March 30, 2004 – The final version of a new Memorandum of Understanding between the local government and the U.S. Department of the Interior may bear little resemblance to the draft version leaked to the news media last week.
Speaking from his Washington, D.C., office on Monday, David Cohen, deputy assistant secretary of the Interior, said the leaked document "should not create any sort of expectation on anyone's part that this is what the parties are going to agree to."
He added: "We are going to work together in good faith to craft an arrangement that is realistic and that both parties can agree to. We are just starting that process."
Last December, Gov. Charles W. Turnbull submitted to Interior a new draft MOU to supersede the one he and then-Interior Secretary Bruce Babbitt signed in 1999. The document became public knowledge at a March 23 legislative session when minority senators circulated a copy of the draft document. (See "Turnbull seeking $104M in new federal aid".)
The governor's draft memorandum differs significantly from the 1999 document, especially in its requests for federal money — a total of $104 million, including at least $75 million for court-ordered waste-management and transportation infrastructure improvements. To comply with the court mandates, Turnbull asked for "no less than $15 million per year for the next five years, beginning in fiscal year 2004."
Cohen said he was aware of the Senate's authorization last week of a new $105 million bond issue earmarking $70 million for wastewater treatment plants and sewer repairs.
"I would not put too much emphasis on the amounts in the first draft," he said of the new memorandum. "These amounts are really a statement of need, rather than an actual expectation that the federal government can provide."
Cohen said he would respond to Turnbull's draft in the "next two weeks, may be sooner."
"I understand there are lots of things in the first draft that will be very difficult for the federal government to provide," Cohen said. "However, I believe the [local] government made a conscious decision to use the first draft to go on record to demonstrate the magnitude of the V.I.'s needs in certain areas."
Cohen said that "to the extent that the governor was making a point, the point is well taken. But the actual MOU that is signed will be the result of the negotiations." And according to Cohen, how long those negotiations will take is hard to say. "The process really depends on motivation of the parties and the issues they have to deal with," he said.
Nathan Simmonds, director of the governor's Office of Fiscal and Economic Recovery Implementation, said on Tuesday that "the MOU is a preliminarly draft taking into account several circumstances and changes that have occurred in the territory. Nothing has been determined or even negotiated at this initial stage. Nothing has been discussed at the level this is going to."
Under the draft new MOU, the V.I. government would be obligated to balance its budget annually, keep employment at a level consistent with revenue growth or lack thereof, continue to submit single audits for each fiscal year, establish a Federal Grants Management and Development Office (also a requirement of the 1999 memorandum) and submit quarterly reports to the Secretary of the Interior on progress made in achieving these objectives.
In addition to the $75 million for waste management and transportation improvements, the new draft MOU asks for:
– $1 million for technical assistance for the V.I. Tax Study Commission
– $1.5 million for the Internal Revenue Bureau to update its software systems
– $1.5 million for further implementation of the Five Year Operating and Strategic Financial Plan
– $1 million in technical assistance to the government and the University of the Virgin Islands for UVI's new Research and Technology Park
– At least $8 million in technical and financial assistance for each of the next three fiscal years "to strengthen financial management, human resources and information technology systems."
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