At least one V.I. government agency has increased its earnings over the last few years. Board members of the V.I. Public Finance Authority learned Tuesday that since a new investment advisor was hired, the agency earned $5 million instead of $1.5 million on the same investment funds in a New York bank.
The Authority is also working around ratings agencies that have downgraded Virgin Islands bonds and are working directly with individual investors through a website. PFA reports financial information to the website, including daily cash amounts, and is starting to see individuals willing to purchase bonds at up to $1.15 rather than $.45 previously on the bond markets.
Margaret Guarino, PFA director of finance and administration, asked for board approval to hire a firm to monitor the information for the website to avoid liability and maintain compliance with the Security and Exchange Commission.
“The ratings agencies tied us with Puerto Rico and Promisa,” she said. “Investors are saying ‘We don’t pay attention to agencies because we know they’re doing you wrong.’”
The board approved $30,000 for an initial payment to cover training for staff and $5,000 a month for dues for a year to Squire Patton Boggs. Funding will come from the PFA administrative account.
The PFA board also approved paying an additional $5 million to an international corporation overseeing federal funds for disaster mitigation, bringing their total earnings to $85 million for a year’s work. They voted an increase of $5 million to another agency, bringing their total to $16 million for monitoring funds spent.
“It has grown because the government has maximized the scope of services it negotiated,” Valdamier Collens, V.I. Treasury director, said about the increases. “The rates don’t move.”
According to Gov. Kenneth Mapp, the fees will eventually be reimbursed by the Federal Emergency Management Agency.
Witt O’Briens is a crisis and emergency management firm, a subsidiary of SEACOR Holdings Inc. They were contracted last year to help the territory maximize federal funding to recover and rebuild after Hurricanes Irma and Maria.
Collins and Mapp explained to the board what programs Witt O’Briens helped secure as experts of the Stafford Act, which outlines the use and availability of funds for U.S. states and territories after a disaster.
Mapp said the company was “lobbyists with federal expertise” who attended all meetings about acquiring federal money from FEMA, the U.S. Office of Management and Budget and others. WOB helped lower from 25 to 10 percent required matching funds for certain grants and recommended the Rand Corp. instead of the Army Corps of Engineers to approve infrastructure repair and rebuilding.
Collins said they helped acquire $37 million in funding for the reroofing program, $1 million for road-building engineers, plus millions for community block grants and funding for the airports.
Guarino added that the corporation helps insure that the Virgin Islands avoids so called “claw back” from FEMA of funds not spent or spent properly.
Ernst and Young, with the $16 million contract, oversees Witt O’Briens for compliance and transparency, Guarino said. They also monitor grants, insurance and reporting to the federal government.
Asked by Keith O’Neale when the funds would be reimbursed, Collins said whenever the V.I. government determines the close outs of the various projects.
The board also discussed the status of the territory’s hospitals and the University of the Virgin Islands. FEMA has deemed both hospitals more than 50 percent destroyed and they, along with Charles Harwood, Myra Keating and Charlotte Kimmelman clinics, qualify for rebuilding from the ground up. Mapp suggested if both hospitals rebuild with half as many rooms, they will receive more funding, in the long run, from the Centers for Medicare and Medicaid.
UVI is due to receive $9 million for loss of revenue and operations through the community disaster loan.
Board members attending the meeting were Mapp, chairman; Collins; Keith O’Neale, Pablo O’Neill, and new members Dorothy Isaacs and Jackwrel Wallace.