The proposed rate hike by the V.I. Water and Power Authority was a hot topic for business leaders on St. Croix last week, but after letters went out to many business people accusing them of being in serious arrears with payment to the Department of Labor unemployment fund, that letter became the hot topic on the streets of Christiansted.
Kimberly McCollum, St. Croix Chamber of Commerce president, said Wednesday, “When an individual receives a letter from the attorney general that is a reason for concern. The news is generally not good news.”
The chamber board of directors, according to a press release, was not happy that the Office of the V.I. Attorney General had sent out letters of notice to businesses for failure to pay into the Department of Labor’s Unemployment Insurance Fund without confirming the accuracy of their statuses.
According to McCollum, the AG’s letter stated that failure to pay could result in legal action, causing much serious discussion in the business community. The chamber determined that numerous businesses were not only current but also may be due credits that Labor is failing to apply or address.
The St. Croix chamber reached out to both the Department of Labor and the Office of the Attorney General to request information regarding the situation.
On Wednesday several media sources indicated Labor acknowledged that many of the letters had been sent in error. McCollum said that acknowledgement alleviated much of the concern in the business community that had been expressed over the letters.
As for the proposed WAPA rates increase, McCollum said in a press release Tuesday, “Just as we were becoming comfortable with WAPA’s promise to establish reduced rates, we were all caught off guard by the announcement that WAPA will ask the PSC for an increase of over 9 percent in order to maintain its bond rating.”
Chamber representatives met with WAPA officials Monday to express dismay at the utility’s announcement last week that it will petition the Public Services Commission for a base rate increase effective July 1.
Present at the meeting was WAPA’s interim executive director and chief financial officer, Julio Rhymer; WAPA Board Chairman Gerald Groner; Senate President Neville James; and Sen. Sammuel Sanes, majority leader and chairman of the Energy and Environmental Protection Committee.
McCollum said the chamber of commerce was seeking to better understand the government’s debt to the utility and the impact of losing its credit rating, while maintaining the focus on the concerns of residents and businesses over the proposed increase.
According to John Lewis, chairman of the chamber’s Government Relations Committee, all parties left with a much greater appreciation for all sides and a renewed effort to minimize any necessary increases.
McCollum noted that “ultimately the Public Services Commission will decide on any increase.”The PSC is holding a special meeting at 3 p.m. Thursday on St. Thomas and McCollum plans to attend.
She added that the chamber of commerce is trying to set up a meeting with PSC Chairman Johann Clendenin “to further discuss the issue and reiterate its position that any and all rate increases will be burdensome on the community. “
The St. Croix Chamber of Commerce, according to its press release, is also troubled about the status of the V.I. Government’s Insurance Guaranty Fund, which remains far below the original legislated minimum of $50 million. In 2012, the cap was lowered to $10 million to allow the government to move any surplus funds into the General Fund to meet operating expenses.
It is mandatory that all insurers licensed in the territory be members of the V.I. Guaranty Association, and in the event of insolvency of any insurer, if remaining funds are insufficient to pay claims, other licensed insurers can be assessed a penalty to cover the gap.
The chamber’s press release asserted, “This fund should be increased especially in light of predictions of more frequent climate change catastrophes in the region such as earthquakes tsunamis, hurricanes, etc.”
The chamber has requested that the Senate place this issue among its top priorities to address and correct.
On top of that concern about insurance, the chamber noted, “To further cause concern with the state of insurance coverage in the Virgin Islands, the territory is faced with losing one of the only two carriers that will cover small businesses with healthcare insurance programs.While current healthcare insurance conditions are far from good, the announcement of the departure of Blue Cross/Blue Shield from the territory brings renewed and strengthened cause to question the future of health care and insurance for the citizens of the Virgin Islands. “
The chamber is requesting to meet with the lieutenant governor and the director of the Division of Banking and Insurance to further discuss how to mitigate the damage of this decision on small businesses and residents of the territory.