July 22, 2004 – Senators got encouraging news about horse racing in the territory on Wednesday, as the Senate Finance Committee fiscal year 2005 budget hearings continued into their third week. The lawmakers also heard pleas for financial support from the Labor Department and the Labor Management Committee.
The St. Thomas-St. John and St. Croix committees of the V.I. Horse Racing Commission both asked for budget increases. Gilbert Comissiong, St. Thomas-St. John chair, asked for $95,000, a 10 percent increase from FY 2004. St. Croix commission member Elroy Harrison topped that with a request for $155,300, a 62 percent increase from the commission's $96,000 FY 2004 budget request.
Both committees also announced progress in contracts for new companies to manage their respective racetracks.
Clinton E. Phipps Racetrack on St. Thomas has been embroiled in turbulent relations with the Virginia-based EQUUS-St. Thomas Racing Inc, which defaulted on its promises to improve the track. In a December 2003 hearing of the Senate Housing, Parks and Recreation Committee, Luis de Prat, EQUUS director of corporate development, admitted that the Puerto Rican company because of financial problems had not come up with the capital to make several required improvements to the racetrack.
EQUUS was at the time in severe financial trouble, de Prat said then, and owed almost $10 million in taxes and other payments to the Puerto Rican government and other jurisdictions in which it promoted horse racing. (See "Senate Probes Horse Racing Contract".)
Comissiong said in December that the St. Thomas-St. John committee was aware that EQUUS-STRI was in violation of its contract but had not taken any action, because "we were trying to get some very specific information on that point so a decision could be made."
On Wednesday, Comissiong said a request for proposals has been sent out for lease franchises to manage the track, including to a different group in Puerto Rico. Questioned by Sen. Adlah "Foncie" Donastorg, Finance Committee chair, about money owed by EQUUS-STRI, Comissiong said: "Things are not finished with ESTRI yet. If we have to, we may file a lawsuit."
Harrison said he hopes St. Croix will have a franchise for Randall "Doc" James Racetrack in effect by September. An agreement is in the works now with Traxco Inc., a subsidiary of Divi Carina Bay Resort.
The St. Croix committee has operated on a very lean budget since V.I. Racing Corp. VIRCO — ceased operations in 2002, Harrison told the senators. He said the committee has maintained the track in VIRCO's absence. This year's budget request includes a $65,000 annual salary for an executive director, he said, because it is "virtually impossible" for any commission, horse racing or otherwise, to operate in an efficient manner "without someone to run the day-to-day operations."
Labor Commissioner Cecil Benjamin said the governor's proposed $3.8 million FY 2005 budget request for his department is "bare bones." He said, "What you have before you represents a very conservative request" and that any cuts would "hinder the department's ability to develop a skilled, trained and productive work force."
The proposed $12.7 million budget includes $7.5 million in federal funds and $1.7 million from the Government Insurance Fund, along with $3.8 million from the General Fund.
Sen. Roosevelt David asked Benjamin if any labor laws are at issue in the pending closing of the Grand Beach Palace Resort, which announced on July 1 that it would close temporarily on Aug. 28 because the St. Thomas property needs an overhaul. The closing will put 293 employees out of work. (See "Grand Beach Palace Resort to Close for Renovations".)
Benjamin said his department is investigating the situation. "Once the resort is closed," he said, "we will have to help these people find work."
Responding to questioning by Donastorg, Benjamin said the hotel owners are claiming new-resort status because Mexico-based Palace Resorts purchased the property less than a year ago. As a new resort, under the territory's plant-closing law, it is not required to make longevity-based severance payments to employees, although some of the workers have been with the hotel for as long as two decades under various ownerships and managements.
Benjamin said: "This is a very sticky situation."
Labor Management Committee
Sylvia Sergeant, executive director of the V.I. Labor Management Committee, defended her agency's request of $146,036, which is $100,000 more than FY 2004. According to its mandate, the committee's main focus is training. It promotes the improvement of labor-management relations for government employees thorough lectures, seminars, research and publications design. It was established in 1985 to assist in the resolution of labor problems before they reach the grievance and arbitration stages.
Sen. Ronald Russell said: "We need to be able to justify how and why we're funding these various entities. In a fiscal crisis, we cannot be giving money away without understanding the purpose of these committees."
Sergeant said the committee holds workshops and open houses so people "can come in and see what we do."
Committee members present for the hearing were Sens. David, Donastorg and Russell. Not present were Sens. Louis Hill, Norman Jn Baptiste, Shawn-Michael Malone and Luther Renee. Also attending the meeting was Celestino A. White Sr., who is not a member of the committee.
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