
– Renegotiating government leases.
– Renegotiating contracts.
– Initiating actions to recover a user fee for the Port Authority and other quas-government entities.
– Initiating landfill tipping fees.
– Outsourcing accounts receivable in IRB, the Finance Department and Property and Procurement.
– Initiating a cruise-ship user fee.
– Installing parking meters.
– Privatizing a number of agencies.
– Initiating a shoppers' visa program.

Gov. Charles W. Turnbull has withdrawn the nomination of Michael Bornn to be Tourism commissioner, effective immediately.
According to Bornn, Turnbull told him Thursday afternoon that he couldn't work with him. Bornn said his public criticism of Turnbull's plan to float $130 million in bonds was the last straw for the governor.
The governor in a subsequent press release agreed with Bornn's assessment.
Bornn "actively opposed the bond issue initiative of the administration even to the extent of openly lobbying members of the Legislature to vote against the measure," Turnbull said in a late-night release. "This is only one of the flagrant actions of acting Commissioner Bornn contrary to my wishes and intent."
Turnbull named Assistant Commissioner Monique Sibilly Hodge as acting commissioner, a position she held prior to Bornn's nomination.
Turnbull said he made his decision about Bornn "after much pondering and consideration."
No top official "can be permitted to circumvent the policy directives of the governor," he said.
Calling Bornn "very brilliant and capable," he wished him well.
Bornn has been outspoken — even occasionally strident — about what the government and the tourism industry need to do in order to attract more visitors and boost tourism revenues.
The business community, particularly hoteliers, have applauded Bornn's candor and the direction in which he was taking the department. He also sailed through the Senate Rules Committee during its confirmation hearings.
"I know I could add tremendous value to the Virgin Islands," Bornn said. "However, the political establishment is not prepared to deal with the truth [or to]implement the changes necessary to ensure a vibrant economy and society."
The announcement of Bornn's ouster dismayed many people in the hotel business.
St. Thomas-St. John Hotel and Tourism Association president Richard Doumeng said, "I hope it's not true." He added, "If we now tell our travel partners, who are already deeply concerned about our government's ability to market the territory, that there will be a fourth name placed as Tourism commissioner in 12 months, it will be another blow to our credibility."
Doumeng said the situation "once again underscores the absolute need to de-politicize the Department of Tourism. The lifeblood of this economy should not be held hostage to the political process."
A year ago, Wylie Whisonant was Tourism commissioner in the Roy L. Schneider administration. Turnbull nominated Clement "Cain" Magras for the position, but Magras was rejected by the Legislature in April. Bornn's nomination was submitted in early August and was approved by the Rules Committee on Sept. 21.
Renaissance Grand Beach Resort general manager John Murphy said, "I think this is a tragic sequence of events for our tourism industry, especially at this critical time at the beginning of season."
He called the withdrawal of Bornn's nomination "a serious blow to our hopes and aspirations of the past two months."
Murphy expressed doubt that anyone could step into the position at this point. "I believe Michael had the leadership skills and the academic base to take tourism where it needs to go," he said.
Asked what he was going to do next, Bornn said, "I'm going to go back to making money."
Bornn will return to his position at Seslia Securities where he is an investment counselor.
No one at Government House could be reached for comment.

In a signing ceremony at Government House, Kingdom of Denmark ambassador to the United States K.D. Tygesen, Danish Minister of Culture Elsebeth Gerner Neilsen and Gov. Charles Turnbull paved the way for the preservation and sharing of historical records between Denmark and the US Virgin Islands.
Turnbull said the documents are, "historic ties to the rich and diverse cultures of both governments."
"When Danish rule of the West Indies ended in 1917," said Neilsen, "many of the records were removed to the Danish National Archives in Copenhagen."
This meant Virgin Islanders have had difficulty gaining access to their history and identity.
"People must have access to that historic information to trace families. Denmark finds it imperative to make this information available here," she said.
The signing of an agreement to share the archival history of Denmark and the Virgin Islands will make this possible.
The Danish government has committed $300,000 to the project which is expected to take four to five years to complete.
The documents are currently stored in a number of places in Denmark, the Virgin Islands and the United States.
A program involving surveying, preserving and documenting all records on microfilm will be undertaken by the Department of Planning and Natural Resources.
This will also include an educational program training Virgin Islanders in the Danish language and in archival procedures.
The historical records will be copied for eventual transfer to the Virgin Islands.
"This is a testament to the deep and lasting connections between Denmark and its former territory," said Turnbull.
Development of the program, according to Turnbull, is for the benefit
of present and future generations of both Denmark and the US Virgin Islands. "These documents represent the historic ties of the rich and diverse cultures of both governments," he said.
"The characters of Frederiksted, Christiansted and Charlotte Amalie are testament to the deep and lasting relationship of the US Virgin Islands and Denmark."
Turnbull said this project represents a milestone in uncovering more of
our past and preserving our history for future generations.

It doesn't usually take an airborne flotilla to get an orchestra from its home base to its performance venue. But the Reichhold Center for the Arts doesn't often host the Puerto Rico Symphony Orchestra — which it is doing for its season-opener concert on Saturday night. In fact, it has done so only twice before, back in 1979 and 1981.
On Friday morning and afternoon, 75 members of the orchestra and 10 support staff will fly to St. Thomas aboard anywhere from four to seven commuter planes. The musicians' instruments, including a harp and kettle drums, will come over separately in the afternoon on a larger jet.
The concert, a Birch Forum production, represents the first-ever opportunity for a generation of young people to hear the symphony orchestra, known to Puerto Ricans as La Sinfonica, perform on island. (Only one other full orchestra has ever played at the Reichhold, for that matter — the Arturo Somohano Pops Orchestra, also from Puerto Rico, also in the '80s.)
It was in part with a young audience in mind that the music was chosen for Saturday's program, orchestra general manager Aida Gisela Acensio says. The Overture (or "Prelude") to Wagner's Die Meistersinger von Nurnberg is a joyful showcase for strings and brass; Beethoven's bombastic Fifth Symphony, at least the opening bars, is familiar to almost everyone; and Stravinsky's The Firebird Suite is one of the best-known works of the "contemporary" classical repertoire. The fourth work on the program, a saxophone concerto by early 20th Century Russian composer Alexandr Glazunov, will feature as soloist a teen-age student at Puerto Rico's Conservatory of Music, Edgar Marreiro, whose father plays viola in the orchestra.
Ricardo Charaf, a former Puerto Rico resident and Birch Forum member, and his wife, Josephine, are in charge of the logistics, which for the next few days will be an all-consuming job. Musicians must be met at the airport and taken to their hotel; the instruments must be picked up and taken to the Reichhold where orchestra members will assemble them as needed and make sure everything is in working order. The visitors will be guests of honor at a private reception Friday night. Everyone must be transported to the Reichhold for rehearsal at 2 p.m. Saturday, all must be in order for the concert at 8, then the musicians must be taken back to their hotel, and next day, everyone and everything must be gotten back to the airport for the return to Puerto Rico.
"It's a very big undertaking," Charaf, a native of Argentina, says, but it's worth the effort from the St. Thomas perspective. He has heard La Sinfonica perform many times in Puerto Rico as well as many other orchestras there and elsewhere in the world, and this one, he says, is "not to be missed."
Concert time is 8 p.m. Seating is reserved. Tickets are $50 for the covered section, $25 for the lower open-air seating, and $5 for the upper open-air seats. They may be purchased on St. Thomas as the Draughting Shaft in Sub Base, the Modern Music in Havensight, Parrot Fish Music, Crystal & Gifts Galore, the University of the Virgin Islands Humanities office, and the Reichhold box office. On St. John, they're available at Connections. Charge card purchased may be made by calling 693-1559.
Music students — any students, for that matter — are welcome to sit in on the 2 p.m. rehearsal. "They just need to be well behaved," Birch Forum member Leona Bryant said. Bryant spent Thursday morning taking free tickets to students at a number of schools. Even though a $5 seat costs no more than a fast-food meal, she said, "they prefer the fast food. We don't want them to have any excuses."

Hearings on the lawsuit seeking to block the land exchange between the V.I. government and rocket mogul Andrew Beal will continue Thursday after more than seven hours of arguments in Territorial Court Wednesday.
In a marathon session that was to determine whether a preliminary injunction should be issued against the land swap, Judge Alphonso Andrews Jr. allowed lawyers for Caribbean Space Technologies to intervene in the case on the side of the government.
The hearing will continue at 1:30 p.m. Thursday at the Territorial Court at Kingshill.
Sen. Alicia "Chucky" Hansen’s suit alleging the land exchange agreement is illegal named Gov. Charles Turnbull and the V.I. Legislature as defendants. However, Caribbean Space Technologies’ lawyers argued that they had significant interest in the case and should be allowed to enter the fray.
"I don’t think there is any doubt that Caribbean Space Technologies has direct interest in this property," said Beal attorney Daryl Dodson.
Caribbean Space Technologies LLC, a V.I. company, is 99 percent owned by Andrew Beal and is an affiliate, not a subsidiary of Beal Aerospace Technologies, which is fully owned by Texas real estate developer and fledgling rocket manufacturer Andrew Beal.
The land exchange agreement that was signed by former Gov. Roy Schneider at the end of 1998 and submitted to the Senate by Turnbull was between the government and Beal Aerospace Technologies. But when the Legislature approved the agreement on Oct. 5, it amended the bill to make Caribbean Space Technologies the legal company.
Turnbull cited that change in allowing the bill to pass into law without his signature. Andrews had questioned its legality and, by extension, Caribbean Space Technologies’ involvement in the lawsuit.
"The only way that CST can establish a significant probable interest … is through illegal action on the part of the governor of the Virgin Islands…" said Hansen’s attorney Ned Jacobs.
Despite Jacobs’ argument, though, Andrews ruled that Caribbean Space Technologies had a significant interest to protect.
As soon as Beal’s lawyers were allowed to be heard, they asked Andrews to dismiss the case. Dodson claimed Jacobs had failed to state a legitimate claim, in that the land exchange agreement, which became law Tuesday, did not violate the U.S. Constitution or the Revised Organic Act.
He also said the Legislature can legitimately amend, revise or make exceptions to prior legislation.
But Jacobs argued that under the equal-protection clause of the Constitution, the Legislature cannot favor one person or entity when making laws. He maintained that had been done on behalf of Caribbean Space Technologies.
Andrews then denied the motion to dismiss.
"The Court would have to find that it is a … special law," said Andrews.
Once that motion was out of the way, the hearing on the preliminary injunction began.
Hansen and the other 19 plaintiffs in the case contend that the land in question, 14.5 acres at Camp Arawak, was deeded to the people of the Virgin Island in perpetuity and cannot be sold or traded.
Jacobs called Beatrice York, executive director of Camp Arawak, and ecologist Olasee Davis to the stand.
York testified that Camp Arawak had been used as a summer youth camp almost continuously since 1984, when she became involved in the program. The camp moved to Estate Diamond Ruby last year, she said, because its site at Great Pond Bay was burglarized after Hurricane Georges and virtually all its equipment stolen.
Davis testified to the natural and historical significance of the Great Pond site. He said the property contains historical artifacts that are "extremely significant" to the people of the territory.
On Oct. 5, the Legislature approved the land swap so that Caribbean Space Technologies could acquire the Camp Arawak acreage for a portion of a parking lot at Beal’s proposed $57-million world headquarters and rocket assembly plant near Great Pond Bay.
Beal already has an option on approximately 260 acres adjacent to the bay. The 340,000-square-foot assembly plant would be the largest single structure in the Eastern Caribbean, occupying up to eight acres.

The Reichhold Center for the Arts 1999-2000 subscription season begins with a bang on Saturday, Oct. 30, with a concert by the first honest-to-goodness symphony orchestra to perform in the territory in more than a decade.
Under the baton of maestro Eugene Kohn, the 75 members of Puerto Rico’s world-class "La Sinfonica" will perform four works from the traditional Eurocentric repertoire. Three of them should be familiar to most anyone who has ever endured a classical music appreciation course:
– The overture from Richard Wagner’s melodious opera Die Meistersinger.
– Igor Stravinsky’s The Firebird Suite, a composition that catapulted contemporary cacophony into the masterworks mainstream.
– Ludwig von Beethoven’s enduring Fifth Symphony, the one that opens with the dit-dit-dit-dah’ staccato even young children recognize.
The fourth piece on the program is Glazunov’s Saxophone Concerto.
This performance is one of two on the season lineup that is a co-production of The Everett B. Birch Forum, a local foundation that in the last four years has brought Maya Angelou, Elie Wiesel, Awadagin Pratt, Isola Jones, Anna Deavere Smith, "Of Ebony Embers" and Denyce Graves to the Reichhold stage. The other is an appearance in January of the Oakland Ballet, which has former Reichhold grants and production manager Renee Heider as its new executive director.
The logistics and costs of transporting and accommodating 75 musicians (plus their behind-the-scenes associates and their instruments) is daunting, so it’s not surprising that the Reichhold’s A section seats are going for $50 for this performance. However, shallow pockets are no excuse for skipping the concert. In the uncovered seating, tickets are $25 in the lower section and a mere $5 (less than a movie at local theaters if you’re over 12) up above.
Curtain time is 8 p.m.
The rest of the Reichhold season looks like this, with all performances at 8 p.m. unless indicated otherwise:
Saturday, Nov. 6 — "All The Kings’ Men," a tribute to Virgin Islands calypso monarchs including the reigning Whadablee; his immediate predecessor, Ras Regg; four-time winner Louis Ible Jr. (whose one-man show at the Reichhold last February wowed the audience); Nikki Brooks and The Mighty Pat, with backup by St. Croix’s popular Xpress Band. Tickets are $20 for all seats.
Saturday, Nov. 20 — Third World, the reggae band out of Jamaica that has carried the musical genre throughout the whole world, to great acclaim. There will two shows, at 7 and 10 p.m. Tickets are $25 for all seats.
Saturday and Sunday, Dec. 25/26 — the 2nd annual "Caribbean Christmas Style" in-house musical production. Tickets are $15, $12 and $8.
Wednesday, Dec. 29 — 21st Century, the jazz ensemble organized a couple of years ago by two St. Thomas sons makin’ it on the mainland — saxophonist Ron Blake and drummer Dion Parson. Playing mostly their own compositions, which fuse straight-ahead jazz effectively with Caribbean rhythms, often with other "locals," notably Reuben Rogers on bass, the band has been well received in its appearances at smaller venues here. Tickets are $25 covered and $18 open air.
Saturday, Jan. 15 — The Oakland Ballet. Tickets are $35, $18 and $5.
Saturday, Feb. 26 — "Mahalia," a new musical about the life of gospel great Mahalia Jackson. Tickets are $25, $15 and $10.
Saturday-Monday, May 13-15 — STARfest VI, the 6th annual in-house produced showcase of local talent, including the that of the Reichhold technical crew in staging and lighting, in its traditional Mother’s Day weekend slot. Tickets are $20, $12 and $8.
The Reichhold Center is also now marketing the return in 2000, after a two-year absence, of its summer Caribbean Repertory Company season. Three plays are to be produced — "Triptych," by St. Lucian playwright Kendel Hippolyte, June 23-26; "Jean and Dinah," by Tony Hall of Trinidad and Tobago, July 28-31; and "Smile Native Smile," by Reichhold director David Edgecombe, on Sept. 1-4.
There are savings to be had by buying tickets to multiple events. Packages for the five shows grouped in the Reichhold Foundation Series — the Puerto Rico Symphony, "Christmas Caribbean Style," Oakland Ballet, "Mahalia" and STARfest VI — for seating in the covered and lower open-air sections are discounted 20 percent.. If you choose five shows that include anything from the Foundation Series and the summer repertory series together, you’ll save 15 percent. And if you buy tickets to any four of these shows, you’ll save 10 percent. ("All the Kings’ Men," Third World and 21st Century don’t count toward discounts, according to the season brochure.)
Noting that the 1999-2000 season offers "as wide a range of productions as possible," Edgecombe says he hopes this diversity of options will "encourage more people to step out into something a little different."
In addition to the live performances, the Reichhold is offering a new "Cinema Sunday" film series, featuring award-winning foreign, animated and classic pictures. They’re offered most Sundays, at 7 p.m. with admission at $5. For a listing of dates and offerings, click here.
For information on ticket outlets and reservations by credit card, call the Reichhold box office at 693-1559. For more information about Reichhold programs, call 693-1550 or e-mail to boxoffice@reichholdcenter.com.

American Federation of Teachers President Glen Smith wants senators to say "no" to cost shifting on teachers' insurance and retirement contributions, changes in Act 4440 and elimination of five holidays. The issues are all part of the governor's memorandum of understanding with the Interior Department.
Smith wrote to Sen. Roosevelt David asking him to block the three initiatives placed before the Legislature by Gov. Charles W. Turnbull.
Smith said the initiatives put an additional load on the already-overburdened backs of government workers, and pointed out that teachers have not had salary increases for five years.
Smith said teachers are leaving the territory to find employment elsewhere because of the low salaries.
In the meantime sources have told St. Thomas Source that senators have a plan that will be included in the FY 2000 budget to increase property assessments by 5 percent. The extra money would go to the Education Department, specifically to increase salaries for beginning teachers.
Sen. Lorraine Berry was asked about the plan for Education during a meeting of the League of Women Voters earlier this month, but she would only say that more would be revealed during budget hearings.
Sen. Donald "Ducks" Cole also mentioned a plan by the Legislature to improve funding for Education. He, too, said he could not comment further about the plan.
Smith also wrote to Delegate Donna Christian-Christiansen asking her to explain her role in the memorandum signed early in October by Turnbull and Interior Secretary Bruce Babbitt.
Smith invited Christiansen to attend the monthly building representative meeting of the AFT at 4:30 p.m. Wednesday, Nov. 10, to make a presentation on the memorandum.

American Federation of Teachers President Glen Smith wants senators to say "no" to cost shifting on teachers' insurance and retirement contributions, changes in Act 4440 and elimination of five holidays. The issues are all part of the governor's memorandum of understanding with the Interior Department.
Smith wrote to Sen. Roosevelt David asking him to block the three initiatives placed before the Legislature by Gov. Charles W. Turnbull.
Smith said the initiatives place an additional load on the already over burdened backs of government workers, pointing out that teachers have not had salary increases for five years.
Smith said teachers are leaving the territory to find employment elsewhere because of the low salaries.
In the meantime sources have told St. Thomas Source that the senators have a plan that will be included in the FY 2000 budget that would increase property assessments by 5 percent. The extra money would go to the Education Department, specifically to increase salaries for beginning teachers.
Sen. Lorraine Berry was asked about the plan for Education during a meeting of the League of Women Voters earlier this month, but the senator would only say more would be revealed during the budget hearings.
Sen. Donald "Ducks" Cole also mentioned a plan by the Legislature to improve funding for Education. He, too, said he could not say any more about the plan.
Smith also wrote to Delegate Donna Christian-Christiansen asking her to explain her role in the memorandum signed early in October by Turnbull and Interior Secretary Bruce Babbitt.
Smith invited Christiansen to attend the monthly building representative meeting of the AFT at 4:30 p.m. Wednesday, Nov. 10 to make a presentation on the memorandum.

American Federation of Teachers President Glen Smith wants senators to say no during hearings today, Thursday, to increases in teachers' insurance and retirement contributions, changes in Act 4440 and elimination of five holidays.
The issues are all part of the governor's memorandum of understanding with the Interior Department.
Smith has asked Sen. Roosevelt David to block the three initiatives, saying they place an additional load on the overburdened backs of government workers. He noted that teachers have not had salary increases for five years, and were leaving the territory to find employment elsewhere because of the low salaries.
St. Thomas Source has learned, meanwhile, that Senators have a plan to increase property assessments by 5 percent. The extra money would go to the Education Department, specifically to raise the salaries of beginning teachers.
Sen. Lorraine Berry was asked about the plan during a meeting of the League of Women Voters earlier this month, but she would say only that more would be revealed during the budget hearings.

In a remarkably quiet, brief and orderly session Wednesday, the Senate Finance Committee approved 19 of the 35 bills on its agenda for the FY 2000 budget.
Chairwoman Lorraine Berry noted that the committee has been tangling with the budget since it was first received from Gov. Charles W. Turnbull almost five months ago.
Berry also noted that at the budget's reception, Campbell Malone, Legislature post auditor, cautioned that it was "flawed and dangerous." Berry commended her colleagues for "diligence and perseverance" in going over the often complex budget issues.
Fifteen of the 20 bills sent on to the Rules Committee contained the amendment that "each item contained in this act shall be reduced by the sum expended for the objects and purposes of such item between Oct. 1, 1999, and the effective date of this act."
Bill No. 23-0099 providing for an appropriation from the Tourism Advertising Revolving Fund to the Department of Housing, Parks and Recreation during the fiscal year ending Sept. 30, 2000, was amended to change the total amount of the bill from $500,000 to $450,000.
Bill No. 23-0099 to appropriate monies from the Anti-Litter and Beautification Fund to the Public Works Department for FY 2000 was amended to include St. John.
Bill No. 23-0124 providing an appropriation from the Fish and Game Fund was held over until Thursday's session, awaiting a balance update.
Bills that should stir some action Thursday include No. 23-0164, which provides for eliminating five current government holidays, and the controversial No. 23-0163, which addresses adjustments in retirement contributions.
Attending the meeting were Sens. Gregory Bennerson, George Goodwin, Roosevelt David and David Jones. Sen. Anne Golden was excused and Sen. Alicia "Chucky "Hansen was absent.
Thursday's session, originally scheduled for 10 a.m., has been rescheduled for 1 p.m., so senators can attend the funeral for John deJongh Sr.

Editor's note: For a summary of all the bills being considered this week go to Local Government, Senate Calendar.