All V.I. government agencies will have to audit or review their voice, data and internet connectivity contracts and report the information to the Legislature if a bill approved by the Finance Committee on Thursday becomes law.
As initially proposed by Sen. Nereida "Nellie" Rivera-O’Reilly, the bill would have the Finance Department and the Division of Property and Procurement conduct the audit. When the bill was first considered in May, O’Reilly requested the committee hold the bill for further amendment, after hearing testimony that Finance may not be in the best position to perform that function.
During that May hearing, O’Reilly said the bill’s purpose was to look for ways to consolidate and rationalize the government’s many telecommunications contracts, to help make them more efficient and uniform, and to save money.
At the outset of Thursday’s hearing, O’Reilly said her office had crafted an amendment in June, removing the Department of Finance from the process and, instead of an outside audit, directing each department to write up a review of its contracts and submit a report to the Legislature by the end of the year.
The amendment was drafted, but stuck in Legal Counsel, O’Reilly said, urging the committee to send the measure on for consideration by the Rules and Judiciary Committee, where she would offer it.
"The amendment was submitted June 8, and our office has worked on a daily basis to get it out of Legal Counsel and, as of today, we still do not have the amendment," O’Reilly said.
Voting to send the bill on for further consideration were O’Reilly, Sens. Shawn-Michael Malone, Janette Millin-Young, Sammuel Sanes and Carlton "Ital" Dowe. Sens. Louis Patrick Hill and Celestino White were absent for the vote.
The committee voted to indefinitely hold in committee another bill from O’Reilly that would have removed the customs duty charged on goods shipped to the territory from within the U.S. Customs Zone.
By a quirk of history, related to the legal details of the U.S. purchase of the U.S. Virgin Islands in 1917, the territory is outside the U.S. Customs Zone, unlike Puerto Rico and other territories, St. Croix
Chamber of Commerce Vice President Mark Eckard testified.
As a result, the territory is able to charge its own customs duties, and ever since 1994 the federal government has collected the funds on behalf of the territory, keeping a portion to cover its own costs and remitting the rest.
But in recent years, Customs and Border Control has been retaining nearly all the funds, O’Reilly and Eckard said
"We have heard in the last two years of testimony from the V.I. Port Authority and the government that the territory no longer receives the same revenues," O’Reilly said. "The majority of customs duties have remained with the federal government and resulted in very little benefit to the government of the Virgin Islands."
Instead, she said, the duties simply increase costs for V.I. businesses and customers.
Attorney General Vincent Frazer urged the committee to hold the bill, saying the government is currently negotiating with the federal government over the issue and that legislation may sour those talks and have unintended consequences on federal services.
"The goal of the governor is to correct this imbalance and still maintain the level of services the people have come to expect," Frazer said.
Sanes asked Frazer, "To be clear, you are not against the bill but recommending it be put on hold until negotiations concluded?"
Frazer responded he was not testifying for or against the substance of the bill and did not want to say anything that might impact the ongoing negotiations, but wanted the measure held while those talks continued.
Voting to hold the bill in committee were Millin-Young, White and Dowe. O’Reilly voted nay. Malone and Sanes abstained. Hill was absent.
The committee also approved a series of budget transfers, permitting agencies to reallocate funding from areas of their budgets that had money remaining to fund pressing concerns that had insufficient budgeted funds.
The largest single transfer moved $3 million within the Department of Education (the largest government agency) from wages, salaries and benefits, and from the "other services and charges" line item. More than $2.9 million of that sum will now go to utility bills and $80,000 will pay to replace computers tools and equipment due to vandalism at its fiscal and administrative offices
Other transfers approved Wednesday by the Finance Committee and sent on for final legislative approval included:
– $770,000 within the Office of the Lieutenant Governor, from wages, salaries and benefits to supplies utilities, and "to purchase a fuel efficient vehicle for appraiser staff as they undertake mass appraisal of all properties for future real property taxes”;
– $533,000 within Human Services from wages, salaries and benefits to pay local matching costs for several federal grants;
– $348,000 within the Internal Revenue Bureau from wages and salaries to pay an array of other pressing expenses;
– $180,000 within the Office of Management and Budget, from budget administration to purchase new office equipment;
– $145,000 within the Division of Personnel from wages, salaries and benefits to a variety of other pressing needs;
– $135,000 within the Board of Education from wages, salaries and benefits, with $101,000 of that to cover past-due contracting costs, maintenance and repairs on its offices, and much of the remainder for utilities;
– $60,000 within VITEMA from utilities to fund maintenance;
– $39,000 within the Office of Collective Bargaining, to help with utilities, supplies and other services;
– and $35,000 within the Department of Finance from capital outlays and office supplies to utility bills and security costs.