While happy to hear work on a government-owned fiber-optic network and numerous public computer centers seems back on schedule, senators were unhappy with late-arriving and limited financial information, during hearings on the V.I. Next Generation Network, Friday on St. John.
The project hit a snag last year, with delays and paperwork problems triggering the National Telecommunication Information Administration, the federal agency providing the grant money, to temporarily stop work. The viNGN chief executive officer was let go and a corrective plan filed and accepted by the federal government last fall, and work resumed (see related links below).
Larry Kupfer, a former Hovensa Chief Executive Officer who took the reins at viNGN in April, testified construction of the main fiber optic network, the biggest component of the project, is on schedule to begin in September on all three major islands. The bulk of the work will be completed by the end of February 2013, with final network testing in March, Kupfer told the Economic Development, Energy and Agriculture Committee.
Sen. Shawn-Michael Malone, the committee chairman, opened the hearing saying he requested financial documents from viNGN on May 15, expecting them May 22, but they arrived June 20.
"I cannot tell you how peeved I am," Malone said. He said the senators just cannot thoroughly review such a mass of dense financial documentation that quickly, and questioned whether the delay was designed to make it more difficult for senators to seriously question the witnesses.
"I will not let it happen again," Kupfer said. Since he came on board three months ago, the viNGN management team had been scrambling to get all the financial reports and documentation into shape, he said.
Malone asked for a 2012 budget.
"Last summer the viNGN should have adopted a 2012 budget and we do not have that," he said. A 2013 budget is being prepared, but is not complete he said.
Vicki Johnson, who heads the Office of Economic Opportunity in the Public Finance Authority and is overseeing the federal grants on the project, said there were separate budgets for each of several federal grants, but no single overall budget.
During questioning, it came out that the territory has already received considerable tax revenues through the project and will receive much more as the viNGN purchases millions of dollars in equipment with federal grant money.
"When we buy off-island, can we charge gross receipts tax?" Malone asked. We do charge that tax, Finance Commissioner Angel Dawson said.
"One of my greatest pleasures is sending letters remitting various vendor amounts … so that is actively done," Dawson said.
Kupfer said when vendor contracts are paid, viNGN cuts one check to the vendor for 95 percent of the amount and another check to the V.I. Internal Revenue Bureau for the five percent gross receipts tax.
A single, large purchase not long ago resulted in a check in excess of $400,000, Dawson said. Malone asked how much gross receipts tax had been collected in total so far. Kupfer said he did not have the figure, but expects to get the balance in July.
Malone said the hearing will reconvene July 20, so senators can look over the information they have and viNGN can provide more information. He listed a variety of questions he wanted answers to before then, including:
- the total amount viNGN has spent on legal fees;
- an itemized list of expenditures to date;
- an operating budget for its use of locally appropriated funds the current and next fiscal year;
- and a breakdown of how local money has been spent over the last year.
He and other senators said they also want a site visit before the July hearing.
"If the information is available, it will help people to support it," Malone said. "The more you do that, the better it is for everybody, trust me. … In fact when you are digging the first shovel, I want to be there," he said.