Waste Management tells Senate that government refuses to release $6.8M in special funds to them
Published: August 15, 2014
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ST. THOMAS - V.I. Waste Management Authority officials told senators Thursday that the central government is refusing to release $6.8 million in special fund money needed to cover the current fiscal year's operating budget.
Waste Management Authority Executive Director May Adams Cornwall came before the Senate Finance Committee on Thursday to defend her agency's Fiscal Year 2015 budget request of $22.3 million.
The amount is $929,600 less than last year's appropriation.
Much of Thursday's testimony focused on the current fiscal year and the major budget shortfalls facing the authority.
About 25 percent of the Waste Management Authority's FY 2014 budget appropriation was scheduled to come from four different special funds - funds that collect money from sources other than the General Fund.
The agency was supposed to get a total of $7.8 million from the four funds: $3.5 million from the Antilitter and Beautification Fund; $3 million from the Sewage Fund; $1 million from the St. John Capital Improvement Fund; and $300,000 from the Tourism Advertising Revolving Fund.
To date, Waste Management has received less than $1 million from the special funds, Cornwall said.
Coupled with the 2 percent General Fund budget cut of approximately $386,946, the Waste Management Authority is struggling to continue basic waste and sewer services and is thinking about cost-cutting measures, such as furloughs or layoffs, Cornwall said.
Cornwall said the Office of Management and Budget told her agency the money from the special funds cannot be released because the funds are over-appropriated and have encumbrances - pledges against the fund - that are outstanding and need to be cleared up before the funds can be released.
Cornwall said many of the encumbrances are from more than 10 years ago, when the Public Works Department had responsibility for solid waste and sewage treatment in the territory. She said her staff is working with OMB and Public Works to remove or liquidate all encumbrances from the special funds.
Sen. Craig Barshinger was skeptical of the government's explanation of the funds being encumbered. He said he has asked repeatedly for years for a current balance on the St. John Improvement Fund and has not received it. He also asked for a breakdown to show exactly what the encumbrances are for, but it has not been provided, he said.
"We cannot run a government based on fake financial information," Barshinger said.
The Sewer Fund issue is slightly different, although it also is in the red. The fund collects the sewer surcharge assessed to property tax bills in the territory. The government planned to issue two years of bills - for 2013 and 2014 - in FY 2014, which would have left the special fund with plenty of money.
However, the 2013 bills are being issued later this month, and the 2014 bills will be issued by the end of the calendar year but not by Sept. 30, which is the end of the current fiscal year.
Looking forward to FY 2015, Cornwall said without the special funds, the Waste Management Authority is facing a $17.5 million budget shortfall.
To help offset the lack of special fund funding, the Waste Management Authority has proposed legislation and submitted petitions to the Public Services Commission to boost revenues. If all the measures are accepted, the agency's budget deficit would be reduced to only $3.7 million.
The measures proposed include solid waste tipping fees; implementing the proposed wastewater user fee; and changing the law to allow the antilitter and beautification and sewer fund revenues to come directly to Waste Management's accounts.
Cornwall also asked the Senate to reconsider a $28 million bond authorization for the Waste Management Authority that would allow it to fund some necessary capital projects and complete the closure of the landfills to meet federal deadlines.
- Contact reporter Aldeth Lewin at 714-9111 or email email@example.com.
Fund FY 2014 appropriation Allotment received Balance outstanding
Antilitter and Beautification $3,548,522 $887,130.50 $2,661,391.50
Sewage Fund $3,000,000 $0 $3,000,000
St. John Capital Improvement Fund $1,000,000 $0 $1,000,000
Tourism Advertising Revolving Fund $300,000 $75,000 $225,000
Total $7,848,522 $962,130.50 $6,886,391.50
Fund Balance as of July 24, 2014 Encumbrances
Antilitter and Beautification $4,686,730 -$16,732,730
St. John Capital Improvement Fund $4,762,970 -$9,310,464
Sewage Fund -$6,883,009 -$216,232
Tourism Advertising Revolving Fund $29,854,641 -$12,789,299