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VI Economic Development Authority A N N U A L B U D G E T F I S C A L Y E A R 2 0 1 4 “Economic Resurgence in Difficult Times” VI ECONOMIC DEVELOPMENT AUTHORITY FISCAL YEAR 2014 BUDGET October 1, 2013 – September 30, 2014 St. Thomas: 8000 Nisky Shopping Center, Suite 620 St. Thomas, U.S. Virgin Islands 00803 Phone: (340) 714-1700 www.usvieda.org St. Croix: 116 King Street, Frederiksted St. Croix, U.S. Virgin Islands 00840 Phone: (340) 773-6499 www.usvieda.org i VI ECONOMIC DEVELOPMENT AUTHORITY FISCAL YEAR 2014 BUDGET October 1, 2013 – September 30, 2014 TABLE OF CONTENTS Table of Contents…………………………………………………………………………………..i I. INTRODUCTORY SECTION Chief Executive Officer’s Budget Message .................................................................................... 1 I.1 Principal Officials ...................................................................................................................... 3 I.2 Mission Statement ..................................................................................................................... 4 I.3 Scope and Overview .................................................................................................................. 5 I.4 Organizational Chart.................................................................................................................. 6 I.5 Accounting System and Financial Reporting Role and Responsibilities .................................. 7 I.6 VIEDA Direct and Indirect Cost Allocation Methods .............................................................. 8 I.7 Goals, Objectives, Performance Measurements and Evaluation ............................................. 10 I.8 Annual Budget Process Overview ........................................................................................... 11 II. DEPARTMENTAL GOALS AND OBJECTIVES 1. VIEDA ADMINISTRATIVE UNIT ................................................................................... 124 1.1 Board of Directors ............................................................................................................. 14 1.2 Executive Office................................................................................................................. 17 1.3 Accounting and Finance ..................................................................................................... 20 1.4 Human Resources............................................................................................................... 23 1.5 Legal Department ............................................................................................................... 26 1.6 Marketing Division ............................................................................................................ 29 2. VIEDA OPERATIONAL DIVISIONS ................................................................................ 32 2.1 VI ECONOMIC DEVELOPMENT COMMISSION ........................................................ 32 2.1.1 Application Unit ........................................................................................................ 32 VI ECONOMIC DEVELOPMENT AUTHORITY FISCAL YEAR 2014 BUDGET October 1, 2013 – September 30, 2014 TABLE OF CONTENTS ii 2.1.2 Compliance Unit ....................................................................................................... 36 II. DEPARTMENTAL GOALS AND OBJECTIVES CONTINUED 2.2 Government Development Bank (GDB)/ Small Business Development Agency (SBDA)40 2.3 Enterprise Zone Commission ............................................................................................. 46 2.4 VI Industrial Park Development Corporation .................................................................... 50 III. FINANCIAL SECTION 3.1 Revenue................................................................................................................................... 52 3.2 Expenditure Comparison for Fiscal Year 2012, 2013 Projected and 2014 budgeted ............ 54 3.3 Professional Services ............................................................................................................. 55 3.4 Other Services and Charges – Detailed Listing ..................................................................... 56 3.5 Personnel Service Cost Breakdown by Department and Classification ................................. 57 3.6 VIEDA FY 2014 Budgeted Indirect Operating Cost .............................................................. 57 3.7 Budget Summary .................................................................................................................... 59 IV. OTHER INFORMATION 4. Other Information .................................................................................................................... 59 A. Vehicle Listing for VIEDA ................................................................................................. 60 B. Listing of Real Property being rented or leased by VIEDA ............................................... 60 V. APPENDIX Glossary of Terms ………………………………………………………………………...…….61 VI. FISCAL YEAR 2012 AUDITED FINANCIAL STATEMENT…………………………64 May 30, 2013 Honorable Clifford F. Graham Senator Chairman, Committee on Finance 30th Legislature of the Virgin Islands Capitol Building St. Thomas, VI 00804 Dear Senator Graham: It is my privilege to present the Virgin Islands Economic Development Authority’s (“VIEDA”) Fiscal Year 2014 Budget for your consideration and that of your honorable colleagues. Our budget request of $5,043,274 is consistent with the level of responsibility entrusted to the Authority, which serves as a beacon of hope for economic resurgence in the Territory. Economic development has many objectives. Most commonly, these include the creation ofjobs, wealth, and the improvement of the quality of life of our residents. The Authority is forging many partnerships with investors and entrepreneurs in the Territory, and with others both nationally and internationally as we focus on achieving the following objectives that began in FY 2013 and are continuing through FY 2014: • Creation of New Jobs — There is a direct link between job creation and the overall health of the local economy. However, jobs “created” should be those that can support the desired standard of living, those which offer stability and decent working conditions, and those which provide opportunities for advancement. Equally important, is the impact of job creation on increasing the tax base. • Generating Additional Government Revenues - The strategy is to attract a targeted mix of robust industry sectors that include Financial/Professional Services, Information Technology, eCommerce, Call Centers/Back Office, Light Manufacturing, Transshipment, and Energy. The economic significance is borne out through direct and induced tax revenues generated through the use of both financial and human capital. • Business Retention and Expansion — The emphasis is on the allocation of resources in maintaining the employment levels through outreach campaigns. Simply put, this customer- service mechanism provides constant feedback about private sector growth and development. Research has shown that most new jobs will come from existing businesses. Therefore, existing businesses are a component of our economic development efforts. We recognized that sustaining them is vital to a healthy economy. Economic Development Commission Enterprise Zone Commission Government Development Bank Industrial Park Development Corporation Small Business Development Agency ST. CROIX 116 King Street, Frederiksted, VI 00840 (340) 773-6499 FAX (340) 773-7701 ST. THOMAS 5055 Noire Dade, St. Thomas, VI 00802 (340) 714-1700 FAX (340) 715-2753 UNITED STATE’ VIRGIN !SISNDS Economic Development Authority WWW.USVIEDA.ORG 1 BDO 432-8784 Honorable Clifford F. Graham May 30, 2013 These objectives will be accomplished through our marketing initiatives and by partnering with other agencies to identify national and international investment leads while we continue to provide quality technical and financial support to local businesses. The funding request includes approximately $120,000, which is VIEDA’s Fiscal Year 2014 matching requirement for an incubator grant that was received in this fiscal year. This investment by both the federal and local governments provides technical assistance for the Incubator program, which focuses on small, midsized enterprises (SMEs) and emerging entrepreneurs who have significant growth potential. The VIEDA also is required to implement the Tax Increment Financing (TIF) law, the Hotel Development law, and, in conjunction with the Virgin Islands Department of Tourism, the Sustainable Tourism Through Arts-based Revenue Streams Act (STARS). Though no funding provisions were made to carry out these mandates, we believe that they greatly impact economic development and must be developed to the greatest extent possible. This budget, therefore, addresses those needs that bear a direct relationship to job creation and retention, which also provide a stable tax base. Balancing the budget is always a challenge, especially in tough economic times, but by working together we can make a difference in the lives of our residents. The VIEDA stands ready to work with you and with other members of the 30th Legislature to this end. My staff and I are available to answer questions or provide additional information that you or the Post Audit Division may have regarding this submission. Sincerely, ,27/ Percival E. Clouden ChiefExecutive Officer UNITED STAlES VIRGIN ISLANDS Economic Development Authority WWW.USVIE0A.ORG 1800 432-8784 VI Economic Development Authority – Fiscal Year 2014 Budget VI ECONOMIC DEVELOPMENT AUTHORITY FISCAL YEAR BEGINNING OCTOBER 1, 2014 Governing Board Board Member Position Albert Bryan Jr. Chairman Nathan Simmonds Vice Chairman Lynn Millin Maduro Secretary Jose Penn Member Henry Smith Member Randolph Allen Member Senior Management Team Percival E. Clouden, Chief Executive Officer Jennifer Nugent-Hill, Assistant Chief Executive Officer/Chief Operating Officer Ernest Halliday, Director, Administration & Finance Paul Arnold, Projects Coordinator Frederick Handleman, Director, Legislative and Legal Affairs Margarita Benjamin, Director, EDC, Applications Unit Stephanie Berry, Director, EDC, Compliance Unit Nadine Marchena Kean, Director, Enterprise Zone Commission Dianne Duinkerk, Director, Lending Division George St. Rose, Park Superintendent VI Economic Development Authority – Fiscal Year 2014 Budget I.1 Mission Statement The Virgin Islands Economic Development Authority is a semi- autonomous governmental agency responsible for the promotion and enhancement of economic development in the United States Virgin Islands. The VIEDA strives to foster positive public/private sector partnerships for the enhancement of economic growth and development. VI Economic Development Authority – Fiscal Year 2014 Budget I.2 Scope and Overview The Virgin Islands Economic Development Authority (VIEDA) was created on December 21, 2000 by Act No. 6390,Title 29, Chapter 17, Virgin Islands Code to assume, integrate and unify the functions of the Government Development Bank (GDB), the Economic Development Commission (EDC), the Industrial Park Development Corporation (IPDC), the Small Business Development Agency (SBDA) and the Enterprise Zone Commission (EZC) under one executive board in order to achieve maximum efficiency, streamline operations, and develop comprehensive programs to promote and enhance the economic development of the Territory. The VIEDA accomplishes its mission by (1) attracting multinational investors from the mainland to establish or relocate their businesses to the Virgin Islands, and (2) providing financial assistance through its lending arms (GDB and SBDA) to emerging and established businesses in the Territory. The VIEDA is funded primarily by allotments from the Office of Management and Budget via the Department of Finance based on an approved budget authorized by the Legislature of the Virgin Islands. The powers of the VIEDA are exercised by a Governing Board consisting of the members of the VIEDA acting as a board. Of the seven (7) members appointed to the Board, three (3) shall not be employees of the Government of the United States Virgin Islands or the Government of the United States and shall be appointed by the Governor with the advice and consent of the Legislature. Three (3) shall be appointed by the Governor from among the heads of Cabinet- level executive departments or agencies or his executive staff, and one (1) shall be appointed from the Board or executive staff of the Government Employees Retirement system, the Virgin Islands Port Authority, or the University of the Virgin Islands. VI Economic Development Authority – Fiscal Year 2014 Budget I.3 Organizational Chart VI Economic Development Authority – Fiscal Year 2014 Budget I.4 Accounting System and Financial Reporting Role and Responsibilities The Virgin Islands Economic Development Authority (VIEDA) is a component unit of the U.S. Virgin Islands Government and follows enterprise fund accounting and reporting. Therefore, the financial statements are presented in a manner similar to that of a private business, using the economic resources measurement focus and the accrual basis of accounting. Management prepares a plethora of financial and statistical reports, including the Financial Statement with Supplementary information (annual audit), and is responsible for the integrity and objectivity of management and financial reporting. Reports are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America, applying certain estimates and judgments, as required. The VIEDA employs internal controls that are designed to provide reasonable assurance as to the integrity and reliability of financial reporting and to adequately safeguard, verify, and maintain accountability of assets. Such controls are based on established written policies and procedures and are implemented by trained, skilled personnel. The VIEDA’s employment policy prescribes that VIEDA and all of its employees maintain the highest ethical standards and that its business practices be conducted in a manner that is above reproach. The VIEDA engages the services of outside auditors to perform an annual independent audit of its financial statements. The objective of an audit is to express an opinion on the financial statements in accordance with Generally Accepted Accounting Principles (GAAP). In the independent auditors’ opinion, the financial statements for fiscal years 2010, 2011, and 2012 presented fairly the financial position of the VIEDA. The auditors, accordingly, have issued “Unqualified Opinions” for all three years. The VIEDA Board of Directors formulates the vision and fulfills its responsibility for oversight and administration of the Authority’s practices and governance through actions of the full Board as well as through its committees. The Board’s Finance Committee is responsible for reviewing the annual budgets, making recommendations, and advising the full Board on major financial issues and decisions. VI Economic Development Authority – Fiscal Year 2014 Budget I.5 VIEDA Direct and Indirect Cost Allocation Methods The VIEDA activities are classified into two categories – operational and administrative, and all expenses of the Authority are attributed to the Operation Units and Administrative Units either as direct or indirect costs. A direct cost is a cost that can be identified specifically with a Unit and can be traced directly with relative ease and a high degree of accuracy. An indirect cost, on the other hand, is a cost that is incurred in common with other Units and cannot be traced to any specific Unit. Those costs, therefore, are distributed to both the Operational and Administrative Units through an internal allocation process or indirect cost rate. An Operational Unit is a division within the VIEDA whose responsibility it is to carry out organizational mandates. These Operation Units include: the Small Business Development Agency (SBDA) and the Government Development Bank (GDB) – which make up the Lending Division; the Applications and Compliance Units, which make up the Economic Development Commission (EDC) Division; and the Enterprise Zone Commission EZC) Division. An Administrative Unit is a department within the VIEDA that provides support to the Operational Units in fulfilling their mandates. The administrative departments are the VIEDA Board of Directors, Executive Office, Accounting and Finance, Human Resources (HR), Legal, and Marketing. All indirect costs are budgeted and expensed in a temporary department within the administrative grouping referred to as Economic Development Management (EDM). At the end of each quarter, the indirect costs that were accumulated in the EDM department are allocated to all operational and administrative Units based on a pre-determined rate. At the end of a fiscal period when all direct costs are posted and all indirect costs are allocated from the EDM department, each operational and administrative unit will be able to determine its total operating cost. The total direct and indirect costs for each administrative unit are considered an indirect cost to the operational units and, thus, must be allocated to the operational units using a pre-determined allocation method. The method of cost identification and allocation supports the need to set goals and objectives to establish a basis for the budget, develop performance standards, and perform the necessary evaluations to ensure that resources are used in the most efficient manner. VI Economic Development Authority – Fiscal Year 2014 Budget VI Economic Development Authority – Fiscal Year 2014 Budget I.6 Goals, Objectives, Performance Measurement, and Performance Evaluation Goals, objectives, performance measurement, and performance evaluation establish the strategic framework for the Authority’s economic development plan. A goal is the end result to be accomplished, and answers the question, “what is the big picture purpose? For the VIEDA, it is the creation of new jobs to improve the standard of living for residents and the expansion of the tax base of the government. Objectives are the action steps that must be taken to carry out the big picture and set benchmarks to measure performance. The fundamental characteristics of an objective are that, it must be:  Measureable  Identify the target of program activity  Set a timeframe for completion  Provide an expected direction of change. Performance measurement is the ongoing monitoring and reporting on program accomplishments compared to the pre-established goals and objectives as outlined by each Unit. The basic ingredients of a performance measure include:  Objectivity  Relevance  Ability to indicate degree of success  Reliability  Validity We recognize that the development of performance measurements requires careful thought and planning. Performance Evaluation becomes an even more important consideration in a period of scarce resources, and provides a means of assessing how well a Unit is performing, and answers questions such as: 1) Are stakeholders getting what they deserve? 2) Are taxpayers getting their money’s worth? 3) Are those we serve better off? 4) Can the service we provide be improved? The achievability of the VIEDA goals and objectives rests with supervisors and their subordinates, and the budget provides the financial resources to do so. Most importantly, however, is the carrying out of the measurement and evaluation functions in ensuring that scarce resources are used in the most efficient manner for the benefit of residents. VI Economic Development Authority – Fiscal Year 2014 Budget I.7 Annual Budget Process Overview The Virgin Islands Economic Development Authority’s budget formulation process is designed to allow the Authority to fulfill its mission; align goals, priorities, and objectives with financial resources; and evaluate actual achievements relative to anticipated outcomes. December - January The budget formulation process begins with the development of revenue and expenditure projections for the upcoming fiscal year. These projections are presented to the VIEDA Governing Board’s Finance Committee with a comparison and analysis of past trends (i.e. appropriation, allotment and expenditure levels) in addition to other financial data to justify and support its budget recommendation. During this period, the VIEDA Governing Board outlines the priorities, goals and objectives of the Authority for the upcoming fiscal year. This forms the basis for the development of the budget and determines the final budget amount to be submitted to the Office of Management for inclusion in the Government’s annual operating budget. February The budget staff establishes budget ceilings for each division and department consistent with the priorities, goals, and objectives as outlined by the EDA Governing Board. This information is communicated to each division or department head through a budget call that provides instruction and guidance on preparing the budget. The budget staff conducts budget orientation sessions with lead members of each division and department, in order to provide an overview of the budgeting process and to address budgetary concerns. March - April The budget staff holds budget review discussions with all departments to discuss areas of concern, goals, and new initiatives, or programs the departments desire to implement. At this forum, each division and department is provided the opportunity to justify its needs before the Chief Executive Officer and Assistant Chief Executive Officer. After discussions, revisions are made and the budget schedules are updated accordingly. The budget is presented to the EDA Governing Board for consideration and final approval before submission to the Legislature’s Post Audit Division. April – June Communication is maintained with the Post Audit Division in its analysis of the budget while the budget staff researches and gathers data, including conducting round-table sessions with department and division heads before crafting the final draft of the CEO’s budget message. VI Economic Development Authority – Fiscal Year 2014 Budget Annual Budget Process Overview continued August The Chief Executive Officer accompanied by the Assistant Chief Executive Officer and the Director of Administration and Finance defends the budget recommendation before the Finance Committee of the Legislature. October - September Commencing with its adoption, the budget, on a line-by-line basis, is entered into the VIEDA’s fully computerized accounting reporting system. This system monitors all the Authority’s expenditures during the year, allowing for expenditure to be controlled within the limits established in the budget. This system also summarizes the year-to-date performance of each department relative to the budget. Each month actual results are compared and analyzed against the budget to ensure that resources are managed in accordance with the budget plan and consistent with the goals and objectives of the organization. On a quarterly basis, financial reports are presented to the Finance Committee of the EDA Governing Board detailing the source and use of funds compared to the budget and also compared to the same period in the previous fiscal year. The budget staff offers recommendations for policy review, when necessary, to improve financial integrity and efficiency. VI Economic Development Authority – Fiscal Year 2014 Budget Jan/Feb EDA Governing Board outlined performance goals and objectives for FY 2014. January 18-19, 2013 Budget orientation conducted by budget staff. Feburary 12, 2013 March Budget call issued to division heads. March 1, 2013 Budget request submitted to the Office of Management and Budget. March 12, 2013 April Internal budget review with executive team, department heads, and budget staff. April 8-9th, 2013 Presentation of proposed FY 2014 Budget to EDA Finance Committee. April 12, 2013 EDA Governing Board approved FY 2014 Budget. April 19, 2013 May/June FY 2014 budget submitted to the Post Audit Division. June 7, 2013 July Legislative Budget hearing. July 25, 2013 Annual Budget Process Overview continued Budget Calendar Below is a summary of the activities in development the FY 2014 Budget. VI Economic Development Authority – Fiscal Year 2014 Budget VIEDA ADMINISTRATIVE UNIT The administrative departments within the VIEDA provide support to the operational divisions in ensuring that the VIEDA adheres to and meets statutory and legal requirements. 1.1 BOARD OF DIRECTORS Functional Statement The powers of the VIEDA rest in the hands of a Governing Board, which sets the vision and acts on behalf of the organization. The Board is responsible for establishing all operating policies, hiring a Chief Executive Officer (CEO) who assumes operational responsibilities, approving all major contracts, overseeing overall policy decisions, providing oversight, and, most importantly, ensuring that the organization complies with all applicable law. Operational Goal(s) Collaborate with management in exploring opportunities for the VIEDA and to play a vital role in helping management understand the implications of and adapt to the changing global environment. Fiscal Year 2013 Objectives  Participate in Professional Development training (Best Practices in Board Governance)  Develop policy of various Strategic Financial Tools  Participate in Economic Development Trade Missions  Conduct hearings and decision meetings bimonthly  Select external auditors for next three years  Review and approve annual operating budget  Review 3-,6-, 9- and 12-month financial performance with budget and prior year expenditures  Conduct performance review of Chief Executive Officer and Board self-assessment  Hold collaborative sessions with other State EDAs Fiscal Year 2013 Accomplishments as of March 31, 2013  Held 14 board and decision meetings  Conducted 7 public hearings  Strategic planning retreat held January 2013  Attended International Economic Development Council (IEDC) training seminars  Reviewed and approved the FY 2014 budget proposal VI Economic Development Authority – Fiscal Year 2014 Budget Fiscal Year 2014 Objectives  Participate in Marketing Events and Activities  Participate in Professional Development Training (Best Practices in Board Governance)  Develop policies towards the implementation of various strategic financing tools (i.e. U.S. Government’s Employment Based (EB-5) program, New Market Tax Credit program, Tax Increment Financing Expansion, Hotel Development Act)  Review and approve annual operating budget  Review and evaluate 3-, 6-, 9-, and 12- month financial performances  Conduct performance review of Chief Executive Officer and Board Assessment Key Performance Indicators (KPI) Performance Measures Planned FY 2014 Number of Board Meetings 28 Number of Policies to be Reviewed and/or Developed 10 Approval Date of Annual Budget 3/2014 Date of CEO Performance Evaluation 6/2014 VI Economic Development Authority – Fiscal Year 2014 Budget $30,000 $39,000 $73,430 $77,139 FY 2013 Budget FY 2014 Budget Proposal Board of Directors Budget Comparison FY 2013 versus FY 2014 Salary Expense Operating Expense FY 2013 FY 2014 Budget Budget EXPENDITURES: Salaries 55,460 $ 25,052 $ 59,000 $ Fringe Benefits 17,970 6,246 18,139 Salary Expense 73,430 $ 31,298 $ 77,139 $ Catering - 1,672 1,000 Supplies - 1,498 2,000 Dues & Subscriptions 1,300 290 1,600 Employee Relations - 70 100 Postage & Delivery 100 - 100 Board Stipend 3,000 - 2,000 Meeting Space Rental - 900 800 Software Agreement - 2,388 2,400 Professional Development 12,400 15,104 20,000 Interisland Travel 12,000 1,817 6,000 Communication 1,200 1,058 3,000 Operating Expenses 30,000 $ 24,796 $ 39,000 $ TOTAL (DIRECT COST ONLY) 103,430 $ 56,094 $ 116,139 $ 10/1/12 - 3/31/13 Actual VI Economic Development Authority – Fiscal Year 2014 Budget 1.2 EXECUTIVE OFFICE Functional Statement The Chief Executive Officer (CEO) and the Assistant Chief Executive Officer (ACEO)/Chief Operating Officer (COO) provide overall leadership and direction in the planning, development, and administration of policies governing the operation of the VIEDA. This office ensures that responsibilities established by statute and policy directives are executed at the highest level. Operational Goal(s) Direct and monitor the activities of the VIEDA in a manner that ensures that the assets of the organization are safeguarded and optimized, and maintain a positive work climate that is conducive to attracting, retaining, and motivating a diverse group of top quality performers. Fiscal Year 2013 Objectives  Refine the alignment of the VIEDA structure to improve efficiency, effectiveness, and productivity  Implement greater utilization of modern technology to enhance management processes  Work with the Board of Directors and stakeholders to refocus strategic plan to shifting demands of the Virgin Islands Community  Develop and implement targeted strategic economic development opportunities with the University of the Virgin Islands, the VI Port Authority, the Department of Tourism, and the Public Finance Authority to create synergies through comprehensive public policies  Ensure the completion of the Comprehensive Economic Development Strategy Plan  Establish effective operational practices and processes in management of the VIEDA Fiscal Year 2013 Accomplishments as of March 31, 2013  Completed 75% of the build-out of new office space at Nisky Center  Participated in meetings with stakeholders, EDC beneficiaries and potential investors  Engaged in several outreach activities including appearances on radio talk shows  Attended IEDC training and seminars in economic development  Testified before Legislative committees on economic development Fiscal Year 2014 Objectives  Establish VIEDA as the premier driver of economic development and policy in the Territory  Concentrate recruitment efforts on designated services businesses, high value manufacturers, healthcare suppliers and EB5 candidates to catalyze business development opportunities  Ensure the completion of the Comprehensive Economic Development Strategy Plan VI Economic Development Authority – Fiscal Year 2014 Budget Fiscal Year 2014 Objectives continued  Support economic diversification initiatives in the Broadband, Maritime, Marine, and Shipping industries  Increase the VIEDA presence and visibility in the Virgin Islands Leadership Council  Present an economic development orientation program with key local stakeholders Key Performance Indicators (KPI) Performance Measures Planned FY 2014 Number of new industry partnerships to be formed 5 Number of existing partnership collaborations 7 Number of new initiatives to drive economic diversification 5 Number of legislative proposals to support economic development 5 VI Economic Development Authority – Fiscal Year 2014 Budget E x e c u t i v e O f f i c e FY 2013 Actual FY 2014 Budget 10/1/12 - 3/31/13 Budget EXPENDITURES: Salaries 437,660 $ 209,079 $ 555,263 $ Fringe Benefits 141,812 49,728 170,707 Salary Expense 579,472 258,807 725,970 Dues & Subscriptions 500 2,995 3,500 Employee Relations 500 1,335 500 Postage & Delivery 100 53 100 Professional Development 5,000 8,151 7,000 Tuition Reimbursement 2,400 - 2,400 Interisland Travel 5,750 3,602 7,500 Communication 2,400 5,370 8,000 Operating Expense 16,650 21,506 29,000 TOTAL (DIRECT COST ONLY) 596,122 $ 280,313 $ 754,970 $ $16,650 $29,000 $579,472 $725,970 FY 2013 Budget FY 2014 Budget Proposal Executive Office Budget Comparison FY 2013 versus FY 2014 Salary Expense Operating Expense VI Economic Development Authority – Fiscal Year 2014 Budget 1.3 ACCOUNTING AND FINANCE Functional Statement The accounting and finance unit provides financial planning, accounting, and reporting for the VIEDA. It is primarily responsible for relationships with auditors, financial institutions, the Post Audit Division of the Legislature, rating agencies, and others within the financial community. It provides leadership in developing proposals and policies on strategic issues that affect the VIEDA’s long-term financial integrity and competitiveness. The responsibility for the establishment of financial policies and procedures for organization-wide guidance and internal control falls within this unit. Operational Goal(s) Provide quality customer service to the VIEDA units and divisions while practicing responsible stewardship of VIEDA resources; and aspire to excellence in its financial and administrative practices, including the institution on measures to reduce costs and improve overall efficiency. Fiscal Year 2013 Objectives  Obtain Fiscal Year 2012 financial audit report by April 2013  Submit Fiscal Year 2013 budget to Post Audit by May 2013  Continue to structure unit and re-align job titles based on functions and work performed  Provide professional development training in management, budgeting, and accounting  Upgrade accounting and financial programs such as MAS 500 and ABRA  Provide financial management services to each division within the organization  Conduct divisional site visits to better understand needs and allocate financial resources Fiscal Year 2013 Accomplishments as of March 31, 2013  Completed VIEDA’s financial audit fieldwork  Supervised the build-out of EDA’s new office space at Nisky Center  Submitted Fiscal Year 2014 Budget to the Office of Management and Budget  Upgraded reporting functions by utilizing modules to track and record EDA’s fixed assets  Assisted in compliance and financial audits performed by the Office of the Inspector General  Provided professional development training for all accounting staff personnel  Continued to research replacement software for FRX, ABRA and Be Punctual Punch Fiscal Year 2014 Objectives  Obtain Fiscal Year 2013 financial audit report by February 2014  Prepare and submit Fiscal Year 2015 budget to the Post Audit Division by May 15, 2014  Upgrade financial reporting software to improve recording, reporting, and analytical functions VI Economic Development Authority – Fiscal Year 2014 Budget Fiscal Year 2014 Objectives continued  Identify and implement measures to reduce operating expenses by a minimum of 5%  Reconcile and close general ledgers by the 20th day of each month  Provide staff enrichment training in management, budgeting, and accounting Key Performance Indicators (KPI) Performance Measures Planned FY 2014 Percentage of instances General Ledger closed on schedule 85% Financial Audit Completion Date 3/2014 Date of Annual Budget Submission 5/2014 Number of Finance Committee Reports to be Presented 4 VI Economic Development Authority – Fiscal Year 2014 Budget Actual FY 2014 EXPENDITURES: Budget Salaries 286,690 127,252 298,370 Fringe Benefits 92,894 43,052 91,729 Salary Expense 379,584 $ 170,303 $ 390,099 $ Catering - 217 200 Dues & Subscriptions 500 172 300 Employee Relations 500 - 500 Postage & Delivery 600 10 500 Professional Development 6,000 9,684 13,300 Tuition Reimbursement 7,200 - 2,400 Professional Services 6,000 1,137 8,000 Interisland Travel - 2,450 Operating Expense 11,220 $ 27,650 $ TOTAL (DIRECT COST ONLY) 181,523 $ 417,749 $ FY 2013 10/1/12 - 3/31/13 1,000 21,800 $ 401,384 $ Budget $21,800 $27,650 $379,584 $390,100 FY 2013 Budget FY 2014 Budget Proposal Accounting and Finance Budget Comparison FY 2013 versus FY 2014 Salary Expense Operating Expense VI Economic Development Authority – Fiscal Year 2014 Budget 1.4 HUMAN RESOURCES Functional Statement The Human Resources (HR) Department is responsible for human capital management, workforce development and personnel operations services, which includes staffing/recruitment, position classification and management, benefits counseling, and employee relations. It is also responsible for providing a cost-effective and coordinated strategy for the delivery of training and employee development programs. Operational Goal(s) Provide an HR organizational framework to recruit, select, classify, compensate, develop and reward employees, and ensure an environment that optimizes productivity, efficiency and effectiveness. Fiscal Year 2013 Objectives  Update the HR policy manual within the first six months of fiscal year.  Implement and enforce a uniform and dress code policy by October 2012.  Institute programs to enhance employee development through supervisory, technical, professional, and competency training.  Continue to standardize HR management practices in the areas of hiring, retention, employee development, benefits, and compliance.  Enhance employee relations through employee recognition program, newsletters, quality of life programs, and special activities. Fiscal Year 2013 Accomplishments as of March 31, 2013  Updated the VIEDA Human Resources Policy manual  Coordinated employee uniform purchase with updated VIEDA uniform policy  Worked with the Division of Personnel in promoting the Health and Wellness and Employee Health Risk Assessment programs  Organized employee recognition events and participated in Public Service Recognition Week  Developed policies for employee time and attendance system Fiscal Year 2014 Objectives  Conclude desk audits for all union and classified positions and develop a grade and salary structure for the VIEDA by October 2013  Conduct annual sexual harassment training for all employees by June 2014 VI Economic Development Authority – Fiscal Year 2014 Budget Fiscal Year 2014 Objectives continued  Work with supervisors to ensure that all employee evaluations are completed by June 2014  Develop self-awareness, self-care, and other programs to improve employee wellness and productivity  Research and recommend employee professional development training to improve leadership and team building skills, productivity, and workplace etiquette by January 2014 Key Performance Indicators (KPI) Performance Measures Planned FY 2014 Percentage of employee evaluations to be completed on schedule 80% Average time to complete each stated research recommendation 1.5 weeks Number of employee relations initiatives to be implemented 5 Date employee professional development recommendation to be submitted 10/2013 VI Economic Development Authority – Fiscal Year 2014 Budget FY 2013 FY 2014 EXPENDITURES: Budget Budget Salaries 141,395 $ 63,871 $ 60,420 $ Fringe Benefits 45,815 17,981 18,575 Salary Expense 187,210 81,852 $ 78,995 Advertising & Promotion 4,000 550 4,000 Dues & Subscriptions 500 - 500 Employee Relations 15,000 10,080 18,000 Postage & Delivery 100 - 100 Professional Development 26,250 4,547 20,000 Interisland Travel 3,775 - 750 Communication 1,200 1,183 - Operating Expense 50,825 16,360 43,350 TOTAL (DIRECT COST ONLY) 238,035 $ 98,212 $ 122,345 $ 10/1/12 - 3/31/13 Actual $50,825 $43,350 $187,210 $78,995 FY 2013 Budget FY 2014 Budget Proposal Human Resources Budget Comparison FY 2013 versus FY 2014 Salary Expense Operating Expense VI Economic Development Authority – Fiscal Year 2014 Budget 1.5 LEGAL DEPARTMENT Functional Statement The legislative and policy department is responsible for providing legislative and policy services and advice to the VIEDA and its divisions. These include: policy guidance, litigation management, document preparation, and liaison to local and federal executive branch agencies and the Legislature. This department also drafts legislation, monitors legislative matters, drafts rules and regulations, and undertakes special projects. Operational Goal(s) Provide guidance on best practices, policies, and procedures; institute measures to prevent litigation; monitor the activities of the VIEDA to ensure compliance with applicable policies, regulations, and laws; and coordinate and assist the VIEDA and all its subsidiaries. Fiscal Year 2013 Objectives  Prepare draft rules and regulations for various legislative mandates which directly impact the VIEDA  Track proposed and approved legislative measures that may have a direct impact on the VIEDA  Work with the Office of the Governor towards approval of proposed EDC law changes  Work with the Office of the Governor towards approval of merger of GDB and SBDA  Manage the litigation or settlement of a substantial number of delinquent loans being carried by the GDB and the SBDA  Develop and implement a protocol for the review and approval of documents required by VIEDA divisions.  Provide staff training in critical areas such as Tax Increment Financing (TIF) , New market Tax Credit (NMTC) and other certification courses Fiscal Year 2013 Accomplishments as of March 31, 2013  Prepared draft rules and regulations for Hotel Development Law and STARS Act  Prepared proposed EDC, EZ/Commercial Zone, and GDB/SBDA law changes  Arranged litigation or settlement of delinquent loans being carried by the GDB and SBDA  Developed and implemented Outside Counsel Guidelines VI Economic Development Authority – Fiscal Year 2014 Budget Fiscal Year 2014 Objectives  Conduct background checks for all applicants for benefits and/or loans from any division of the EDA  Conduct background checks for the V.I. Department of Property & Procurement for proposed contractors on economic development projects.  Prepare rules and regulations for various legislative measures which directly impact the VIEDA  Track proposed and approved legislative measures that have a direct impact on the VIEDA  Litigate or settle a substantial number of delinquent loans carried by the GDB and SBDA Key Performance Indicators (KPI) Performance Measures Planned FY 2014 Number of rules and regulations to be prepared 3 Number of proposed and/or approved legislation to be tracked 12 Number of litigation filed or settlement agreements to be completed 40 Number of Standard Operating Procedures (SOP) to be reviewed or updated 6 VI Economic Development Authority – Fiscal Year 2014 Budget FY 2013 Actual FY 2014 EXPENDITURES: Budget Budget Salaries 282,100 $ 81,508 $ 195,000 $ Fringe Benefits 91,407 20,181 59,950 SALARY EXPENSE 373,507 $ 101,689 $ 254,950 $ Dues & Subscriptions 1,000 1,932 1,950 Employee Relations 500 90 500 Postage & Delivery 250 - 200 Professional Development 3,350 - 7,500 Professional Services 3,500 Interisland Travel 2,500 1,114 5,000 Communication 1,200 341 1,700 OPERATING EXPENSES 8,800 $ 3,477 $ 20,350 $ TOTAL (DIRECT COSTS ONLY) 382,307 $ 105,166 $ 275,300 $ 10/1/12 - 3/31/13 $8,800 $20,350 $373,507 $254,950 FY 2013 Budget FY 2014 Budget Proposal Legal Department Budget Comparison FY 2013 versus FY 2014 Salary Expense Operating Expense VI Economic Development Authority – Fiscal Year 2014 Budget 1.6 MARKETING DIVISION Functional Statement The Marketing Division’s key responsibility is to integrate the organization’s goals, strengths, competitive environment, target market, core messages, and products into one cohesive document known as the Marketing Strategy. As part of this strategy, the division develops a list of tactical approaches that enables the VIEDA to communicate its message to customers and prospective clients. Operational Goal(s) Promote the Territory as a destination for commerce and business on a national and international basis and enhance VIEDA’s position and image in the community by promoting its programs for economic growth and development. Fiscal Year 2013 Objectives  Identify targeted industries, association meetings and conferences for the upcoming year  Hire a Web design firm to update and modify the VIEDA website  Expand and enhance public relations efforts through various media  Conduct economic research studies in conjunction with the Bureau of Economic Research to improve the delivery and development of public policy  Develop and implement formulae to gauge, evaluate and improve marketing performance  Strategically place billboard advertisements in airport terminals to market the EDC program Fiscal Year 2013 Accomplishments as of March 31, 2013  Hired web design firm; launched new website  New Public Relations efforts implemented through TV show, “VIEDA Focus on Marketplace”  “Boots on the Ground” campaign implemented  Gained membership to the Danish-American Business Forum (DABF)  Two Hotels joined the EDC Program as a result of the Small Hotels Summit  Participated in the Southern Governors’ Association Annual Conference in Puerto Rico  Initiated the EDC Ambassador Program  Prepared case studies of five (5) EDC companies VI Economic Development Authority – Fiscal Year 2014 Budget Fiscal Year 2014 Objectives  Conduct two (2) national and two (2) international targeted events for the EDC program  Continue local public relations efforts with TV show, “VIEDA Focus on Marketplace”  Feature a monthly OP-ED article on VIEDA efforts in economic development  Publish all annual reports (VIEDA and EZC) by mandated deadlines  Complete a three (3) -year economic impact study of the EDC program  Identify and target qualifying companies in the high volume manufacturing industry  Increase project engagement by ten (10) percent  Track results of marketing events and activities Key Performance Indicators Performance Measures Planned FY 2014 Number of targeted marketing events to be held and/or attended 4 Number of qualifying companies to be identified in targeted industries 10 Number of Territorial visits planned by potential EDC beneficiaries 6 Number of investment successes 5 VI Economic Development Authority – Fiscal Year 2014 Budget FY 2013 Actual FY 2014 EXPENDITURE: Budgeted 10/1/12 - 3/31/13 Budgeted Advertising & Promotion 65,000 $ 50,469 $ 200,000 $ Consulting 335,000 147,432 350,000 Total (Direct Cost Only) 400,000 $ 197,901 $ 550,000 $ $65,000 $200,000 $335,000 $350,000 FY 2013 Budget FY 2014 Budget Proposal Marketing Department Budget Comparison FY 2013 versus FY 2014 Consulting Advertising & Promotion VI Economic Development Authority – Fiscal Year 2014 Budget 2. VIEDA OPERATIONAL DIVISIONS 2.1 VI ECONOMIC DEVELOPMENT COMMISSION Functional Statement The Economic Development Commission (EDC) is charged with promoting the growth, development, and diversification of the economy of the United States Virgin Islands by developing the human and economic resources of the Territory, preserving job opportunities for residents of the U.S. Virgin Islands, and promoting capital formation to support industrial development in the Territory. The EDC is comprised of the Applications Unit, which is the first point of contact by a business seeking to apply for economic development benefits, and the Compliance Unit, which monitors beneficiaries to ensure that they comply with the terms and conditions of their certificates and other requirements of law. 2.1.1 Applications Unit Operational Goal(s) Promote capital investment opportunities to support economic development. Fiscal Year 2013 Objectives  Update software with Cost-benefit Model information to create transparency in application and selection process  Finalize revisions to online application phase II to incorporate queries and tracking components  Reassess internal processes and implement changes to allow for improved tracking, follow up and processing time from receipt of applications for benefits to decision by EDC  Continue to facilitate timely processing of “complete” applications for consideration reducing the number of pending applications  Continue to work closely with the Marketing Division to actively recruit new applicants Fiscal Year 2013 Accomplishments as of March 31, 2013  Presented fourteen (14) applications to EDC Governing Board for consideration for favorable recommendation of benefits  Courted nineteen (19) prospective applicants, two of which have filed applications  Streamlined standard operating procedure to allow for Board Decision within 60 days  Received seven (7) applications, twelve (12) petitions and heard nine (9) public hearing cases  Participated in two (2) task force meetings and conducted two (2) workshops for the Virgin Islands Bureau of internal Revenue VI Economic Development Authority – Fiscal Year 2014 Budget Fiscal Year 2014 Objectives  Approve 25 new applications into the EDC program.  Research an electronic document management system  Host an Economic Development Commission Work Fair  Encourage approved applicants to activate benefits within the fiscal year.  Enhance and streamline the online application to be industry specific and user friendly  Prepare quarterly report that shows actual EDC generated tax revenues to the Virgin Islands Government Key Performance Indicators (KPI) Performance Measures Planned FY 2014 Number of New Applications 25 Number of Potential Job Opportunities 250 Approximate Wages of New Applications $5.2M Minimum Investment of New Applications $2.5M VI Economic Development Authority – Fiscal Year 2014 Budget 48 236 256 131 FY 2010 FY 2011 FY 2012 FY 2013 (as of 3/31/13) Number of Job Opportunities (based on EDC Applications) Economic Development Commission Graphical Depiction of Statistical Data Applications Unit 9 2 0 6 20 11 7 7 23 11 1 12 7 1 6 0 Applications Received Applications Approved Applications Tabled/Denied Applications Pending Applications FY 2010 FY 2011 FY 2012 FY 2013 (as of 3/31/13) $1,576,379 $6,517,410 $6,644,562 $1,643,596 FY 2010 FY 2011 FY 2012 FY 2013 (as of 3/31/13) Approximate Potential Wages of EDC Applications $9,325,000 $93,076,000 $46,946,884 $462,500 FY 2010 FY 2011 FY 2012 FY 2013 (as of 3/31/13) Minimum Potential Investment of EDC Applications VI Economic Development Authority – Fiscal Year 2014 Budget FY 2013 FY 2014 EXPENDITURES: Budget Budget Salaries 165,023 83,410 183,557 Fringe Benefits 53,471 29,989 56,432 Salary Expense 218,494 $ 113,399 $ 239,989 $ Advertising & Promotion 6,000 4,747 6,000 Dues & Subscriptions 400 - 400 Employee Relations 500 - 500 Postage & Delivery 500 - 500 Printing & Publication - - 2,500 Professional Development 6,000 2,854 7,500 Tuition Reimbusement 4,800 - - Professional Services 18,000 70,482 18,000 Office Supplies - 180 850 Interisland Travel 7,500 457 7,500 Communication - 177 500 Operating Expense 43,700 $ 78,897 $ 44,250 $ Total (Direct Cost Only) 262,194 $ 192,296 $ 284,239 $ 10/1/12 - 3/31/13 Actual $55,700 $44,250 $218,494 $239,989 FY 2013 Budget FY 2014 Budget Proposal Application Unit Budget Comparison FY 2013 versus FY 2014 Salary Expense Operating Expense VI Economic Development Authority – Fiscal Year 2014 Budget COMPLIANCE UNIT Functional Statement The Compliance Unit ensures the integrity of the Economic Development Program and assists the beneficiaries in meeting the requirements outlined in their certificates. The Compliance Unit reports its finding to the EDC Commission which has the legal authority to assess fines for non- compliance. The funds derived from such penalties are used for workforce development and training programs within the Territory. Operational Goal(s) Ensure that beneficiaries adhere to the requirements of the EDC Program. Fiscal Year 2013 Objectives  Finalize enhancement of electronic Cost Benefit Analysis application and internal reporting on Impact Analysis  Implementation of electronic compliance case management system  Implement online compliance reporting system  Increase compliance review audits and site visits to an acceptable level  Review and update compliance audit procedures and processes to include the new quality assurance standards  Conduct Annual Compliance, Eligible Supplier, Consultant seminars/forums, and other public forums Fiscal Year 2013 Objectives as of March 31, 2013  Completed six (6) annual compliance reviews  Conducted eight (8) compliance beneficiary orientations  Performed seventeen (17) outreach / beneficiary care site visits Fiscal Year 2014 Objectives  Conduct annual compliance seminar by March 2014 and four beneficiary consultant forums  Complete 20 compliance reviews and conduct 120 site visits by the end of the fiscal year  Implement concise standard operating procedures, to include quality assurance standards  Research an electronic compliance case management system with an online compliance reporting component by January 2014 VI Economic Development Authority – Fiscal Year 2014 Budget Key Performance Indicators (KPI) Performance Measures Planned FY 2014 Number of petitions to be approved 10 Number of certificate modifications to be completed 6 Number of Non-Compliance matters to be resolved 15 Number of outreach/beneficiary care visits planned 120 VI Economic Development Authority – Fiscal Year 2014 Budget 23 17 11 21 14 8 13 5 15 5 6 Petitions Orientations Compliance Reviews Compliance Activity FY 2010 FY 2011 FY 2012 FY 2013 (as of 3/31/13) Economic Development Commission Graphical Depiction of Statistical Data Compliance Unit VI Economic Development Authority – Fiscal Year 2014 Budget FY 2014 EXPENDITURES: Budgeted Salaries 320,908 $ 161,532 $ 341,391 $ Fringe Benefits 103,982 56,716 104,955 Salary Expense 424,890 $ 218,248 $ 446,346 $ Advertising & Promotion 28,000 4,977 35,000 Capital Outlay - - - Contractual Labor 20,000 - 20,000 Dues & Subscriptions 3,600 - 3,600 Employee Relations 500 - 1,200 Postage & Delivery 500 - 500 Printing & Publication 3,000 - 3,000 Professional Development 9,000 1,535 21,000 Tuition Reimbursement 7,200 - 4,800 Professional Services 19,000 - 50,000 Interisland Travel 6,500 881 7,500 Communication - 162 500 Operating Expenses 97,300 $ 7,555 $ 147,100 $ TOTAL (DIRECT COST ONLY) 522,190 $ 225,803 $ 593,446 $ Actual 10/1/12 - 3/31/13 FY 2013 Budgeted $97,300 $147,100 $424,890 $446,346 FY 2013 Budget FY 2014 Budget Propsal Compliance Unit Budget Comparison FY 2013 versus FY 2014 Salary Expense Operating Expense VI Economic Development Authority – Fiscal Year 2014 Budget GOVERNMENT DEVELOPMENT BANK (GDB)/SMALL BUSINESS DEVELOPMENT AGENCY (SBDA) Functional Statement The Government Development Bank (GDB) was created by legislation in 1978 “to aid the insular government in the performance of its duties to develop the economies of the United States Virgin Islands”. The GDB became functional in 1997 and since then has been providing access to capital for small and medium-sized businesses in the Territory. In 2000, the legislation that created the VIEDA placed the GDB within its purview. The GDB currently manages three (3) programs in its lending portfolio: The Intermediary Revolving Program (IRP), the Micro Loan Program, and the PFA Economic Development Fund. The Small Business Development Agency (SBDA) provides access to capital for small and medium-sized businesses in the Territory. It currently manages five (5) loan programs in its lending portfolio: Farmers and Fishermen Loan Program, Small Business Development Agency Direct Loan Program, Economic Development Administration Loan Program 3801 and the Economic Development Administration Loan Program 3804 (both components of the United States Economic Development Administration), and the Frederiksted Loan Program. The SBDA and the GDB presently operate as independent entities. Management is seeking legislation to merge the SBDA with the GDB to improve operating efficiency in the Lending Division. Operational Goal(s) Assist small and medium-sized businesses to access capital by providing financial resources and technical and managerial assistance to ensure continued viability, thus, facilitating employment growth and opportunities. Fiscal Year 2013 Objectives  Propose legislation to merge GDB and SBDA into one banking unit under the Lending Division  Reduce the total loan portfolio delinquency rate to less than 25% by utilizing various collection methods and initiatives  Increase available sources of lending funds through the U.S. Department of Commerce, U.S. Department of Agriculture and U.S. Small Business Administration  Network with government agencies and businesses to promote loan programs through a series of workshops and both print and electronic media  Partner with local banks to aggressively market the SSBCI Loan Program through their branches and the media  Implement an online loan application process to facilitate customer convenience VI Economic Development Authority – Fiscal Year 2014 Budget Fiscal Year 2013 Objectives continued  Update web page in a timely manner with current loan product information  Provide specialized professional development training for staff  Use Flex- rate and Scheduler modules for flexible payments schedules on revolving and term loans Fiscal Year 2013 Accomplishments as of March 31, 2013  Awarded a $1M grant from the U.S. Department of Commerce to establish an Incubator Program  Worked with financial institutions in providing loan guarantees to borrowers  Revised collection procedures for borrowers to improve collections  Promoted loan products and services through an aggressive marketing campaign Fiscal Year 2014 Objectives  Reduce the delinquency rate by 25% through aggressive collection efforts  Increase the loan portfolio by 30% or $2M with credit quality loans  Apply to the Small Business Administration for a $750,000 relending loan by January 2014  Review and update files with loans of $100,000 or more by September 2014  Provide staff enrichment training on lending software and industry best practices Key Performance Indicators (KPI) Performance Measures Planned FY 2014 Loan delinquency rate 55% Number of site/customer care visits 144 Number of clients to be assisted with Development Business Plans 30 Number of Educational/Outreach programs planned 16 VI Economic Development Authority – Fiscal Year 2014 Budget $60,814 $43,858 $0 $0 $534,981 $486,543 $538,671 $532,561 $595,795 $530,401 $538,671 $532,561 FY 2010 FY 2011 FY 2012 FY 2013 (as of 3/31/13) Intermediary Relending Program Current versus Delinquent Loans ($ Value) $ Value of Current Loan Portfolio $ Value of Delinquent Loans Total $ Value of Loan Portfolio Virgin Island Economic Development Authority Graphical Depiction of Statistical Data Lending Division $848,925 $734,987 $598,831 $562,839 $5,863,621 $5,382,916 $5,436,104 $5,487,519 6,712,546 6,117,903 6,034,935 6,050,358 FY 2010 FY 2011 FY 2012 FY 2013 (as of Mar. 31, 2013) Small Business Development Agency Current versus Delinquent ($ Value of Loans) FY 2010 - FY 2013 $ Value of Delinquent Loans $ Value of Current Loan Portfolio VI Economic Development Authority – Fiscal Year 2014 Budget $1,177,215 $1,838,573 $2,288,016 $1,896,048 $2,633,729 $3,213,571 $4,285,028 $4,571,339 3,810,944 5,052,144 6,573,044 6,467,387 FY 2010 FY 2011 FY 2012 FY 2013 (as of Mar. 31, 2013) Government Development Bank Current versus Delinquent ($ Value of Loans) FY 2010 - FY 2013 $ Value of Delinquent Loans $ Value of Current Loan Portfolio 262 247 244 247 121 127 100 153 19 23 22 22 51 48 83 26 281 270 266 269 172 175 183 179 FY 10 FY 11 FY 12 FY 13 ( 3/31/13) FY 10 FY 11 FY 12 FY 13 ( 3/31/13) SBDA GDB GDB and SBDA Loan Portfolio Current versus Delinquent Loans (#) No. of Delinquent Loans No. of Current Loans VI Economic Development Authority – Fiscal Year 2014 Budget 87% 88% 90% 91% 69% 64% 65% 71% 81% 77% 77% 80% FY 10 FY 11 FY 12 FY 13 ( 3/31/13) FY 10 FY 11 FY 12 FY 13 ( 3/31/13) FY 10 FY 11 FY 12 FY 13 ( 3/31/13) SBDA GDB GDB & SBDA GDB and SBDA Loan Portfolio Delinquency Rate (%) VI Economic Development Authority – Fiscal Year 2014 Budget FY 2013 Actual FY 2014 EXPENDITURES: Budget 10/1/12 - 3/31/13 Budget Salary 405,192 $ 240,288 $ 475,453 $ Fringe Benefits 131,292 70,435 146,170 Salary Expense 536,484 310,723 621,623 Advertising & Promotion 11,000 3,101 6,000 Catering - - 125 Casual Labor - 8,762 12,000 Courier Service 8,400 3,850 4,500 Dues & Subscriptions 25 500 Employee Relations 500 - 500 Postage & Delivery 2,000 - 2,000 Printing & Publication 2,000 - 2,000 Professional Development 6,000 - 6,000 Tuition Reimbursment 4,800 - 4,800 Professional Services 41,000 33,965 41,000 Office Supplies 500 250 500 Software Agreement 5,300 - 5,300 Interisland Travel 4,800 380 4,800 Communication 141 500 Operating Expense 86,300 50,474 90,525 TOTAL (DIRECT COST ONLY) 622,784 $ 361,197 $ 712,148 $ $86,300 $90,525 $536,484 $621,623 FY 2013 Budget FY 2014 Budget Proposal Lending Division Budget Comparison FY 2013 versus FY 2014 Salary Expense Operating Expense VI Economic Development Authority – Fiscal Year 2014 Budget 2.3 ENTERPRISE ZONE COMMISSION Functional Statement The Enterprise Zone Commission (EZC) was created by the Legislature of the United States Virgin Islands with the passage of Act No. 6294. The Act mandates the revitalization of designated blighted and severely distressed areas in the U.S. Virgin Islands that were once socially and economically vibrant communities. The legislation provides for tax incentives and economic development program benefits free and clear of regulations which inhibit economic growth. The Act encourages collaboration between public, private, and non-profit entities and provides a program of tax incentives and other benefits to support economic growth. Operational Goal(s) Promote growth including business expansion opportunity through public/private partnerships in an effort to create jobs, sustain community self-sufficiency and involvement. Fiscal Year 2013 Objectives  Pursue larger financial assistance (i.e. grants, new market tax credits, etc.) to rehabilitate the Zones  Service approximately 50 residents and be in compliance with grant donor requirements  Close out the following existing grants: Scrape, Paint & Rejuvenate, Board up, Youth to Work, Safety, and Walking Tour  Create approximately 150 new permanent and temporary jobs through diversified product offerings, such as attracting home grown and service-oriented businesses within the enterprise zones  Provide benefit packages to approximately 12 applicants so that they can revitalize their buildings in the enterprise zones  Improve the image of the Enterprise Zone Commission by utilizing the media to disseminate information about its mission and programs.  Create and Implement town plans  Re-align staff and provide training opportunities to improve the operational efficiency of the Unit.  Implement rules and regulations for the Enterprise Zone Commercial Legislation Fiscal Year 2013 Accomplishments as of March 31, 2013  Submitted for the approval of the Governor the Frederiksted Town plan which has had favorable review from every sector of Frederiksted  Conducted the Charrette for Christiansted that attracted a significant cross section of the populace of Christiansted.  Completed the Board up program and closed out the grant VI Economic Development Authority – Fiscal Year 2014 Budget Fiscal Year 2013 Accomplishments as of March 31, 2013 continued  Crafted the Commercial Zone legislation for submission to the Board’s review and the Governor’s approval  Received eight (8) applications, four (4) of which have been approved. The approved applications represent investments totaling $717,356.  Provided EZC staff training. Fiscal Year 2014 Objectives  Seek financing for the Save A Building Program  Complete two Charrettes, one for Savanne and Downstreet and the other for Upstreet by March 2014  Implement components of Frederiksted, Garden Street, and Christiansted plans through the provision of grant financing  Implement community development tax programs (EZ Tax Credit, EZ Plan Program and Commercial Zone Benefits)  Provide an estate planning conference in each district to mitigate multiple ownership of buildings within the zones by May 2014  Maintain open lines of communication with stakeholders to educate on activities, programs, ideas, and challenges through radio and print media  Increase efficiency through staff enrichment and training  Conduct community programs such as open house activities to allow the community to learn about the EZ and other EDA programs Key Performance Indicators (KPI) Performance Measures Planned FY 2014 Number of financing institutions to be contacted for funding 5 Number of stakeholders care activities to be conducted 7 Number of community programs to be undertaken 6 Percentage of EZ clients to participate in community development tax programs 80% VI Economic Development Authority – Fiscal Year 2014 Budget 6 5 6 6 FY 2010 FY 2011 FY 2012 FY 2012 (as of 3/31/13) Number of Beneficiaries Virgin Island Economic Development Authority Graphical Depiction of Statistical Data Enterprise Zone Commission 1,828,150 431,000 782,300 541,000 FY 2010 FY 2011 FY 2012 FY 2013 (as of 3/31/13) Dollar Value of Committed Investments VI Economic Development Authority – Fiscal Year 2014 Budget FY 2013 Actual FY 2014 EXPENDITURES: Budget 10/1/12 - 3/31/13 Budget Salaries 210,462 $ 98,087 $ 199,357 $ Fringe Benefits 68,195 27,626 61,289 Salary Expense 278,657 $ 125,713 $ 260,646 $ Advertising & Promotion 2,000 2,170 6,000 Catering 3,500 - 5,100 Employee Relations 400 - 400 EZ Planned Charrettes 101 - 20,000 Meeting Space Rental - - 2,100 Printing & Publication 2,500 - 7,400 Professional Development 6,000 7,693 4,000 Professional Services 7,000 1,531 7,000 Interisland Travel 2,500 807 2,500 Communication - 177 500 Operating Expense 24,001 $ 12,378 $ 55,000 $ TOTAL (DIRECT COST ONLY) 302,658 $ 138,091 $ 315,646 $ $24,001 $55,000 $278,657 $260,646 FY 2013 Budget FY 2014 Budget Proposal Enterprise Zone Commission FY 2013 versus FY 2014 Budget Comparison Salary Expense Operating Expense VI Economic Development Authority – Fiscal Year 2014 Budget 2.4 VI Industrial Park Development Corporation Functional Statement The Industrial Park Development Corporation (IPDC) is chartered as a public corporation to acquire and operate industrial parks in the United States Virgin Islands and to complement activities of the Economic Development Commission (EDC). The IPCS does not receive any funding from Government appropriations and is self-supported by revenues generated from its tenants. Two Industrial Parks fall under the auspices of the Industrial Park Development Corporation. They are the William D. Roebuck Industrial Park in Frederiksted, St. Croix and the St. Thomas Industrial Park located in Contant. Presently, the IPDC facilities management team has the responsibility of maintaining all of VIEDA’s property, plant, and equipment. Operational Goal(s) Meet the present and future needs of business and industry by making space available for commercial use and maintaining property value through a systematic and long-term maintenance program. Fiscal Year 2013 Objectives  Increase tenant occupancy in the Industrial Parks by 90 percent  Improve rent receipts and reduce receivables by at least 45 percent  Continue to reduce energy consumption in the Frederiksted office building  Improve landscaping and general outlook of each Industrial Park  Maintain vehicles and buildings through a systematic maintenance schedule Fiscal Year 2013 Accomplishments as of March 31, 2013  Negotiated lease agreements with two (2) new tenants on St. Croix  Reduced outstanding rent receivables by 9 percent  Evicted two (2) delinquent tenants from the St. Thomas Industrial Park Fiscal Year 2014 Objectives  Reduce outstanding rent receivables by 30 percent  Increase tenant occupancy by 50 percent  Maintain and improve infrastructure to attract quality tenants VI Economic Development Authority – Fiscal Year 2014 Budget Key Performance Indicators (KPI) Performance Measures Planned FY 2014 Percentage reduction in accounts receivables 30% Number of new tenants 5 Dollar value of capital improvements/enhancements $50K Percentage of scheduled maintenance to be completed 95% 82,263 90,176 89,400 84,926 85,897 77,984 78,760 83,234 168,160 168,160 168,160 168,160 FY 2010 FY 2011 FY 2012 FY 2013 (as of 3/31/13) VI Industrial Park Development Corporation Occupany / Vacancy Rate (Square Footage) Both Islands Square Footage Occupied Square Footage Vacant 49% 47% 46% 51% 53% 54% 49% 51% VI Economic Development Authority – Fiscal Year 2014 Budget Projected Income Generated from Operational Activities Total Actual Actual Projected Projected Budgeted FY 2012 10/1/12-3/31/13 4/1-9/30/13 FY 2013 FY 2014 Interest Income Loan & Interest Bearing Accounts 119,818 $ 54,760 $ 50,000 $ 104,760 $ 95,000 $ Fees Loan Origination / Application Fees 29,124 48,761 35,000 83,761 50,000 Activation Fees (EDC) 6,000 13,500 10,000 23,500 20,000 Application Fees (EDC) 70,500 40,000 50,000 90,000 85,000 Compliance Fees (EDC) 283,760 349,278 77,261 426,539 400,000 Total Ordinary Income 509,202 $ 506,299 $ 172,261 $ 623,800 $ 650,000 $ Plus: Government Allotment 4,780,328 2,358,850 2,122,965 4,481,815 5,043,274 Total Operating Revenue 5,289,530 $ 2,865,149 $ 2,295,226 $ 5,105,615 $ 5,693,274 $ 3.0 FINANCIAL INFORMATION 3.1 REVENUE The Virgin Islands Economic Development Authority’s revenue budget is derived from three primary sources, namely government allotment received quarterly, interest earned on unrestricted loans and interest bearing accounts, and fees collected from operational activities. Activation, application and compliance fees received from EDC beneficiaries are deposited into the EDC Industrial Promotion Fund, and a transfer is authorized by the Board of Directors to supplement the general fund appropriation. Table 1: Revenue Comparisons for FY 2012, 2013 Projected and 2014Budgeted The graph below shows the Authority’s projected revenues for Fiscal Year 2014 from its operating revenues by revenue source. Table 1: Revenue Comparison for FY 2012, FY 2011 Projected and FY 2012 Budgeted Loan & Interest Bearing Accounts 15% Application Fees (Lending Division) 8% Activation Fees (EDC) 3% Application Fees (EDC) 13% Compliance Fees (EDC) 61% Fiscal Year 2014 Projected Revenues VI Economic Development Authority – Fiscal Year 2014 Budget $4,780,328 $5,011,038 $5,011,038 $4,717,700 $5,043,274 $4,780,328 $4,610,422 $4,685,592 $4,481,815 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 Request Appropriation and Allotment Comparisons Historical Data (FY 2010 - FY 2014) Appropriation Allotment (8%) ($400,883) (6%) ($300,662) (5%) ($235,885) VI Economic Development Authority – Fiscal Year 2014 Budget DEPARTMENT/AGENCY/OFFICE NAME: Actual Actual Expenditures Proj. Expenditures Total Proj. Expenditures PROJECTED Fiscal Period FY 2012 Oct. 1, 2012 - Mar. 31, 2013 Apr. 1, 2013 - Sept. 30, 2013 FY 2013 Budget 2014 PERSONNEL SERVICES CLASSIFIED EMPLOYEE SALARIES 1,129,009 673,696 674,000 1,347,696 1,334,012 UNCLASSIFIED EMPL. SALARIES 923,735 455,507 456,000 911,507 1,063,200 TEMP/PART TIME SALARIES - OVERTIME SALARIES 265 265 LUMP SUM PAYMENTS - NIGHT DIFFERENTIAL COMP - OTHER DIFFERENTIAL COMP - FEES & COMPENSATION NOC - HOLIDAY PAY - ALL OTHER - SUB-TOTAL 2,052,744 1,129,468 1,130,000 2,259,468 2,397,212 - CAPITAL OUTLAYS - MACHINIERY & EQUIPMENT 42,837 - - 23,688 106,463 VEHICLES - ALL OTHER - - SUB-TOTAL 42,837 - - 23,688 106,463 FRINGE BENEFITS EMPLOYER CONTR. RETIREMENT 315,640 146,359 146,900 293,259 311,638 F.I.C.A. 139,390 70,350 70,060 140,410 148,627 MEDICARE 20,367 16,570 16,498 33,068 34,999 HEALTH INSURANCE PREMIUM 186,485 102,064 113,000 215,064 239,721 WORKERS COMP. PREMIUMS 1,383 1,663 1,663 2,000 UNIFORM ALLOWANCE - - ALL OTHER 12,514 - - - SUB-TOTAL 675,780 337,007 346,458 683,465 736,985 - SUPPLIES - OFFICE SUPPLIES 71,102 26,751 35,000 61,751 70,000 OPERATING SUPPLIES - SMALL TOOLS/MINOR EQUIPMENT - ALL OTHER - - - - - SUB-TOTAL 71,102 26,751 35,000 61,751 70,000 - OTHER SERVICES & CHARGES - PROFESSIONAL SERVICES 610,179 447,358 221,642 669,000 740,700 COMMUNICATION 85,956 42,901 43,000 85,901 95,000 TRAVEL 168,140 39,095 50,000 89,095 92,300 TRANSPORTATION - NOT TRAVEL - ADVERTISING AND PROMOTION 87,151 77,404 66,582 143,986 262,000 PRINTING AND BINDING 6,596 482 8,000 8,482 22,900 INSURANCE 61,974 46,656 18,344 65,000 65,000 REPAIRS AND MAINTENANCE 68,175 87,494 40,000 127,494 75,000 RENTAL- LAND/BUILDING 260,284 137,084 110,000 247,084 216,064 RENTAL - MACHINES/EQUIPMENT - - - - TRAINING 44,920 38,787 40,248 79,035 108,000 SECURITY - - ALL OTHER 284,388 137,000 231,770 368,770 523,250 SUB-TOTAL 1,677,764 1,054,261 829,586 1,883,847 2,200,214 - UTILITY SERVICES - ELECTRICITY 155,889 101,710 98,000 199,710 180,000 WATER 2,435 300 500 800 2,400 SUB-TOTAL 158,325 102,010 98,500 200,510 182,400 - TOTAL EXPENSES 4,678,551 2,649,497 2,439,544 5,112,729 5,693,274 Appropriation/Allotment 4,685,592 2,358,850 2,122,965 4,481,815 5,043,274 EDA Revenue 600,000 448,800 175,000 623,800 650,000 Total Projected (Actual) Revenues 5,285,592 2,807,650 2,297,965 5,105,615 5,693,274 LEGISLATURE OF THE VIRGIN ISLANDS POST AUDIT DIVISION EXPENDITURES BY PRIME ACCOUNTS 3.2 Expenditure Comparison for Fiscal Year 2012, 2013 Projected and 2014 budgeted VI Economic Development Authority – Fiscal Year 2014 Budget 3.3 Professional Services Professional Services FY 2012 Actual FY 2013 Projected FY 2014 Budgeted Audit Fees 82,500 $ 80,000 70,000 $ Collection Agencies (Lending) 41,015 44,000 41,000 IT Services 141,379.69 100,000 88,200 Consulting 272,268 350,000 433,000 Credit Reports (Lending) 9,468 15,000 20,000 Legal Fees 34,748 50,000 53,500 Stenographer 32,005 30,000 35,000 Total 613,385 $ 669,000 $ 740,700 $ Audit Fees 11% Collection Agencies (Lending) 6% IT Services 12% Consulting (Marketing) 56% Credit Reports (Lending) 3% Legal Fees 7% Stenographer 5% Professional Services 2014 Budgeted Expenses VI Economic Development Authority – Fiscal Year 2014 Budget 3.4 Other Services and Charges – Detailed Listing Other Services & Charges Actual FY 2012 Projected FY 2013 Budgeted FY 2014 Auto Expense 21,299 35,000 30,000 Bank Charges & Other fees 3,907 4,500 5,000 Board Attendance Fee 4,350 2,000 2,000 Casual Labor 16,430 5,500 17,000 Catering Services 37,656 35,000 35,000 EZ Charette - - 20,000 Contractual Labor 19,809 40,000 35,000 Copier Machines (Maintenance) 11,886 32,000 35,000 Courier Services 9,365 13,000 10,900 Custodial Services 18,262 20,000 25,000 Donations & Contributions 27,515 50,000 25,000 Drinking Water 1,943 2,000 2,000 Dues and Subscription 18,502 25,000 22,350 Employee Relations 45,635 35,000 35,000 Finance Charges 283 350 250 Garbage Removal 2,907 5,000 1,500 Grant Match - - 120,000 Interest Expense IRP 5,032 5,133 5,200 License Fee & Permit 1,501 1,500 1,500 Meeting Space Rental 1,800 4,000 2,900 Miscellaneous 5,321 5,000 4,750 Parking 7,614 5,000 - Postage & Delivery 11,464 11,787 30,000 Software Agreement 8,703 22,000 25,000 Storage 3,207 10,000 16,000 Trucking Services 65 8,500 2,500 Tuition Reimbursement 11,959 15,000 14,400 Total 284,388 368,770 523,250 VI Economic Development Authority – Fiscal Year 2014 Budget EDA $1,258,555 EDA $1,269,105 EDA $1,197,454 EDC $539,497 EDC $485,931 EDC $524,948 EZ $223,896 EZ $210,463 EZ $199,357 LENDING $463,953 LENDING $405,192 LENDING $475,453 $2,485,901 $2,370,691 $2,397,212 FY 2012 FY 2013 FY 2014 Personnel Service Cost Budget Comparison FY 2012 - FY 2014 LENDING EZ EDC EDA 3.5 Personnel Service Cost Breakdown by Department and Classification Personnel Listing - All Positions Department Positions (#) Unclassified Amount Positions (#) Classified Amount Total Positions (#) Total Salary Amount EDA 8 674,000 11 523,454 19 1,197,454 EDC 2 160,000 7 364,948 9 524,948 EZ 1 90,000 3 109,357 4 199,357 LENDING 3 139,200 8 336,253 11 475,453 TOTAL 14 1,063,200 29 1,334,012 43 2,397,212 Position Classification VI Economic Development Authority – Fiscal Year 2014 Budget 3.6 VIEDA FY 2014 Budgeted Indirect Operating Cost VIED MANAGEMENT EXPENDITURES: Budget FY 2013 Budget FY 2014 Accounting 57,000 $ 70,000 $ Advertising & Promotion 16,300 5,000 Auto Expense 20,500 30,000 Bank Service Charges 3,250 5,000 Capital Outlay 37,368 100,063 Casual Labor - 15,000 Catering 21,500 28,624 Computer In. 73,200 88,200 Contract Labor 25,000 Contributions / Donation 25,000 25,000 Consulting 500 500 Courier Service 2,500 6,400 Copier Fees 17,500 17,500 Credit Reports 20,000 20,000 Custodial Services 16,000 25,000 Diesel 5,000 2,500 Drinking Water 3,700 2,000 Dues & Subscriptions 1,700 10,000 Employee Relations - 12,800 Fringe Benefits 10,290 Garbage Disposal 2,500 1,500 Guarantee FEE SBDA 250 250 Incubator Program - 120,000 Insurance 65,000 65,000 Interest Expense 3,000 3,000 Legal Fees 50,000 50,000 Licenses & Permits 500 1,500 Meeting Space Rental 2,500 - Miscellaneous 150 500 Mobile Telephone - 1,200 Office Supplies 65,000 65,000 Parking 10,000 - Pest Control Service 2,000 7,000 Postage & Delivery 11,846 25,000 Printing & Publication 7,500 12,000 Registration Fees 6,000 6,000 Rent 260,284 216,064 Repairs - Building & Maintenan 70,000 70,000 Salaries - 29,401 Software Agreement 16,700 20,000 Stenographer 29,000 30,000 Storage 5,000 16,000 Communication 90,000 80,300 Taxi Fare 200 200 Travel 99,925 50,000 Trucking Services 200 2,500 Utilities 224,000 180,000 Total Budgeted Indirect for the VIEDA 1,342,573 1,551,292 VI Economic Development Authority – Fiscal Year 2014 Budget 3.7 BUDGET SUMMARY  The Economic Development Authority’s Fiscal Year 2014 is $5,693,274.  Our projected revenues are $650,000, which is $26,200 or 4% more than Fiscal Year 2013.  The requested level of appropriation for Fiscal Year 2014 is $5,043,274. Lending 13% Applications 5% Compliance 10% Enterprise Zone 6% Legal 5% Human Resources 2% Accounting 7% Executive Office 13% Board 2% Marketing 10% EDM Cost 27% 2014 EDA Budgeted Expenses by Units 2014 EDA BUDGET ALLOCATION BY UNITS DIVISION/DEPARTMENT LENDING APP COMP EZ LEGAL HR ACCOUNTING EXECUTIVE OFFICE BOARD MARKETING EDM COST TOTAL NO. OF EMPLOYEES 11 3 6 4 3 1 5 8 1 0 1 43 PERSONAL SERVICE 475,453 183,557 341,391 199,357 195,000 60,420 298,370 555,263 59,000 29,401 2,397,212 FRINGE BENEFITS 146,170 56,432 104,955 61,289 59,950 18,575 91,729 170,707 18,139 - 9,039 736,985 TOTAL PERSONAL /FRINGE 621,623 239,988 446,347 260,646 254,950 78,995 390,100 725,970 77,139 38,440 3,134,197 OPERATING EXPENSES 90,525 44,250 147,100 55,000 20,350 43,350 27,650 29,000 39,000 550,000 1,512,852 2,559,077 CEILING LEVEL 712,148 $ 284,238 $ 593,447 $ 315,646 $ 275,300 $ 122,345 $ 417,750 $ 754,970 $ 116,139 $ 550,000 $ 1,551,292 $ 5,693,274 $ REVENUES: 2014 Appropriation Request 5,043,274 $ 2014 EDA generated Revenues 650,000 $ TOTAL PROJECTED REVENUES 5,693,274 $ VI Economic Development Authority – Fiscal Year 2014 Budget 4. Other Information A. Vehicle Listing for VIEDA Presently, EDA has ten (10) vehicles. Seven (7) were purchased with local funds and three (3) with Industrial Park Development Corporation funds. YEAR MAKE MODEL ASSIGNED USE SOURCE OF FUNDING ISLAND 2007 TOYOTA RAV4 ADMIN –VIEDA GENERAL FUND ST. CROIX 2007 TOYOTA RAV4 EXECUTIVE – VIEDA GENERAL FUND ST. CROIX 2002 HONDA CRV-LX ADMIN – VIEDA GENERAL FUND ST. CROIX 2005 CHEVROLET PICK UP ADMIN – VIEDA INDUSTRIAL PARK FUND ST. CROIX 2005 CHEVROLET TRAIL BLAZER EXECUTIVE – VIEDA INDUSTRIAL PARK FUNDS ST. CROIX 2007 TOYOTA RAV4 EXECUTIVE – VIEDA GENERAL FUND ST. THOMAS 2007 TOYOTA RAV4 EXECUTIVE – VIEDA GENERAL FUND ST. THOMAS 2007 FORD ESCAPE EXECUTIVE– VIEDA GENERAL FUND ST. THOMAS 2005 HONDA CRV-LX EXECUTIVE – VIEDA GENERAL FUND ST. THOMAS B. Listing of Real Property being rented or lease by VIEDA Physical Address Landlord Sq. Ft. Annual Rent Lease Terms Use of Lease Premises Nisky Shopping Center Second Floor, Suite 620 St. Thomas B & W Realty Investments, Ltd. 6,800 $166,600 5 Years Office Space 116 King Street F’sted, St. Croix VI Industrial Park Development Corp. 4,088 $49,464 Month to Month Office Space 18B-2 Lindberg Bay St. Thomas Crown Holding 2,000 $16,000 Month to Month Storage Space VI Economic Development Authority – Fiscal Year 2014 Budget GLOSSARY OF TERMS Selected terms include explanation and/or justification for budgetary terms in the Fiscal Year 2014 Budget AUTO EXPENSE includes amounts for gasoline, repairs, and maintenance of vehicles. BUDGET is a controlled plan to be used in implementing the mission and the objectives of the Authority. Its development should involve maximum participation, and therefore, the aims and objectives of the Authority should be reflected at each level. CAPITAL OUTLAY includes office equipment, furnishing, computers, software programs and upgrades. Generally, expenditures in this category cost more than $500 would not normally be purchased from materials and supplies. CASUAL LABOR is used to describe employees who perform a variety of activities and usually work for a limited amount of time per day or week on a part-time or temporary basis. COMMUNICATION includes local, long distance, cell phones and Digital Subscriber line (DSL) services. The number and use of cell phones have been curtailed and/or minimized. CUSTODIAL SERVICES provide customized cleaning such as carpets, which are specific and customized according to the needs of the organization DIRECT COSTS are those elements of cost which can be easily, obviously, and conveniently identified with specific programs or activities, as distinguished from those costs incurred for several different activities or programs and whose element are not readily identified with specific activities. EMPLOYEE RELATIONS involves maintaining employer-employee relationships that contribute to satisfactory productivity, motivation, and morale. EQUIPMENT RENTAL includes Xerox copiers – 2 on each island that are leased long-term. ESTIMATED INTEREST AND EXPENSE & PRINCIPAL PAYMENT are amounts paid in interest and principal on funds borrowed through the Intermediary Relending Program (IRP) administered by the Lending Division. FRINGE BENEFITS are budgeted at approximately 30% of gross salary and include employer contributions to the retirement system, F.I.C.A, health insurance premium, and uniform allowance. GUARANTEE FEES are charged to protect against credit-related losses in the lending portfolio. VI Economic Development Authority – Fiscal Year 2014 Budget GLOSSARY OF TERMS INSURANCE costs hedge against the risk of a contingent or uncertain loss. The budget covers, for example, personal injury, directors’ and officers’ liability, vehicles, Errors/ Omissions, and liability insurance. INDIRECT COSTS are those elements of cost necessary in the provision of a service, which are of such nature that they cannot be readily or accurately identified with the specific service. MISCELLANEOUS expenses are small incidental expenditures for which there are no classifications. These costs are difficult to predict but are necessary for day-to-day operations. PER DIEM is a nightly allowance for travel expenses that includes meals and other incidentals. Stipends for members of the Board of Directors are also budgeted in this account. PERSONNEL SERVICE COST covers current salaries for full-time and temporary employees. The budget includes the 8% necessary to restore salaries to the pre-reduction levels as authorized in Act No 7261, Section 3(f). POST OFFICE BOX Rental is used solely for the convenience of the Economic Development Commission and its beneficiaries. POSTAGE AND DELIVERY includes cost of stamps, air freight, and FedEx mailings. POSTAGE METER RENTAL cost is for the leasing of the automated stamp machine. PROFESSIONAL DEVELOPMENT includes costs for employee certifications and training throughout the organization. REGISTRATION FEES include funds expended for staff and board member re-certifications, training, and attendance at seminars and conferences. RENT is paid for office space on both St. Thomas and St. Croix. REPAIRS & MAINTENANCE (BUILDING & EQUIPMENT) involves fixing any sort of mechanical, plumbing or electrical device when it becomes inoperable or broken (repairs). It also includes performing routine actions, which keep the device in working order (scheduled maintenance) or prevent trouble from arising (preventative maintenance). SUPPLIES consist of office and fax paper, pens, pencils, letterheads, pens, pencils, and all other stationery items needed to prepare booklets and pamphlets to serve staff, clients, and Board. TRAINING is an integral component of staff development and is the backbone of a professional organization. TRAVEL costs are expenditures that employees incur in the course of business related travel. They include airfare, per diem, and accommodations. Off-island travel cost is mainly associated with marketing activities. VI Economic Development Authority – Fiscal Year 2014 Budget GLOSSARY OF TERMS UTILITIES include electricity and water. Budgeted amounts have been declining due to efforts in reducing energy consumption.