BUDGET COMMITTEE REVIEWS COMPLIANCE AGREEMENT, TRANSPORTATION BUDGET, AND FISCAL UPDATES
ST. THOMAS – Senator Donna Frett-Gregory chaired the Committee on Budget, Appropriations, and Finance, which convened at the Capitol Building to address key fiscal and operational matters. Senators received testimony on the U.S. Virgin Islands’ compliance agreement with the U.S. Department of Education following its designation as a “high-risk grantee” under 34 CFR § 80.12. Department of Public Works officials discussed the FY 2025 budget for VITRAN, the public transportation system. The Virgin Islands Port Authority also provided updates and financial overviews for Fiscal Years 2024 and 2025.
The U.S. Virgin Islands was designated a “high-risk grantee” under 34 CFR § 80.12, which resulted in the delivery of testimony to Senators regarding the status of the Compliance Agreement between the U.S. Virgin Islands and the U.S. Department of Education. Julio Rhymer, Acting Director of the Office of Management and Budget (OMB) reported that the Virgin Islands Department of Education (VIDE) has implemented significant measures to ensure fiscal integrity and transparency in managing federal funds and procurement processes. Key initiatives include establishing a detailed drawdown log to track fund withdrawals, conducting monthly financial reviews for early discrepancy detection, and participating in federal grant communities to strengthen compliance. VIDE is enhancing staff capacity through ongoing training in standard operating procedures and federal guidelines, along with regular audits focusing on high-risk areas like payroll and procurement for fiscal year 2025.
Moreover, VIDE revised its Grants Management SOP on October 7, 2024, to streamline the reimbursement process and has requested a comprehensive compliance review from OMB to evaluate contract and payroll practices. In procurement, VIDE adheres to established procurement SOPs, provides regular staff training, and ensures transparency by making procurement information accessible to the public and vendors. They have also standardized their document management system using tools like SharePoint to support audit readiness. These efforts underscore VIDE’s commitment to responsible federal fund management, operational efficiency, and compliance with federal regulations.
Separately, representatives from the Department of Public Works provided testimony regarding the FY 2025 budget allocation for the public transportation system (VITRAN). Derek Gabriel, the Commissioner of the Virgin Islands Department of Public Works, announced the department’s request for a $5 million appropriation to the Public Transportation Fund to support VITRAN operations, given that federal funds primarily fund capital improvement projects and cover less than 30% of daily operations. The subsidy is essential to cover personnel costs of $4.9 million for 68 positions and $100,000 for fuel; without it, VITRAN would face severe financial constraints, potentially leading to significant service reductions or cessations and employee furloughs. In fiscal year 2024, VITRAN served 218,446 riders, with 20% receiving free rides; despite a rate increase in June 2024 to help cover rising operational costs driven by global economic factors, the service remains vital for senior citizens, persons with disabilities, and those relying on public transportation for essential services. The loss of VITRAN would devastate the community, emphasizing the necessity of the requested funding to maintain operations and support ongoing efforts to acquire new buses and ADA Paratransit vans to meet high ridership demand.
Carlton Dowe, Executive Director of the Virgin Islands Port Authority (VIPA), provided financial updates for Fiscal Years 2024 and 2025. On September 24th, VIPA’s Board of Governors approved a $199 million budget for FY 2025, covering October 1, 2024, to September 30, 2025. This budget reflects a 19% reduction from the $246 million operating and capital budget of FY 2024. Projected revenues for FY 2025 are $77.5 million, an increase from the $73.6 million projected for FY 2024. VIPA also anticipates receiving $69.5 million in federal grants and $5.4 million in passenger facility charges, with expenses estimated at $83.3 million excluding depreciation. The FY 2025 funds will be allocated towards operating revenues, passenger facility charges, car rental facility charges, capital grants, cash reserves, ARPA/CARES Act funds, government grants, and debt-funded marine projects.
Senators present included Donna Frett-Gregory, Novelle, E. Francis, Jr., Dwayne M. DeGraff, Marvin Blyden, Ray Fonseca, and Carla J. Joseph.
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