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U.S. VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY 2019 Annual Report October 2018 to September 2019 www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 1 MESSAGE FROM THE GOVERNOR U.S. Virgin Islands U.S. VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY Email: info@USVIEDA.org • Website: www.USVIEDA.org ST. THOMAS-ST. JOHN DISTRICT 8000 Nisky Shopping Center Suite 620, 2nd Floor St. Thomas, U.S. Virgin Islands 00802 Telephone: 340-714-1700 ST. CROIX DISTRICT 116 King St. Frederiksted St. Croix, U.S. Virgin Islands 00841 Telephone: 340-773-6499 As the U.S. Virgin Islands Economic Development Authority’s team continues to work in synergy with our economic devel- opment partners and across its four entities offering business tax incentives, low-interest loans for our local entrepreneurs, tax credits and exemptions for neighborhood revitalization, and affordable business spaces for lease, the U.S. Virgin Islands is in a significant position to be a destination for economic growth for businesses and the USVI community. Our economic development tax incentive program continues to expand opportunities for companies to relocate and invest in the USVI. And the impact of this program on our Territory could not be clearer than the findings of the 2019 Economic Impact Analysis Report of the U.S. Virgin Islands Economic Development Tax Incentive Program, which reflects more than $1.4 billion in Territory-wide economic output and the creation of more than 19K full-time equivalent jobs in the USVI during a three-year period from 2013-2015. Additionally, with a Strategic Alliance Memorandum established between the U.S. Small Business Administration and the USVIEDA, our local small businesses, especially our USVIEDA’s EDB clients, will have more access to information on the financial resources and technical assistance these agencies provide. With a 15 percent increase in small-business loan re- payments to the EDB over repayments made in FY 2018, our small-business clients are also on track to fully reinvest their earnings and accelerate business growth. Our challenge in FY 2020 will be to continue to accelerate strategic efforts to: 1. Attract the best companies for business investments that can increase revenues and employment opportunities. 2. Retain our current businesses. 3. Strengthen our economic infrastructure following the devastation of Hurricanes Irma and Maria in 2017. 4. Ensure that our small to medium-sized businesses access funding to keep their doors open. 5. Revitalize our distressed neighborhoods. 6. Collaborate with government and non-government entities through strong partnerships to provide financial and technical resources for our entrepreneurs. 7. Seek new talent to expand a new generation of entrepreneurs and leaders in government service. These are signif- cant parts of establishing a solid base for our economic success. With an infusion of new ideas, raw talent, and a broad spectrum of new service products and partnerships in our market- place, this can only provide a significant starting point of a necessary foundation for our economic success in the USVI. And the historical impact of our programs and services for economic development on our Territory serves as guidance for how we can move forward into the future. In my new capacity as Governor of the U.S. Virgin Islands, I extend my congratulations to the newly appointed mem- bers of the USVIEDA Board of Directors and my thanks and appreciation to the USVIEDA management and staff for their tireless work through the USVIEDA’s entities: the Economic Development Commission, Economic Development Bank, Enterprise Zone Commission, and the Virgin Islands Economic Development Park Corporation. As I provide the necessary leadership for my Administration to remain focused on harnessing economic opportunities for our Territory, I look forward to working together to ensure a greater quality of life for the people of the U.S. Virgin Islands. Sincerely, Albert Bryan Jr., Governor 2 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 3 MESSAGE FROM LIEUTENANT GOVERNOR OFFICE OF THE LIEUTENANT GOVERNOR UNITED STATES VIRGIN ISLANDS The U.S. Virgin Islands Economic Development Authority (USVIEDA) serves as a vital resource for economic growth and development in the Territory. Charged with the responsibility of compiling fiscal year annual reports, the USVIEDA recognizes the importance of having accessible industry data. I applaud their efforts in creating a comprehensive financial summary of the economic climate of the U.S. Virgin Islands. This annual report is intended to provide stakeholders with valuable information regarding business op- portunities, economic developments, benefits and incentives, and strategic approaches to the current mar- ket. The Virgin Islands has much to offer with industries that provide a framework for new economic ideas and growth. COVID-19 has undoubtedly had a tremendous impact on several segments of our business community with widespread challenges and uncertainties. However, even during the current pandemic, opportunities have emerged. The innovation and resilience of business owners, investors, and vested stakeholders demonstrate a ro- bust ability to make needed and viable changes. Many have adapted to our present reality. As we embrace the need for new approaches, we also recognize the potential economic benefits that we are poised to realize. There are healthy indicators that currently exist for our economy, and even greater opportunities are forecasted. The U.S. Virgin Islands is poised to take advantage of these changes, to in- clude expanding our tourism product and other sustainable markets. In striving to move our Territory forward, we must recognize the benefits of economic development. We must also remain steadfast in identifying ways to revitalize our business community, to safely restore our cruise-line industry, to expand tourism products, and to stimulate areas of the economy that may have been overlooked. The USVIEDA Annual Report will remain a staple guide as we explore ways to take the Virgin Islands to new economic heights. Best wishes, Tregenza A. Roach Lieutenant Governor 4 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 5 MESSAGE FROM THE ASSISTANT CHIEF EXECUTIVE OFFICER Fiscal year (FY) 2019 was marked by a reflection on significant investment program impacts, new leadership, and targeted activities our organization can use to attract business development and to support our local entrepreneurs. In July 2019, the V.I. Economic Development Authority (USVIEDA) released the Economic Impact Analysis (EIA) Report for the V.I. Economic Development Commission’s Tax Incentive Program. This report, covering a three-year period, was prepared by the University of the Virgin Islands’ Institute for Leadership and Organizational Effectiveness (ILOE) in partnership with the USVIEDA, following the institute’s independent study of this program. The EIA report reflects the value of the VIEDC Tax Incentive Program with approximately $1.5 billion Wayne L. Biggs, Jr. in direct, indirect, and induced impacts on the USVI’s employment, wages and salaries, tax payments and charitable contributions over three years. This report also makes a strong case that the VIEDC Tax Incentive Program is a key driver of the USVI’s economic development growth and the quality of life for business developers and our residents. To maintain this economic development stride, the USVIEDA continued to focus on attracting new business investment to the Territory through targeted events and additional and enhanced digital platforms. This fiscal year, the USVIEDA - through its Marketing Department - revamped its website, www.USVIEDA.org, by improving site navigation methods to retrieve targeted information for both residents and investors from abroad. This revamp led to a 35 percent increase in new users. The USVIEDA also re-launched its www.investusvirginislands.com website with an online USVI property listing for hotel and resort development. The USVIEDA also expanded its social media presence with the added platforms such as Facebook and Instagram; and participated in two conferences to attract hotel and business development. The USVIEDA also hosted its first Spin-off Event following the 2019 SelectUSA Investment Summit. Other initiatives to drive economic success included financial support for our small-business community and reducing our lending program’s small-business loan delinquency rates. In FY 2019, through our Economic Development Bank (EDB) team and their partners, loan payments by EDB clients increased by 15 percent from payments in FY 2018. The EDB also engaged the USVI community to support small businesses for American Express Small Business Saturday (SBS) in which the USVIEDA continues to be a SBS Neighborhood Champion. The U.S. Small Business Administration and the USVIEDA also entered into an agreement to help USVI small businesses by working together to inform these businesses about each organization’s small-business resources. The USVIEDA also continued to be a champion for small businesses with a local initiative aimed to assist small manufacturers and elevate the USVI brand. Through the USVIEDA’s Enterprise Zone Commission and its partnership with the Virgin Islands Council on the Arts, the “Made in the USVI” Pop Up Shop was launched in FY 2019 in the USVI with at least 20 small manufacturers and artisans that produced locally-made products. Part of the trajectory for a continued drive for economic development in the USVI includes good leadership and partnerships. This fiscal year, we welcomed three new board members: Kevin Rodriquez (Chairman), Gary Molloy (Vice Chairman) and Positive T. Nelson. Our USVIEDA team looks forward to working with these individuals - and newly-elected USVI Governor Albert Bryan, Jr., - all of whom have strong and diverse backgrounds in skillful leadership harnessed from their work within the public and private sectors. Once again, I would like to thank the USVIEDA Board of Directors, management and staff; our public and private sector partners, our residents and the USVI business community for their dedication and contributions in making economic development a top priority for our Territory’s sustainability and growth for future years to come. Sincerely, Wayne L. Biggs, Jr. Wayne L. Biggs, Jr. “…our leadership is not defined by our defense against threats, but by the enormous opportunities to do good and promote understanding.” -Barack Obama, 44th President of the United States This quote continues to remind me that becoming a leader presents new opportunities to learn - and most importantly - to serve others above oneself. MESSAGE FROM THE BOARD CHAIRMAN Kevin A. Rodrquez As the new chairman of the V.I. Economic Development Authority Board, it is my honor to be a part of the lead organization for economic development in the U.S. Virgin Islands. I extend my thanks and appreciation to my predecessor, former USVIEDA Board Chairman Josè A. Penn, for his dedicated service and leadership on this Board. I look forward to continuing to work with him, incoming USVIEDA Board Vice Chairman Gary Molloy and Board member Positive Nelson, other remaining Board members, and the USVIEDA team as we all work together to serve in the best interest of the people of the U.S. Virgin Islands. In FY 2019, a focus on the importance of tax incentive programs for economic development, the promotion of locally-made products, and the harnessing of financial support and resources for our small-to-medium sized businesses was evident. The Economic Impact Analysis (EIA) Report resonated the fact that the Virgin Islands Economic Development Tax Incentive Program is a tremendous contributor of Territory’s economic trajectory. For the period of 2013 to 2015, this report reflected 19,308 full- time equivalent jobs in the USVI; more than $1 billion in wages and salaries and more than $309 million in taxes and duties. Companies that signify their commitment to economic development projects can only enhance the possibilities of a robust economy in our Territory. Our local entrepreneurs are deemed equally important as well. With the launch of the first “Made in the USVI” Pop Up Shop in 2018, this shop featuring locally-made products manufactured by talented entrepreneurs exemplify USVI pride through their innovative and unwavering entrepreneurial spirit. While highlighting and supporting our local entrepreneurial talent, the USVI continued to join its U.S. partners in promoting the benefits of investing in the United States on the mainland and right here within the Caribbean region. This occurred through the USVI’s participation in Caribbean Hotel and Resort Investment Summit (CHRIS) in Miami, FL; and the USVIEDA’s first spin off event in the U.S. Virgin Islands following the USVIEDA’s sponsorship in the 2019 SelectUSA Investment Summit in Washington, DC. I look forward to working with the USVIEDA team, serving the USVI community, and working with the business community through economic and community development initiatives for the Territory as I embark on this new season of leadership and partnerships. Sincerely, Kevin A. Rodriquez Chairman of the USVIEDA Board 6 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 7 USVIEDA MANAGEMENT TEAM Kamal L. Latham Chief Executive Officer1 Wayne L. Biggs, Jr. Assistant Chief Executive Officer2 Chief Operating Officer Tracy Lynch Bhola, Esq. General Counsel Ernest Halliday Chief Financial Officer Margarita A. Benjamin Managing Director Economic Development Claude S. M. Gerard Director of Compliance Economic Development Commission Monique T. Samuel Interim Director of Lending Economic Development Bank Nadine Marchena Kean Managing Director Enterprise Zone Commission Mark Finch Park Superintendent Virgin Islands Economic Development Park Corporation Shanell Petersen Managing Director Marketing & 2040 Vision 1 Began his service as CEO of the USVIEDA on August 1, 2018. 2 Served as Interim CEO of the USVIEDA from May 1, 2015 to July 31, 2018 and reverted back to his former position as Assistant CEO of the USVIEDA on August 1, 2018. MISSION STATEMENT The U.S. Virgin Islands Economic Development Authority (USVIEDA) strives to be a customer service-based organization that creates positive/public private sector partnerships for the enhancement of economic growth and development by meeting the challenges of the global economy and serving the needs of the business community while embracing our unique cultural heritage and preserving our pristine natural environment. BOARD OF DIRECTORS Kevin Rodriquez Chairman Deputy Chief of Staff, Governor Albert Bryan Jr. Governor’s Staff representative Gary Molloy Vice Chairman Commissioner Virgin Islands Department of Labor Haldane Davies, Ph.D. Secretary Vice President for Business Development and Innovation at the University of the Virgin Islands (Representative from the University of the Virgin Islands) José A. Penn, Board Member Chief Financial Officer of Penns’ Apartment Rental, Inc.; Penns’ Jeep Rental, Inc. and Penns’ Trucking Services, Inc. (St. John Representative) Philip Payne, Board Member Owner and CEO of Dyer & Payne, Inc. (St. Croix representative) Positive T. Nelson, Board Member Commissioner Virgin Islands Department of Agriculture 8 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 9 TABLE OF CONTENTS Message from the Chairman of the Board .......................................................................................................................4 Message from the Assistant Chief Executive Officer...................................................................................................5 Board of Directors .........................................................................................................................................................................6 Management Team .......................................................................................................................................................................7 Mission Statement.........................................................................................................................................................................7 Overview: U.S.V.I. Economic Development Authority ..............................................................................................10 Virgin Islands Economic Development Commission ...............................................................................................11 EDC Applications Division ................................................................................................................................................11 EDC Compliance Division .................................................................................................................................................25 Virgin Islands Economic Development Park Corporation .....................................................................................34 Economic Development Bank .............................................................................................................................................36 Incubator Program ................................................................................................................................................................39 Enterprise Zone Commission ...............................................................................................................................................40 Marketing and Public Relations ..........................................................................................................................................43 Financials - Summary................................................................................................................................................................63 Staff of the U.S.V.I. Economic Development Authority ........................................................................................102 10 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 11 OVERVIEW: U.S.V.I. ECONOMIC DEVELOPMENT AUTHORITY The U.S. Virgin Islands Economic Development Authority (USVIEDA) was created to “aid the Government in the performance of its duties to develop the economy of the Virgin Islands as a semi-autonomous government instrumentality on February 1, 2001 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.” In fiscal year 2014 through Virgin Islands legislation, the GDB and the SBDA were merged to create the Economic Development Bank (EDB) in which the SBDA exists under the EDB. The IPDC was also changed to the Virgin Islands Economic Development Park Corporation (EDPC). Legislation also included a commercial zone to be under the Enterprise Zone Commission. The Authority accomplishes its mission by 1) attracting multi-national investors to establish or relocate their businesses to the United States Virgin Islands, 2) providing financial assistance through its lending arm, namely the Economic Development Bank, to emerging and established small to medium-sized businesses in the Territory, 3) offering space for lease to businesses at the economic development parks through the Virgin Islands Economic Development Park Corporation, and 4) assisting Virgin Islands residents and business owners with rehabilitating their properties located in blighted and distressed areas that were once vibrant economic centers of activity in the Territory. The Authority is funded by the general fund based on a budget request from the Governor and the USVIEDA Board of Directors which must ultimately be approved by the Legislature of the Virgin Islands. The powers of the Authority are exercised in a seven-member board which consists of three (3) members that are appointed by the Governor from among heads of cabinet-level executive departments or agencies or from among the Governor’s executive staff, three (3) members who are not employees of the Government of the United States Virgin Islands and are appointed by the Governor with the advice and consent of the Legislature, and one (1) member 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. V.I. ECONOMIC DEVELOPMENT COMMISSION APPLICATIONS DIVISION The Virgin Islands Economic Development Commission (VIEDC) was created by Virgin Islands legislation and is charged with the promotion of the growth, development, and diversification of the economy in the United States Virgin Islands by 1) developing the human and economic resources of the Territory, 2) preserving job opportunities for residents of the U.S. Virgin Islands, and 3) promoting capital formation to support economic development in the Territory. The VIEDC consists of two entities, the Applications Division and the Compliance Division. The Applications Division is the first point of contact for a business that seeks to apply for economic development benefits. Economic development benefits are “various tax exemptions and tax subsidies for which any person, member of a partnership, partnership or corporation” is granted according to Virgin Islands law. In exchange, businesses that receive economic development benefits are to create job opportunities and generate tax revenues in the U.S. Virgin Islands. The Applications Division also oversees the VIEDC Small Business Program and the VIEDC Eligible Suppliers Program. The Compliance Division ensures that companies receiving VIEDC tax incentives understand and comply with the terms of their certificates. USVI Governor Albert Bryan Jr. (5th individual from the left wearing a blue tie), is joined by (left to right) prospective investor Jose` Perez, USVIEDA CEO Kamal I. Latham, prospective investors Soyini Chan Shue, Carlos Walter, and Peter Irving; Governor’s Deputy Chief of Staff Kevin Rodriquez; prospective investors Dan Javan, Felix Chevalier, Jim Russell, and Lawrence Moskowitz at the “Business Forum Luncheon” at Government House on St. Croix on Friday, June 14, 2019. This luncheon was part of a series of activities hosted by the USVIEDA during the “2019 U.S. Virgin Islands Investor Forum” on St. Thomas and St. Croix. This forum was a USVI spinoff event following the “2019 SelectUSA Investment Summit” held in Washington, D.C. –Photo courtesy of Government House 12 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 13 APPLICATIONS PROCESSED During FY 2019, VIEDC application matters were held at 7 public hearings of which presentations were made by 17 applicants as follows: TABLE 2: VIEDC Public Hearing Cases NO. NAME OF APPLICANT PUBLIC HEARING DESCRIPTION ISLAND 1. Tropico Management, LP 10-16-2018 Business Management St. Croix 2. Rock City Brewery Company, LLC 12-04-2018 Manufacturer St. Thomas 3. Thriving Charities Advocates, LLC 12-04-2018 Designated Services Business St. Thomas 4. YHG Hotel, LLC 12-04-2018 Hotel St. Thomas 5. YHG USVI, LLC 12-04-2018 Marina St. Thomas 6. Island Roads Corporation 04-16-2019 Asphalt Manufacturer St. Thomas 7. Neighborhood Establishment, LLC 04-16-2019 Hotel/Guesthouse St. Croix 8. Davis Bay, LLC 05-15-2019 Hotel/Guesthouse St. Croix 9. Carambola Golf Club, LLC 06-11-2019 Golf Course St. Croix 10. Marriott Ownership Resort (St. Thomas), Inc. 06-11-2019 Hotel/Guesthouse St. Thomas 11. Sunset Cove Holdings, LLC 06-11-2019 Business Management St. Thomas 12. Westin St. John Hotel Company, Inc. 06-11-2019 Hotel/Guesthouse St. John 13. Auven Therapeutics Management, LLC 07-11-2019 Financial Service St. Thomas 14. Flat Cay Management, LLC d/b/a Lindbergh Bay Hotel & Villas, Inc. 07-11-2019 Hotel/Guesthouse St. Thomas 15. Harborside Corporation d/b/a Bolongo Bay Beach Resort 07-11-2019 Hotel/Guesthouse St. Thomas 16. Lawrence Moskowitz CLU, Ltd. 08-13-2019 Financial Service St. Thomas 17. Lovango Island Holdings, LLP 08-13-2019 Hotel/Guesthouse St. Thomas APPLICATIONS RECEIVED During FY 2019, the Virgin Islands Economic Development Commission (“VIEDC”) received a total of 9 applications: 4 new, 2 extension/modifications, 1 extension, 1 modification and 1 transfer application. The statistics show that the 9 applications received for VIEDC tax incentives represent potential future economic impact  of  a minimum of 174 jobs to be created/retained, $7.6 million to be paid in wages, and over $31.4 million to  be made in capital investments. These Applicants also represent the potential for the U.S. Virgin Islands to realize approximately $24.6 million in taxes over a five-year period. TABLE 1: VIEDC Applications Received NO. COMPANY NAME TYPE OF APPLICATION CATEGORY TYPE OF BUSINESS STATUS AS OF 09/30/2019 1. Neighborhood Establishment, LLC New III Hotel/Guesthouse Approved 2. Flat Cay Management, LLC d/b/a Lindbergh Bay Hotel & Villas Extension / Modification III Hotel/Guesthouse Approved 3. Davis Bay, LLC f/k/a Carambola Northwest, LLC Transfer III Hotel Resort Approved 4. Sunset Cove Holdings, LLC New IV Financial Service Approved 5. Auven Therapeutics Management, LLLP Extension / Modification IV Financial Service Approved 6. Lovango Island Holdings, LLP New III Hotel/Guesthouse Tabled 7. Westin St. John Hotel Company, Inc. Modification III Hotel/Guesthouse Approved 8. Roncan Inc. d/b/a Sand Castle on the Beach Extension III Hotel/Guesthouse Pending 9. Global Associates Management New IV Small Business Pending The 4 new applicants represent approximately 45 jobs, over $2.5 million in wages, approximately $21.2 million in investments and $95.5K in charitable contributions. Projected total taxes over a five-year period is approximately $7.5 million. 14 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 15 VIEDC DECISION MEETINGS: During FY 2019, a total of 6 meetings were held and 21 cases were presented for decision, including 1 applicant under the Sustainable Tourism Through Arts-Based Revenue Streams (STARS) Act. Twenty applications were approved of which 2 included denial of increased percentage of incentives, and extended benefit. One application was tabled. TABLE 3: VIEDC Decision Meeting Cases No. NAME OF APPLICANT DECISION MEETING TYPE OF APPLICATION STATUS 1. DiamondRock Frenchman’s Owner, Inc. 11-08-2018 Hotel 1 Approved 2 Denied 2. Plessen Healthcare, LLC 11-08-2018 Healthcare Facility Approved 3. Yusuf Drinking Water, Inc. 11-08-2018 Manufacturer Approved 4. Rock City Brewing Company, LLC 03-28-2019 Manufacturer Approved 5. Tropico Management, LP 03-28-2019 Business Management Approved 6. Thriving Charities Advocates, LLC 03-28-2019 Financial Services Approved 7. YHG Hotel, LLC 03-28-2019 Hotel / Guesthouse Approved 8. Yacht Haven USVI, LLC 03-28-2019 Marina Facility Approved 9. Silver Lines Films, Inc. 03-28-2019 Film Production –STARS Approved 10. Davis Bay, LLC 05-30-2019 Hotel/Guesthouse Approved 11. Neighborhood Establishment, LLC 07-30-2019 Hotel/Guesthouse Approved 12. Sunset Cove Holdings, LLC 07-30-2019 Business Management Approved 13. Carambola Golf Club, LLC 08-13-2019 Golf Course Approved 14. Island Roads Corporation 08-13-2019 Asphalt Manufacturer Approved 15. Marriott Ownership Resort 08-13-2019 Hotel/Guesthouse 1 Approved 2 Denied 16. Auven Therapeutics Management, LLC 09-18-2019 Financial Service Approved 17. Flat Cay Management, LLC d/b/a Lindbergh Bay Hotel 09-18-2019 Hotel/Guesthouse Approved 18. Harborside Corporation d/b/a Bolongo Bay Beach Resort 09-18-2019 Hotel/Guesthouse Approved 19. Lawrence Moskowitz CLU, Ltd 09-18-2019 Financial Service Approved 20. Lovango Island Holdings, LLP 09-18-2019 Hotel/Guesthouse Tabled 21. Westin St. John Hotel Co., Inc. 09-18-2019 Hotel/Guesthouse Approved *No Governor Approval Required. 4 4 Pursuant to Act No. 8017 was overridden on December 21, 2017 which repealed Section § 717a. Action by the Governor and the Commission, removing the Governor’s consideration on “New” applicants. Subsequently, Act No. 8056 was overridden on June 14, 2018 which required that all VIEDC applications no longer require the Governor’s approval. CERTIFICATES During FY 2019, a total of 15 certificates: 8 extensions/modifications, 2 modifications, 5 new were executed. One Beneficiary withdrew its request to commence incentives, and the file was closed. The remaining 12 Beneficiaries’ pending certificates were in various stages of the application process at the end of the fiscal year. Based on the commitments made by the 28 Beneficiaries with certificates executed to date, the Territory will realize new and continued employment at a minimum of 945 full-time employees, and approximately $134.6 million in capital investments, and $1.3 million in charitable contributions annually. It is also estimated that the Territory will potentially generate direct taxes over a five-year period of more than $29.8 million should the business operations materialize as projected. TABLE 5: VIEDC Certificates of Benefits NO. COMPANY NAME TYPE STATUS 1. Global MedChoices Group, LLC New 02-28-2019 2. Castle Medical Holding, Inc. New CLOSED 5 3. Margaritaville Vacation Club by Wyndham Extension/Modification 10-03-2018 4. Cinnamon Bay Resort* New In Process 5. Leatherback Brewing Company, LLC New 10-03-2018 6. Grapetree Shores, Inc. d/b/a Divi Carina Bay Resort* Extension/Modification 05-15-2019 7. Tramway Properties, Inc. Extension/Modification 10-25-2018 8. Coral World (V.I.), Inc. Extension/Modification 10-31-2018 9. IGY-AYH St. Thomas Holdings, LLC d/b/a American Yacht Harbor Extension/Modification 11-05-2018 10. Secret Harbour Beach Associates, LLLP Extension/Modification 03-01-2019 11. Alpine Group USVI, LLC Modification 2-01-2019 12. White Bay Global, Inc. Modification 10-15-2018 13. Liberty Medical Development, LLC New (First Amended) 01-15-2019 14. Tree Limin’ Extreme, LLC New 02-01-2019 15. Sugar Bay Club & Resort Corp.* Extension/Modification 04-16-2019 16. Yusuf Drinking Water, Inc.* New In Process Pending election of benefits Transmitted to client for review 17. Evolve USVI, LLC* New In Process 18. Inner Circle Logistics, Inc. New In Process 19. Heavy Materials, LLC Modification In Process Transmitted to Client for review 5 Closed due to internal business reasons, and the sole shareholder is unable to relocate to the U.S. Virgin Islands. 16 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 17 NO. COMPANY NAME TYPE STATUS 20. Tropico Management, LP Modification In Process 21. Plessen Healthcare, LLC New 09-12-2019 22. International Private Banking, LLC New / IFSE In Process 23. Carambola ZipLine, LLC New In Process 24. Davis Bay, LLC Transfer In Process 25. YHG Hotel, LLC New In Process 26. Yacht Haven USVI, LLC Extension/Modification 9-19-2019 27. Thriving Charity Advocates, LLC New In Process 28. Rock City Brewing Company, LLC New In Process TABLE 5: VIEDC Certificates of Benefits, continued FISCAL YEARS HISTORICAL DATA PENDING APPLICATIONS 2018 2019 No. of Prior Applications pending Beginning of Fiscal Year 19 16 Current Year Applications Received 13 9 Applications Withdrawn -1 0 Total Applications Pending 31 25 No. of Prior Applications Processed (Approved; -14, Denied-0) 13 14* No. of Current Year Applications Processed (Approved -5 ; Denied -0) 2 5 Balance at end of year 16 6 Note: 14-VIEDC applicants 15 applications processed included 1 from STARS Act program. HISTORICAL APPLICATION INFORMATION FY 2017 FY 2018 FY 20196 No. of Apps Received 13 11 9 No. of Apps Approved 2 2 6 No. of Apps Tabled or Denied 1 0 1 No. of Apps Transfer to Research Technology Park 0 0 0 No. of Apps Pending 10 8 3 No. of Apps Withdrawn 0 1 0 Job Opportunities 571 570 337 Approx. Wages of Apps $20,425,708 $20,607,701 $15,698,239 Minimum Potential Investment of Apps. $24,689,910 $222,305,105 $89,038,465 TABLE 6: Economic Development Commission FY Historical Application Information 6 4 new Applicants; 2 extension/modifications, 1 extension, 1 modification, 1 transfer of tax incentive benefits. 18 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 19 INQUIRIES FROM POTENTIAL INVESTORS During FY 2019, the Application Unit responded to 48 inquiries for general information and/or re- quest for information on the VIEDC Program. Meetings were held with 13 potential investors with strong interest in doing business within the Territory. TABLE 7: VIEDC Business Inquiries NO. TYPE OF BUSINESS LOCATION 1. Boutique Hotel St. Croix 2. Dental Practice St. Thomas & St. Croix 3. Designated Business Service (Back office ) Atlanta 4. Venture Capital Arizona 5. Contractor Connecticut 6 Air Transportation St. Croix 7. Data Analytics St. Croix 8. Hotel St. Croix 9. Financial Risk Management Costa Rica 10. Manufacturer Maryland 11. Renewable Energy Products New Jersey 12. Hotel Ohio 13. Construction Anguilla 14. Boutique Hotel St. Croix 15. Hotel St. Croix 16. World Pay Processing Business St. Croix 17. Cannibas Resort St. Croix 18. Natural Gas Distributor St. Croix 19. Manufacturer Georgia NO. TYPE OF BUSINESS LOCATION 20. Academy Fueling California 21. Restaurant New York 22. Financial Services Cayman Islands 23. Contractor St. Thomas 24. Brewery USVI 25. IT Financial Company Pennsylvania 26. Tax & Consulting Services New York 27. Laboratory Boston 28. Real Estate Texas 29. IT Services Kansas City 30. Coding/IT Services Puerto Rico 31. Jet Fuel Supplier Alabama 32. Manufacturing (Energy Products) St. Thomas 33. Financial Services Florida 34. Ophthalmology Tennessee 35. Foreign Investment Connecticut 36. Financial Services Texas 37. Security and Private Client Protection New York 38. Investment Services Canada 39. Insurance Products USA 20 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 21 NO. TYPE OF BUSINESS LOCATION 40. Amusement Park St. Thomas 41. Caribbean Solar Company St. John 42. HOM Property Management & Vacation Rentals St. Croix 43. Haugland Energy St. Croix 44. Financial Services St. Croix 45. Restaurant California 46. Shutters Florida 47. Rentals St. Thomas 48. Rentals St. Thomas TABLE 7: VIEDC Business Inquiries, continued ELIGIBLE VI SUPPLIER PROGRAM For the FY 2019, a total of 21 Eligible VI Supplier applications were received of which 15 were approved, two (2) denied, one (1) closed, and three (3) were pending at the end of the year. TABLE 8: EDC Eligible VI Suppliers NO. DATE RECEIVED NAME OF COMPANY BUSINESS LOCATION STATUS 1. 10-3-2018 St. John Plumbing, Inc. St. John Approved 10-23-2018 2. 11-7-2018 O’Reilly Plumbing & Construction, Inc. St. Croix Approved 11-27-2018 3. 11-30-2018 Virgin Islands Asphalt Products Corporation St. Croix Approved 12-14-2018 4. 1-2-2019 Petroleum Brokers, LLC St. Thomas Approved 1-10-2019 5. 1-10-2019 Kind Breeze, LLC dba Green Banana VI St. Thomas Closed 5-9-2019 6. 1-22-2019 Stedman, Dana dba Jaydee’s Prof. Window Cleaning & Powerwashing St. Thomas Approved 1-29-2019 NO. DATE RECEIVED NAME OF COMPANY BUSINESS LOCATION STATUS 7. 1-23-2019 Rodney & Associates, LLC St. Croix Approved 1-29-2019 8. 1-30-2019 Calidad Construction & Maintenance, LLC St. Croix Approved 3-29-2019 9. 1-31-2019 Knight Business Center, Inc. dba Insurance Shop St. Thomas Approved 02-04-2019 10. 2-11-2019 Clever Maniacs. LLC St. Croix Pending 11. 2-11-2019 Cruzan Group, LLC dba Ay Ay Palace, Total Build- ers & Paradise Recycling St. Croix Pending 12. 3-13-2019 LEBG, LLC St. Thomas Approved 3-19-2019 13. 5-8-2019 Just Elevate, LLC St. Thomas Denied 5-9-2019 14. 5-8-2019 Melvin Jeffers dba Solid Construction Company St. Croix Approved 9-20-2019 15. 6-11-2019 LPI Consultants, LLC St. Thomas Approved 9-13-2019 16. 7-30-2019 Optimal Construction Management, LLC St. Thomas Approved 9-18-2019 17. 8-2-2019 Jason P. Meade, Sr. dba Meade’s A/C Maintenance St. Thomas Approved 9-3-2019 18. 8-5-2019 Donald Pogue dba Island Mechanical St. Croix Pending 9-11-2019 19. 8-7-2019 Pulse Technology Solutions of the Islands, LLC St. Thomas Denied 9-4-2019 20. 8-27-2019 S.G.F. Construction St. Thomas Approved 9-3-2019 21. 8-27-2019 First Phase Datacomm, LLC St. John Approved 9-3-2019 ELIGIBLE SUPPLIERS APPLICATIONS FY 2017 FY 2018 FY 2019 Received 22 14 21 Approved 17 9 15 Denied 3 4 2 Pending 0 1 3 Withdrawn/Closed 2 0 1 22 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 23 COMMUNITY OUTREACH PROGRAMS, INFORMATIONAL AND OTHER MARKETING INITIATIVES: During the fiscal year to date, the VIEDC participated at the following: • Markets Group - Private Wealth Latin America & Caribbean Forum - Miami, Florida – October 15- 18, 2018: Margarita A. Benjamin, Director of Applications and Shanell Petersen, Marketing Director, attended this forum and met with leaders of family offices, wealth managers, RIAs, private banks and asset from Latin American and Caribbean region. • White House Briefing Calls: Participated in discussions on Opportunity Zones on October 19, 2019 • Inter-agency Presentation: Managing Director assisted in the coordination of the inter-agency presentation by Water Island Development Company proposed resort development project on Water Island held at the University of the Virgin Islands on February 28, 2019. • High Net Worth Investor Meeting: Economic Development Managing Director Benjamin and US- VIEDA CEO Kamal Latham attended investor meeting with Steve Pagliuca, private equity investor of Bain Capital and Co-owner of Boston Celtics; also met with Entercom regarding potential mar- keting campaign. • University of Illinois at Urbana-Champaign Managing Director Benjamin assisted and presented along with other team members of EZC and EDB to a group of undergraduate students on a busi- ness-themed university trip to the USVI and British Virgin Islands. Mr. Michael P. Donohoe, Accoun- tancy Professor, accompanied the group on March 19, 2019. • Eligible VI Supplier Program Presentation: Participated in the Virgin Islands Small Business De- velopment Center Small Business Week, May 5 - 11, 2019, by presenting at seminar on Eligible VI Supplier Program on May 10, 2019. • Managing Director Margarita Benjamin and staff participated and attended along with other US- VIEDA staff members the following marketing events: - The Houston Family Office and High Net Worth Annual Conference”, Houston, Texas: May 15 – 17, 2019. - 2019 Caribbean Hotel and Resort Investment Summit (CHRIS) Conference at Loews Miami Beach Hotel, Miami, FL: Monday, May 20, 2019 through Friday, May 24, 2019; - 2019 SelectUSA Summit, Washington, DC: June 10-12, 2019 • USVI EDA’s 2019 Investor Forum: - Assisted in the planning and execution of the spin off event from the SelectUSA Summit June 13-15, 2019 • “Business Model Canvas Workshop”: Hosted and presented this workshop designed for entrepre- neurs and business owners who want to evaluate, expand or create a business on St. Thomas on October 22, 2019 at the VI SBDC Training Facility at Nisky Center and on St. Croix on October 24, 2019 at the UVI Cooperative Extension Service (CES) Room 133, Albert A. Sheen Campus. VIEDC Online Application Platform Staff members continued to work on the development of the VIEDC Online Electronic Application with representatives from WizeHive and other stakeholders. Staff participated in demo presenta- tions with the vendor, developed an online portal with consultants, and presented the platform to the USVIEDA Board and VIEDC practitioners for feedback. The online application will be launched at a later date. OTHER ACTIVITIES: • Excise Tax Manufacturer WebEx Seminar: VIEDC Application and Compliance staff participated in the seminar on January 16, 2019. • Legislative Hearing before the Committee on Economic Development, Regulation and Agriculture: Managing Director attended the on March 11, 2019 on St. Croix, USVI; • VIEDC Board Orientation: Managing Director made presentation on the Economic Develop- ment Program at the on March 15, 2019. • Meetings: Managing Director participated in several meetings regarding proposed amend- ments to Hotel Development Program, Tax Increment Financing (TIF) and STARS Act legisla- tions. USVIEDA CEO Kamal Latham shares information about USVIEDA programs and services at the USVI Charter Yacht Show on November 14, 2018. - Photo by Phil Blake/Virgin Islands Professional Charter Association 24 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 25 VIEDC Compliance Report The purpose of the VIEDC Compliance Division is to promote compliance with the economic devel- opment program law, rules and regulations, and the beneficiary’s certificate of benefits. This entity provides two services: 1) audit (assurance services) and 2) compliance (ethics) which supports the vision of making compliance under this program commonplace. The Compliance Division monitors beneficiaries (business applicants that are approved to participate in the VIEDC Tax Incentive Program) to ensure that they comply with the terms and conditions of their certificates and other requirements of the law. In this context, certificates are contracts a business has with the Virgin Islands government as a participant of the VIEDC Tax Incentive Program. The VIEDC Compliance Division ensures the integrity of the VIEDC Tax Incentive Program through a compliance review process and reports its findings to the VIEDC board. Funds derived from any assessed penalties for non-compliance with program requirements by a beneficiary may be used to support education, workforce development, and training programs within the territory. The integrity of the VIEDC Tax Incentive Program is of great value and importance, more so as we continue to serve in the best interest of the U.S. Virgin Islands, its residents and business community. Through the work of VIEDC Compliance Division staff, the activities of beneficiaries under the VIEDC Tax Incentive Program are not only monitored to help ensure our beneficiaries comply with the re- quirements of this program, but it is an opportunity to build relationships with our beneficiaries who are considered to be our partners for economic development within our territory. This report reflects the activities of the Virgin Islands Economic Development Commission Com- pliance Division during FY2019. During this period, there were 70 beneficiaries of which 64 were actively conducting business and six tax incentive certificates were on suspension. V.I. ECONOMIC DEVELOPMENT COMMISSION COMPLIANCE DIVISION Crown Bay Cargo Port - Photo courtesy of the Virgin Islands Port Authority 26 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 27 COMPLIANCE REVIEWS: The Division of Compliance completed 10 compliance reports within FY2019: 6 in the St. Thomas-St. John District, and 4 in the St. Croix District. NO. BENEFICIARY COMPLIANCE PERIOD FINDINGS DATE COMPLETED ISLAND 1. Southern Trust Company, Inc. 2/1/2013- 12/31/2017 Full-Compliance 11/15/2018 St. Thomas 2. Pelican Cove Investments, LLC 1/1/2016- 6/30/2017 Non-Compliance 11/19/2018 St. Croix 3. Grapetree Shores, Inc. d/b/a Divi Carina Bay Resort 1/1/2015- 12/31/2016 Non-Compliance 11/30/2018 St. Croix 4. Cane Bay Partners VI, LLLP 01/01/2012- 12/31/2015 Non-Compliance 12/20/2018 St. Croix 5. Emerald Beach Corporation 07/01/2012- 6/30/2013 Non-Compliance 12/28/2018 St. Thomas 6. Emerald Beach Corporation 07/01/2013- 6/30/2016 Non-Compliance 12/28/2018 St. Thomas 7. Bellicose VI, LLC 01/01/2013- 12/31/2015 Non-Compliance 1/11/2019 St. Thomas 8. Carambola Northwest, LLC 08/01/2015- 12/31/2017 Non-Compliance 4/15/2019 St. Croix 9. Auven Therapeutics Management, LLLP 01/01/2014- 12/31/2017 Full-Compliance 4/12/2019 St. Thomas 10. United Electronic Industries Ser- vices, LLC 1/1/2014- 12/31/2017 Non-Compliance 9/10/2019 St. Thomas NO. BENEFICIARY TYPE OF CERTIFICATE CERTIFICATE EXECUTED ISLAND 1. Leatherback Brewing Company, Inc. New 10/3/2018 St. Croix 2. Margaritaville Vacation Club By Wyndham, Inc. Extended/Modified 10/3/2018 St. Thomas 3. White Bay Global, Inc. Modified 10/15/2018 St. Thomas 4. Tramway Properties, Inc. Second Extended 10/25/2018 St. Thomas 5. Tramway Properties, Inc. First Modified 10/25/2018 St. Thomas 6. IGY-AYH ST. Thomas Holdings, LLC d/b/a American Yacht Harbor Second Extended and First Modified 11/5/2018 St. Thomas 7. Coral World (V.I.), Inc. Fifth Extended and First Modified 10/31/2018 St. Thomas 8. Liberty Medical Development, LLC New 1/15/2019 St. Croix 9. Tree Limin’ Extreme, LLC New 2/1/2019 St. Thomas 10. Alpine Group USVI, LLC First Modified 2/1/2019 St. Thomas 11. Global Medchoices Group, LLC New 2/28/2019 St. Thomas 12. Secret Harbour Beach Associates, LLLP Modified 3/1/2019 St. Thomas 13. Grapetree Shores, Inc. d/b/a Divi Carina Bay Resort Second Extended and First Modified 5/15/2019 St. Croix 14. Plessen Healthcare, LLC New 9/12/2019 St. Croix CERTIFICATES EXECUTED: During FY2019 14 executed Certificates were transmitted to the Compliance Unit: 10 Certificates were executed for Beneficiaries located in the St. Thomas-St. John District, and 4 in the St. Croix District. 28 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 29 CERTIFICATE ORIENTATIONS: During FY2019, 16 Compliance Orientations were conducted: 13 orientations were conducted in the St. Thomas-St. John District, and 3 in the St. Croix District. NO. BENEFICIARY ORIENTATION DATE ISLAND 1. Tramway Properties, Inc. 11/9/2018 St. Thomas 2. Tramway Properties, Inc. 11/9/2018 St. Thomas 3. White Bay Global, Inc. 11/13/2018 St. Thomas 4. Leatherback Brewing Company, Inc. 11/16/2018 St. Croix 5. RC Hotels (Virgin Islands), Inc. 12/6/2018 St. Thomas 6. Coral World (V.I.), Inc. 12/12/2018 St. Thomas 7. Air Ambulance Caribbean, Inc. d/b/a AeroMD 12/14/2018 St. Thomas 8. Westin St. John Hotel Company, Inc. and its wholly owned subsidiaries WVC St. John and Westin Vacation Mangement Company 10/29/2018 St. John 9. Westin St. John Hotel Company, Inc. and its wholly owned subsidiaries WVC St. John and Westin Vacation Mangement Company 10/29/2018 St. John 10. Liberty Medical Development, LLC 1/16/2019 St. Croix 11. IGY-AYH ST. Thomas Holdings, LLC d/b/a American Yacht Harbor 2/1/2019 St. Thomas 12. Tree Limin’ Extreme, LLC 3/20/2019 St. Thomas 13. Margaritaville Vacation Club By Wyndham, Inc. 5/29/2019 St. Thomas 14. Secret Harbour Beach Associates, LLLP 5/30/2019 St. Thomas 15. Alpine Group USVI, LLC 6/13/2019 St. Thomas 16. Grapetree Shores, Inc. d/b/a Divi Carina Bay Resort 8/22/2019 St. Croix SITE VISITS: During FY2019, 4 site visits were conducted: 2 sites visits were conducted in the St. Thomas-St. John District, and 2 in the St. Croix District. NO. BENEFICIARY SITE VISIT ISLAND 1. United Electronic Industries Services, LLC 6/18/2019 St. Thomas 2. Neltjeberg Bay Enterprises, LLC 6/14/2019 St. Thomas 3. Territory East Asset Management, LLC 5/24/2019 St. Croix 4. Caribbean Reservations, Inc. 4/29/2019 St. Croix Samuel Hugli, Westin’s General Manager, (center), talks with Kamal I. Latham, USVIEDA chief executive officer, and Claude S.M. Gerard, VIEDC director of compliance, at the Westin St. John dock on October 29, 2018 during a site visit of the hotel. - Photograph taken by Sandra Bess/USVIEDA 30 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 31 BOARD ACTIONS - PUBLIC HEARING: During FY2019, 14 petitions were heard at public hearing to the VIEDC Governing Board for deliberation: 10 in the St. Thomas-St. John District, and 4 in the St. Croix District. NO. BENEFICIARY TYPE OF PETITION BOARD MEETING DATE ISLAND 1. Yacht Haven USVI, LLC Show Cause Hearing 10/16/2018 St. Thomas 2. St. Thomas Healthcare Management, Inc. Show Cause Hearing 10/16/2018 St. Thomas 3. Westin St. John Hotel Company, Inc. Waiver of Full-Time Employment/ Standard Conditions/Charitable Contributions 10/16/2018 St. John 4. DiamondRock Frenchman’s Owner, Inc.d/b/a Frenchman’s Reef and Morning Star Marriott Beach Resort Charitable Contribution 12/4/2018 St. Thomas 5. Inner Circle Logistics, Inc. Show Cause Hearing 12/4/2018 St. Croix 6. Harborside Corporation d/b/a Bolongo Bay Beach Resort Extension of Full-Time Employment Waiver 4/25/2019 St. Thomas 7. RC Hotels (Virgin Islands), Inc. Extension of Full-Time Employment Waiver 4/25/2019 St. Thomas 8. Carambola Northwest, LLC Extension of Full-Time Employment Waiver 5/15/2019 St. Croix 9. 183 Media, LLC Extension of Full-Time Employment Waiver 6/11/2019 St. Thomas 10. International Capital and Management Company, LLC. Full-Time Employment Waiver 6/11/2019 St. Thomas 11. Sunshine Shopping Center, Inc. Full-Time Employment Waiver 6/11/2019 St. Croix 12. Tuthill Corporation Full-Time Employment Waiver 6/11/2019 St. Thomas 13. Air Ambulance Caribbean, Inc. d/b/a AeroMD Full-Time Employment/80% Residency Requirement Waivers 7/11/2019 St. Thomas 14. U.S. Viking, LLC Full-Time Employment Waiver 7/11/2019 St. Croix BOARD ACTIONS – DECISION MEETING: During FY2019, 40 petitions/reports were prepared for presentation to the VIEDC Governing Board for deliberation: 25 in the St. Thomas-St. John District, and 15 in the St. Croix District. NO. BENEFICIARY BOARD TYPE 0F PETITION BOARD MEETING DATE ISLAND 1. 183 Media, LLC Full-Time Employment Waiver 10/16/20187 St. Thomas 2. Concordia Campgrounds, Inc. Resolution of Non-Compliance 10/16/2018* St. John 3. DIAM Management, Inc. Resolution of Non-Compliance 10/16/2018* St. Croix 4. Grapetree Shores, Inc. Full-Time Employment Waiver 10/16/2018* St. Croix 5. Impact Technologies VI, Inc. Full-Time Employment/Special Condition Waivers 10/16/2018* St. Thomas 6. JH Capital VI, Inc. Suspension of Incentives/Special Condition Waiver 10/16/2018* St. Thomas 7. Marriott Ownership Resort (St. Thomas), Inc. Resolution of Non-Compliance 10/16/2018 St. Thomas 8. Spartan Products, LLC Resolution of Non-Compliance 10/16/2018 St. Croix 9. Westin St. John Hotel Company, Inc. Reconsideration of Fines Assessed 10/16/2018 St. John 10. Westin St. John Hotel Company, Inc. Full-Time Employment/Special Conditions Waiver 11/8/2018 St. John 11. Atlantic Industries, Inc. Resolution of Non-Compliance 12/13/2018 St. Croix 12. DiamondRock Frenchman’s Owner, Inc. d/b/a Frenchman’s Reef and Morning Star Marriott Beach Resort Charitable Contribution Waiver 12/13/2018 St. Thomas 13. Dun-Run Holdings, LLC Resolution of Non-Compliance 12/13/2018 St. Thomas 14. Harborside Corporation d/b/a Bolongo Bay Beach Resort Resolution of Non-Compliance 12/13/2018 St. Thomas 15. Inner Circle Logistics, Inc. Show Cause Resolution 3/28/2019 St. Croix 16. Bellicose VI, LLC Voluntary Termination of Incentives 4/25/2019 St. Thomas 7 The October 16, 2018 Decision Meeting was a continuation of the September 20, 2018 Decision Meeting. 32 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 33 NO. BENEFICIARY BOARD TYPE 0F PETITION BOARD MEETING DATE ISLAND 17. DiamondRock Frenchman’s Owner, Inc. d/b/a Frenchman’s Reef and Morning Star Marriott Beach Resort Charitable Contribution Waiver 4/25/2019 St. Thomas 18. Emerald Beach Corporation Resolution of Non-Compliance 4/25/2019 St. Thomas 19. Harborside Corporation d/b/a Bolongo Bay Beach Resort Extension of Full-Time Employment Waiver 4/25/2019 St. Thomas 20. RC Hotels (Virgin Islands), Inc. Extension of Full-Time Employment Waiver 4/25/2019 St. Thomas 21. Tuthill Corporation Extension of Time to meet Charitable Contributions 4/25/2019 St. Croix 22. Heavy Materials, LLC Resolution of Non-Compliance 4/25/2019 St. Thomas 23. Carambola Northwest, LLC Resolution of Non-Compliance 5/15/2019 St. Croix 24. Carambola Northwest, LLC Extension of Full-Time Employment/ Additional Waiver Request 5/15/2019 St. Croix 25. Caribbean Reservations, Inc. Resolution of Non-Compliance 5/15/2019 St. Croix 26. Galtere, Inc. Resolution of Non-Compliance 5/15/2019 St. Thomas 27. Galtere, Inc. Suspension of Incentives 5/15/2019 St. Thomas 28. 183 Media, LLC Extension of Full-Time Employment Waiver 6/27/2019 St. Thomas 29. International Capital and Management Company, LLC Full-Time Employment Waiver 6/27/2019 St. Thomas 30. Sunshine Shopping Center, Inc. Full-Time Employment Waiver 6/27/2019 St. Croix 31 Tuthill Corporation Full-Time Employment Waiver 6/27/2019 St. Croix 32. International Capital and Management Company, LLC Special Condition Waiver 8/6/2019 St. Thomas 33. Territory East Asset Management, LLC Internship Requirement Waiver 8/6/2019 St. Croix NO. BENEFICIARY BOARD TYPE 0F PETITION BOARD MEETING DATE ISLAND 34. U.S. Viking, LLC Full-Time Employment Waiver 8/6/2019 St. Croix 35. Air Ambulance Caribbean, Inc. d/b/a AeroMD Full-Time Employment/80% Residency/Charitable Contribution Waivers 9/18/2019 St. Thomas 36. Air Ambulance Caribbean, Inc. d/b/a AeroMD Extension of Time to Meet Special Condition No. 9 9/18/2019 St. Thomas 37. Caribbean Reservations, Inc. Reconsideration and Modification of Board Decision 9/18/2019 St. Croix 38. Emerald Beach Corporation Reconsideration of Board Decision 9/18/2019 St. Thomas 39. Impact Technologies VI, Inc. Waiver of Penalties 9/18/2019 St. Thomas 40. Pelican Cove Investments, LLC Resolution of Non-Compliance/ Voluntary Termination of Incentives 9/18/2019 St. Croix Decision meeting of November 8, 2018 was continued on November 26, 2018; May 15, 2019 continued on May 30, 2019; June 27, 2019 continued on July 30, 2019 then continued on August 6, 2019; July 11, 2019 continued on July 30, 2019 then rescheduled to August 6, 2019; August 29, 2019 rescheduled to September 12, 2019 then rescheduled to September 18, 2019. VIEDC Division of Compliance Collections: In FY2019, a total of $1,092,109.86 in fees and fines was invoiced to VIEDC Beneficiaries and the Division of Compliance collected fees and fines in the total amount of $1,054,446.46. NO. ACCOUNTS FEES INVOICED/BILLED COLLECTION 1. Activation Fees $51,000.00 $50,000.00 2. Annual Compliance Fees $485,000.00 $486,000.00 3. Non-Compliance Fees $538,352.30 $503,037.66 4. Late Reporting Fees $17,757.56 $15,408.80 TOTALS $ 1,092,109.86 $ 1,054,446.46 VIRGIN ISLANDS ECONOMIC 34 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 35 ECONOMIC DEVELOPMENT PARK CORPORATION The Virgin Islands Economic Development Park Corporation (“EDPC”), formerly known as the Industrial Park Development Corporation (“IPDC”), is chartered as a public corporation to acquire and operate industrial parks in the U.S. Virgin Islands and to complement the activities of the Virgin Islands Economic Development Authority (“USVIEDA”). Presently, two industrial parks fall under the auspices of the EDPC, the William D. Roebuck Industrial Park on St. Croix and the Virgin Islands Industrial Park on St. Thomas. The EDPC is solely funded by rental income generated from the tenants of the industrial parks. The WILLIAM D. ROEBUCK INDUSTRIAL PARK, located on St. Croix between the historic towns of Christiansted and Frederiksted, is the larger of the two individual parks. Situated on approximately 24 acres of property owned by the Virgin Islands Port Authority, this park consists of four (4) adjacent buildings totaling 146,680 square feet of commercial space. As of the end of Fiscal Year FY2019, 88 percent of the industrial park is occupied by various public and private entities. An additional 2,000 square feet of space is in lease negotiations. Three (3) tenants are beneficiaries of the Virgin Islands Economic Development Program that is administered in the Virgin Islands by the Economic Development Commission: Ocwen USVI Services LLC, Gold Coast Yachts Inc., and Leatherback Brewing Company LLC. Three (3) are Virgin Islands government agencies, the Virgin Islands Next Generation Network (ViNGN), the Virgin Islands Bureau of Corrections, and the Virgin Islands Department of Sports Parks and Recreation, and one (1) is a federal agency, the United States Federal Emergency Management Agency (FEMA). There are also two other businesses occupying space: Tropical Shipping and Construction Company Ltd. and Farmpod LLC. Additionally, the Economic Development Bank of the U.S. Virgin Islands Business Incubator and EDPC offices are located within the park. We are excited about the level of interest many different companies have shown in leasing the remaining space at this park. Upcoming Projects. We are also excited about upcoming capital improvement projects for the park on St. Croix, such as the Building No.1 and Building No. 3 Parking Lot Paving Projects, the Park Entrance Renovation, and the Park Energy Retrofit Project. The VIRGIN ISLANDS INDUSTRIAL PARK on St. Thomas, which consists of 20,000 square feet of commercial space, is located on a hillside just outside the bustling town of Charlotte Amalie and in the vicinity towards the Cyril E. King Airport. At the end of FY 2019, 75 percent of the total commercial space at the park remains occupied by four (4) businesses: Alliance Data Services LLC, United Electronics Industrial Services LLC, B. D. Specialty Inc. dba Billy D’s Special Tees, and Glass 2000 Inc. The remaining 5,000 square feet of space is in lease negotiations. Upcoming Projects. We are excited about upcoming capital improvement projects for the park on St. Thomas, such as the Park Landscaping Beautification Project and the Park Entrance Renovation Project. The EDPC also owns the historic FLEMING BUILDING located at No. 4 King Street in Frederiksted that houses the USVIEDA’s offices on St. Croix and one tenant. SunBug LLC dba Gecko Tours. This building was purchased in 2002. With the destruction caused by two Category 5 hurricanes to the Territory in the latter half of FY2017, the EDPC is faced with many challenges after sustaining damages to all its park’s facilities in September 2017, the last month of the Territory’s fiscal year. With the assistance of insurance proceeds and FEMA Public Assistance funds, the EDPC is looking forward to accessing these funds to make necessary repairs, renovations and improvements to modernize all the park facilities, as well as, “hardening” the park structures to make them more hurricane resistant. 36 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 37 Based on the economic needs of the territory, three (3) specific loan programs were selected: Collateral Support Program; Credit Guarantee Program; and the Payment, Surety, and Performance Bond Program. A fourth disbursement of $59,561 was received in January 2017. This amount represented the U.S. Virgin Islands’ apportioned allotment of residual funds from states and/or territories. This was a result of timely reporting and usage of funds by the EDB. Participating banks include Merchants Commercial Bank, First Bank Puerto Rico, Bank of Nova Scotia, and Banco Popular de Puerto Rico. As of September 30, 2019, the USVIEDA approved 43 loans to the participating banks for a total SSBCI guarantee support of $12,162,192 of which a total amount of $11,288,597 has been committed and/ or expended. The difference of $873,595 represents requests which were withdrawn after approval. The additional five (5) loans during this fiscal year totaled $1,061,900. The financing using the committed and/or expended funds $11,288,597 has the potential to create 220 jobs and retain 477 jobs. The jobs represent a broad cross-sector of industry types, and the core of the U.S. Virgin Islands economy, to include, health, tourism, hospitality, gasoline stations with mini- marts, construction, and retail. Participating banks in turn approved approximately $29,530,539.75 to businesses in the territory. This program has been successful to date as it allows for increased revenues to the territory’s local treasury from taxes and increased economic activity. An amount of $1,870,964 remains available for the participating lenders to use. Currently, there are three requests in the pipeline totaling $1,350,000. Sun Power Energy Loan Program Phase II – Virgin Islands Energy Office, as partner During FY 2019, ongoing discussions regarding Phase II implementation were held and processes were being developed. There are 306 loans remaining when compared to 384 (out of 818) with a balance of $91,231 to be paid off from Phase I when compared to $122,861 in FY2018. Other Economic Development Activities during FY 2019: • Participated in International Economic Development Council Annual Conference • Participated in Opportunity Zone meetings • Staff training conducted in Portfol and Lorman software platforms • Ongoing visits to small businesses within the community (St. Croix, St. Thomas, and St. John) • Participation in the St. Croix Agricultural Fair • Conducted presentations with the VISBDC, the U.S. Small Business Administration, and the Minority Business Development Association (MBDA) in an effort to maintain and increase public awareness about the EDB’s program and services • Attended presentations held by the VISBDC, U.S. SBA, Research and Technology Park (RTPark), the U.S. Department of Agriculture (USDA), or other private organizations within the community. The Economic Development Bank (EDB), an entity of the Virgin Islands Economic Development Authority (USVIEDA), serves to provide loans and offer technical and managerial assistance to small, local businesses to enhance employment opportunities and economic growth. The assistance is provided to small-business owners in conjunction with the Virgin Islands Small Business Development Center (VISBDC) which provides business counseling, coaching and instructions on how to prepare business plans. Loan Payments In fiscal year FY2019, loan payments totaled $649,665 which is a 15 percent increase over the amount of $550,086.82 in FY2018. The improvement in collections is due to increased collection efforts and the timely management and monitoring of the loan portfolio with access to Portfol (a specialized software to track and administer each loan in real time), collection agencies, and legal counsel. Loan Delinquencies The delinquency rate is 1.9 percent when compared to 24.5 percent in 2018. The EDB staff continues to aggressively collect on delinquent loans with the strong support of external legal counsel and collection agencies. Loan Transactions As of September 30, 2019, loan transactions total $2,526,707 compared to zero in FY2018. Of this amount, one (1) loan for an amount of $500,000 was declined due to the principals not meeting the eligibility criteria as set forth by the loan program. In FY2019, 160 inquiries (65 in the district of St. Croix and 95 in the district of St. Thomas-St. John) were received from potential and existing business owners regarding financing. The majority of the inquiries received were referred to the business’ bank (as the EDB is a lender of last resort), or to the VISBDC to assist these small-business owners with preparing their business plan. State Small Business Credit Initiative (SSBCI) Guarantee Program On September 27, 2010, President Barack Obama signed into law the Small Business Jobs Act of 2010 to help increase the availability of credit for small businesses. This Act created the State Small Business Credit Initiative (SSBCI) and appropriated $1.5 billion dollars to be used by the U.S. Department of the Treasury (“The Treasury”) to provide direct support to states for use in programs designed to increase access to credit for small businesses and small manufacturers. Pursuant to the Act, the Treasury allocated funds to 47 states along with its territories and the District of Columbia. Based on the allocation agreement dated October 4, 2011, the U.S. Virgin Islands was awarded $13,168,350, as a participating state, administered by the EDB. These funds were disbursed in three (3) increments as follows: $4,345,556 (33 percent); $4,345,555 (33 percent) and $4,477,239 (34 percent ). ECONOMIC DEVELOPMENT BANK 38 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 39 Shanell Petersen, Managing Director of Marketing and 2040 Vision, USVIEDA (far left); Denise C. Donadelle, Loan/Collection Officer, Economic Development Bank; Charlene Gerard Joseph, loan assistant, EDB; Shatima Charleswell, loan assistant, EDB; assemble Shop Small bags at the USVIEDA St. Thomas office to prepare for distribution to local small businesses on Small Business Saturday on November 21, 2018. -Photograph taken by Semele A. C. George/USVIEDA Kamal I. Latham, chief executive officer of the USVIEDA (second from the right); and Cusa Holloway, USVIEDA Incubator Program manager (center); are joined by Efrain Gonzalez, Jr., Associate Director for Business Development, MBDA, U.S. Dept of Commerce, Washington, DC (far left); Marie Gill, operator of M. Gill & Associates, Inc. and Desmond Alufohai, Senior International Trade Coordinator, Miami-Dade County & MEDWeek Co-Chair, as they accept the 2018 Disaster Recovery Advocate of the Year Award in Miami, FL, at the Intercontinental Hotel Miami on October 19, 2018. –Submitted photo Incubator Program Overview The Incubator Program is designed to help new and start-up businesses develop into full-fledged businesses by providing management training and other assistance enabling these businesses to grow and contribute to the economic development of the Territory. The program employs technical assistance tools such as one-on-one counseling, workshops, and seminars and collaborative relationships with economic development partners, such as the VI Small Business Development Center, to engage, support, and assist entrepreneurs to develop sustainable businesses within the Territory. In FY 2019, the Incubator Program was awarded a $50,000 grant from the USDA – Rural Business Development Program to purchase a generator for its space at the William D. Roebuck Industrial Park. This will ensure that services continue even during emergency situations. This Incubator Program also plans to expand its services by creating a food incubator on St. Croix. The Food Incubator will complement the Incubator Program and serve as a hub that provides resources to local food entrepreneurs so they can strengthen their businesses. The Food Incubator program’s overarching goal will be to develop and construct a state-of-the-art certified clean kitchen facility, with storage and classroom space for teaching and capacity building. This space will also be used as a production ground for value-added products that can be exported outside of the Territory, thus creating a sustainable export industry that can be expanded globally. To achieve this goal, the Incubator Program applied for a $50,000 grant from the U.S. Department of Agriculture-Rural Development Program to conduct a Food Incubator feasibility study on St. Croix. SUMMARY ECONOMIC DEVELOPMENT BANK • Loan Payments totaled approximately $650K • 1.9% loan delinquency rate • Loan transactions totaled $2.5M 40 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 41 The mandate of the Enterprise Zone Commission is to revitalize distressed communities within the Territory. Revitalization includes refurbishing buildings, strengthening businesses and uplifting residents of our towns and neighborhoods. There are many programs that have been implemented to accomplish this critical goal. The programs are all developed within the framework of the division’s strategic plan. In fiscal year FY2019, we successfully implemented the following: Strategic Plan Pillar I: Offerings & Opportunities. Utilizing the existing resources that already exists within the community and work towards improving them. This year, the division implemented three major programs within this Pillar. The first, Rejuvenation is a program where minor repairs and painting of four buildings were completed. This encourages occupancy or improve the quality of life for those who live within these buildings. One of the rejuvenated edifices was a long-row structure on the corner of Bjerge Gade and Regjerings Gade in the historic neighborhood of Savanne on St. Thomas, USVI. Careful selection of the buildings helps to encourage others to repair and paint their buildings. The second program completed in this pillar was the community surveys. In FY 2019, due to a staff shortage, surveys were completed only within the Garden Street/Upstreet Zone located on St. Thomas. In order to accomplish this goal, we work with students to assist in the surveying. After surveying over 970 buildings, we found that 53 percent of the buildings surveyed needed to be boarded up, rehabilitated or rejuvenated. Offerings and Opportunities not only addresses the repairing of buildings but also mandates that we assist residents of the community to get to the next steps and thrive as a result. In this regard our premier program is called EntrepreNow. FY2019 is the fourth year of the EntrepreNow program. This program, a collaboration between the USVIEDA, the Office of the Territorial Office of the Public Defender and a non-profit called Youth Arise focuses on young men ages 15 to 19 years old. Ultimately, the Gentlemen of EntrepreNow Territory-wide graduated once they were able to make a “Shark Tank” like presentations. Shark Tank is an entrepreneurial-themed reality show in which “sharks” - who are tough, self-made, multimillionaire and billionaire tycoons – search to invest in the best businesses and products that America has to offer. This year, nine Gentlemen graduated and two Gentlemen EntrepreNow returned for the pilot of our graduate program which focused on looking at the stock market. Strategic Plan Pillar II: Readiness and Resilience. The goal of this pillar is to prepare individuals and groups to be able to bounce back, whether that be from a natural disaster or from a personal disaster such as a death in the family. A main activity of this pillar is the Board-up Program which serves to prevent crimes of opportunity, accidental fires, etc. It also preserves the building until the owners can Members of Youth Arise, the USVIEDA’s Enterprise Zone Commission and the Gentlemen of EntrepreNow 2019 ENTERPRISE ZONE COMMISSION BEFORE AFTER 42 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 43 secure financing to fix the building. Many of the buildings that need boarding up have been identified by family members who have attempted to board up but could not. Strategic Plan Pillar III: Innovation and Enterprise. This is to promote, assist and encourage businesses to thrive and grow within our enterprise zones. In order to accomplish this goal the EZC in collaboration with the Virgin Islands Council of the Arts, opened the “Made in the USVI” Pop-Up Shop. In its first year, over 45 “small manufacturers and artisans” sold their products through the Pop-Up Shop. We have created a logo for the “Made in the USVI” brand and have ensured that the brand is of the best quality. The EZC will open Pop-Ups on the islands of St. Croix and St. John. The Enterprise Zone Commission received four applications that committed to $480,000 in investment in FY2019. The impact to the territory should be - if all of those funds are expended - $1.5 million in direct, indirect and induced investment to the total economic output in the territory and $574,000 in total value added to GTP. There are currently 20 EZC beneficiaries. As the EZC programs are largely supported by grant funding, this unit continues to apply for funds. In FY2019, the EZC managed $504,500 in grants from the Department of Interior, the U.S. Small Business Administration and the State Historic Preservation Commission. MARKETING AND PUBLIC RELATIONS INITIATIVE External Marketing and Public Relations Website Redesign: Redesigned the main website from a static, text heavy, and political look to a moving, visually- stimulating, and vibrant website reducing the clicks to find most viewed information. After conducting several focus groups with internal and external stakeholders and with the data analysis conducted through Google Analytics, the website was remapped and has begun to evolve with the times. As with technology and doing business online, it is a very rapidly moving environment. It is common to redesign a website every three years, while some economic development organizations (EDOs) are redesigning their website every 6 months. Website Highlights of FY2019 vs. FY2018: Visitors to the website increased by 33% • 45,617 (FY2019) vs. 34,176 (FY2018) 35% increase in new users • 45,470 (FY2019) vs. 33,678 (FY2018) 13.4 % 86.6 % October 1, 2018 - September 30, 2019 New Visitor Returning Visitor 44 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 45 www.USVIatTIFF.com To incentivize and promote the Sustainable Tourism through Arts-based Revenue Stream (STARS) Act for the music, film, theatre, arts and other arts-related investment in the Territory, the www.USVIatTIFF.com website was launched. It was paired with a visually captivating webpage, including members of the staff from varying departments at the Toronto International Film Festival. The Marketing/Vision 2040 Department supported attendees with marketing collateral in September of 2019. www.InvestUSVI.org (JumpSite) With the additional focus of the newly-developed Opportunity Zones, we began to develop a jump site at www.investusvi.org to directly send investors to the opportunity zone maps in the Territory and the QOZ promotional booklet created in partnership with the Office of the Governor. Marketing/2040 Vision staff coordinated and organized the co-sponsorship along with other USVIEDA staff members at the following events. • Director of Applications Margarita A.Benjamin and Marketing Director Shanell Petersen attended the Markets Group - Private Wealth Latin America & Caribbean Forum in Miami, Florida and met with leaders of family offices, wealth managers, RIAs, private banks and asset from Latin American and Caribbean region from October 15-18, 2018. • Americas Lodging Investment Summit (ALIS) January 2019, Los Angeles, California 2018 Website: Redesigned 2019 Website: Two (2) Website Launches and one (1) Upcoming Jumpsite www.InvestUSVirginIslands.com To attract and promote the VI Economic Development Commission Tax Incentive Program and the USVI as the best location to invest, the www.investusvirginislands.com website was launched. This site went live with supplemental promotional items at the CHRIS Conference in May 2019. It initially primarily focused on the hotel/hospitality industry with a compilation of 50+ commercial properties collected from the V.I. Port Authority, V.I. Dept of Property & Procurement, Public Finance Authority, realtors and realtor associations. 46 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 47 MARKETING MISSIONS AND CONFERENCES: ALIS Recap 2019 ALIS is the leading and largest hotel investment conference in the world. ALIS in January 2018 had nearly 3,000 attendees. ALIS features numerous networking opportunities and an extensive array of seminars and panels by hotel industry experts, who discuss important trends and identify new opportunities for the year ahead. USVIEDA Attendance: Shanell Petersen (Director of Marketing) Add-ons: Attendee list and contact info The Houston Family Office and High Net Worth Annual Conference, Houston, Texas: May 15 – 17, 2019. This event is part of the DC Finance’s Global Family Office and High Net Worth Individual Community that builds an international network of high-net-worth individuals, family offices, and investors for mutual growth and support through first-tier events worldwide. The organization invites select partners to seize the opportunity and interact with an exclusive group of senior Single Family Office and Multi- Family Office investment executives, private investors and family members. Each representative is personally invited and vetted by DC Finance. 2019 CHRIS Conference Loews Miami Beach Hotel, Miami, FL: Monday, May 20, 2019 thru Friday, May 24, 2019; The CHRIS conference is one of the Caribbean’s most noteworthy hotel investment conference that features excellent networking opportunities and an extensive array of sessions and panel discussions led by hotel and hospitality industry experts. (Left to right) Esther Joseph, VIEDC Applications Analyst; USVIEDA CEO Kamal I. Latham, and USVIEDA Marketing Director Shanell Petersen attend the 2019 CHRIS Conference Loews Miami Beach Hotel, Miami, FL. May 20, 2019 through May 24, 2019 -Submitted photo Caribbean Hotel and Resort Investment Summit (CHRIS) - Delegation to CHRIS in Miami, Florida from May 20-Friday, May 24, 2019, included members from the public and private sector in hospitality, including representatives from the Office of the Governor, USVIEDA, VI Port Authority, and VI Department of Planning and Natural Resources. -Submitted photo 2019 SelectUSA Summit, Washington, DC: June 10-12, 2019 Location: Washington, DC Host Hotel: Washington Hilton 1919 Connecticut Ave NW, Washington, DC 20009 USVIEDA Attendance: Kamal I. Latham – CEO Margarita Benjamin – Managing Director, Economic Development Shanell Petersen - Managing Director, Marketing and 2040 Vision (Left to Right): Kamal Latham, USVIEDA chief executive officer; Shanell Petersen, USVIEDA managing director, Marketing and 2040 Vision; and Margarita A. Benjamin, VIEDC Managing Director, Economic Development. -Submitted photo 48 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 49 Kamal Latham, USVIEDA CEO Essence Fest’s Global Black Economic Forum (GBEF) July 5-6, 2019 Latino Hotel Association July 23-24, 2019 The Latino Hotel Association is dedicated to serving those who want to learn, grow and succeed in the most exciting industry in the world of hospitality. They educate and nurture passionate individuals in the hospitality industry with a focus on growing Latino and Hispanic leaders. They are committed to expanding the community of Latino Hotel owners and operators. (Left to right) Shanell Petersen, managing director, USVIEDA Marketing and 2040 Vision; LaShanna McBean deChabert, Application Analyst, VIEDC; LHA business attendee; and Yolanda Bryan, Business Ambassador, USVIEDA. –Submitted Photo Location: DoubleTree Biscayne Bay, Miami, Florida USVIEDA Attendance: Shanell Petersen, Managing Director, Marketing and 2040 Vision Yolanda Bryan, Business Ambassador LaShanna McBean de Chabert, Applications Analyst, VIEDC Sponsorship Package Details: Sponsorship Package Details: 3-5 minute speaking part by Shanell Petersen on tax incentives and hotel and resort opportunities, booth, and Luncheon sponsor USVIEDA CEO Kamal Latham from the U.S. Virgin Islands joined seasoned business moguls and inspiring entrepreneurs at ESSENCE Festival’s first Annual Global Black Economic Forum on Friday July 5th at the Contemporary Arts Center (CAC) in New Orleans during the 25 th Anniversary of the ESSENCE Festival. Mr. Latham was part of the panel, “Empowering our Community to Overcome Multigenerational Financial Inequality”. The forum also featured T.D Jakes, TDJ Enterprises CEO; and Ram Palaniappan, Founder, Earnin. 50 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 51 The 23rd Annual International African American Hotel Ownership & Investment Summit & Trade Show, Miami, Fl, July 24-26, 2019 Presented by the National Association of Black Hotel Owners, Operators & Developers (NABHOOD), Black Meetings & Tourism Magazine and Horizons International Group, this three-day summit was designed to educate attendees on becoming a hotel owner or investor, share minority investment trends, explore supplier opportunities, learn how to market to minorities and discuss diversity issues affecting the industry. Summit attendees include African American hoteliers, entrepreneurs, national leaders and hospitality representatives, city/state/country development representatives and financial experts like financial experts. Industry professionals will lead general sessions, workshops and seminars to spark discussion on African American hotel ownership, public/private partnerships, financing, franchising, investment opportunities, creating partnerships, employment & supplier opportunities. Location: Miami Marriott Biscayne Bay, Miami, Florida (Left to right) Yolanda Bryan, Business Ambassador, USVIEDA; LaShanna McBean deChabert, Application Analyst, VIEDC; NABHOOD business attendee; and Shanell Petersen, Managing Director, USVIEDA Marketing and 2040 Vision –Submitted Photo USVIEDA Attendance: Shanell Petersen, USVIEDA Managing Director, Marketing and 2040 Vision Yolanda Bryan, USVIEDA Business Ambassador LaShanna McBean de Chabert, VIEDC Applications Analyst Sponsorship Package Details: • 7-minute speaking part by Shanell Petersen during Panel on Investment & Development Opportunity: Representatives from countries, cities & companies highlighted development & investment opportunities currently available and how to participate. • 15-minute presentation by Mrs. Petersen on the following title “Investment & Bussiness Opportunities In The U.S. Virgin Islands” with about 10-15 attendees with interest in investing in the Territory. (Left to right) LaShanna McBean deChabert, Application Analyst, VIEDC; Shanell Petersen, Managing Director, USVIEDA Marketing and 2040 Vision; Commissioner Joe Boschulte, USVI Department of Tourism; and Yolanda Bryan, Business Ambassador, USVIEDA –Submitted Photo 52 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 53 National Association of Black Journalists (NABJ) During the NABJ Annual Conference, USVIEDA was featured at all DOT events and speaking opportunities and Managing Director Petersen interviewed with Louisianabased reporter on investment opportunities and the story of the USVI as America’s Business Paradise. Video link: https://youtu.be/OBabx8WsruU USVIEDA’s 2019 Investor Forum held on June 13-15, 2019 Hosted the SelectUSA Investment Summit spin-off event. (Far Left) EDC Beneficiary Fintrac, Owner, Claire Starkey meets with investors and Nadine Marchena Kean, Managing Director, USVIEDA’s Enterprise Zone Commission. – Submitted photo Investors conversing at the Public Finance office on Government Hill prior to presentation by the Office of the Governor during the USVI Investor Forum. - Submitted photo (Center) Scott Newland, Newland Real Estate USVI; during site visit at Mahogany Run Golf Course with investors during the USVI Investor Forum. Investors dining at Tramway Properties, a VIEDC Beneficiary, open-aired Paradise Point during presentation by local partners, VI Port Authority and University of the Virgin Islands. -Submitted photo Semele George, USVIEDA marketing and PR specialist (seated at the table in front) and presenter Anise Hodge, VIPA Deputy Director, delivering a presentation on investment opportunities within VIPA’s portfolio 54 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 55 ADDITIONAL CONFERENCES USVIEDA TEAM PARTICIPATED AND/OR CO-SPONSORED: NAWRB Annual Conference: August 4-6, 2019 Gateway Conference Location: New Orleans, Louisiana September 4-6, 2019 This is the Gulf South’s premier annual business conference for corporations, government, nonprofits, and minority business enterprises. This two-day event draws hundreds from across the United States to New Orleans, Louisiana, providing a venue for thought-provoking discussion, relevant training, efficient matchmaking and recognition of the region’s first in class businesses. NATIONAL PUBLICATIONS AND ADS (DIGITAL AND/OR PRINT) Including 2019 NBA All-Star, NHL All-Star game, and additional publications below, including Super Bowl, and FDI Alliance International. A few additional national and international publications and online radio ads included: COMMUNICATIONS: General Media Inquiries (Not related to Jeffrey Epstein): Twenty-six inquiries were received from the following: five (5) publications and four (4) reporters. Publications: VI Consortium, The Virgin Islands Daily News, The Source, The St. Croix Avis, and The New York Times. Jeffrey Epstein Media Inquiries: Twenty-nine total inquiries were received from the following: eight (8) publications, two (2) television stations and fourteen (14) reporters and investigative journalists. Publications: The Source, Virgin Islands Daily News, VI Consortium, Bloomberg News, Business Insider, The New York Times, Miami Herald, The Wall Street Journal, and McClatchy News Television: NBC News, ABC News In addition, three (3) interviews were conducted for the New York Times by Steve Eder on behalf of Matthew Goldstein, Wall Street Journal by Rebecca O’Brien, and Bloomberg News (Miami) by Jonathan Levine. Total FY 2019 Media Inquiries: 55 Communication Crisis: Due to the communication crisis, Marketing and Vision 2040 staff created a media response clearance protocol. This development has since been used for other crises that have occurred within the year. LEAD GENERATION: With the creation of a new position, Program Manager of Marketing and Vision 2040, an internal team member was promoted from another unit within the USVIEDA. Managing Director Petersen and Managing Director, Margarita A. Benjamin-Greenidge developed a Lead Generation Program to NEWSWIRE PRESS RELEASE ONLINE DISTRIBUTION: Over 400 publications 56 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 57 Internal Marketing and Public Relations Managing Director Petersen and/or staff attended or coordinated the following activities: • Managing Director Petersen attended the Taste of Flavors and met with local residents to increase awareness of the programs and services available for the community and small -business owners. • Taste of Two Islands • Managing Director Petersen and members of the internal Economic Strategic Taskforce continued to work on securing the all needs of the grants with VIHFA and USEDA. Due to delays in securing the funding, a timeline for the completion of the 20-year economic development vision plan is not set. • Managing Director Petersen and staff coordinated co-sponsorship of the Paradise Jam, which included a national ad. • Managing Director Petersen and staff along with others coordinated the co-sponsorship of DreamsFest, CrucianFest, St. Thomas Carnival, St. John Carnival, AgriFest, Taste of St. Croix, Women Striving for Success • Launched local campaign, “Made in the USVI Pop-up Shop”, to promote 25+ locally-owned manufacturers and artisans in a brick and mortar on Waterfront in the I. Levin Building on St. Thomas. A campaign that included social media and guerrilla marketing, while still relying heavily on radio saturation. This campaign lasted for roughly 6 months with varying events such as: Meet Local Authors Event and Children’s Storytelling Beauty and Spa mini-campaign highlighting body, hair and overall self-care products in the store including a live demonstration from one of the local manufacturers. Valentines’ Day Extravaganza! • Marketing and Vision 2040 staff executed media plan for the Annual Open House on Food Fair Day, May 1, 2020 at E’s Garden Teahouse & Things where the USVIEDA staff met local residents and connected with business owners on their needs and how USVIEDA programs and services fit into the solution, while promoting locally-owned businesses in the Accelator and STEP program through the Enterprise Zone Commission. which Kyle Thomas, Program Manager, Marketing and Vision 2040, oversees. Investment lead generation is a top priority for attracting corporate investment into the USVI through participation in the VIEDC program. Investment lead generation en- compasses a series of activities which include: research, identifying companies, qualifying companies, and contacting and building relationships with companies that have the potential to expand or relocate to the U.S. Virgin Islands. In building internal capacity, Program Manager, Marketing and 2040 Vision will be a key team member in managing the Lead Generation program. In addition to the efforts of the Program Manager, Marketing and 2040 Vision, lead generation contractors will be recruited to provide qualified leads at maximum set cost per firm/individual. Within the lead generation program includes an SOP, lead generation qualifiers, a detailed flowchart from introduction to application, and a nurture cycle as seen below: Lead Generation Standard of Protocol (SOP): 1 Initial Contact 2 Initial Email 3 Welcome Email 4 Schedule Conference Call 5 Conference Call 6 Site Visit 7 Follow Up Email 8 Pre- Application Meeting 9 Submit Application Client Retention Cycle Begins Generate Conferences Marketing Mission Lead Generation Contractors Digital Sources References Direct Outreach Capture CRM & CEO Executive Report Qualify Hot Project Active Lead Soft Lead Prospect Nurture Email Telephone Videoconference Site Visit Follow up Networking Pre- Application Meeting Measure CEO Exec Report 58 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 59 Radio Commercial Sponsorship, Advertisements, and Coverage: • “Why Didn’t I Think of That?” – WSTA 1340AM • Announcement of the USVIEDA as a Neighborhood Champion of Small Business Saturday • Viewing and voting of Savanne-Downstreet Community Plan • Live paid broadcast on WSTA 1340AM of the USVIEDA Open House at E’s Garden Teahouse and Things during Virgin Islands Carnival Food Fair on St. Thomas • Live paid broadcast by WSTA 1340AM of the EZC Made in the USVI Pop-Up Shop • Live paid broadcast by WLDV 107.9 FM – DaVybe “of the EZC Made in the USVI Pop-Up Shop • Just Us Interview with CEO Kamal I. Latham • Monday’s Economic Roundtable Business Forum Show: with CEO Kamal I. Latham • ‘The Morning Show with Addie Ottley” & “The Morning Mix with Liston Davis”Show with Managing Director Nadine Marchena Kean on the “Made in the USVI” Pop-Up Shop • “The Morning Show with Addie Ottley” with CEO Latham and Marketing Managing Director Petersen on USVIEDA Updates Television Coverage: • TV2 Interview with CEO Kamal Latham during the 2018 Beneficiary Summit • Interviews by reporters Kellie Meyer and April Fale-Knight with Director Enterprise Zone Commission, Nadine Marchena Kean, at the Made in the USVI Pop-Up Shop • CBS USVI News Interview by reporter Kellie Meyer with CEO Kamal I. Latham on Economic Impact Analysis Major News Stories (Virgin Islands Daily News, St. Croix Avis, VI Consortium, The Source, Caribbean Journal): • “USVIEDA Officials to lead Delegation of VI Entrepreneurs to NY Now Tradeshow” • “EDA Rallies USVI Community to Support Small Local Business at Shop Small Rally” • “EDA receives $50K grant from US Department of Agriculture” • “6 Young Men Graduate from Enterprise Zone Commission Summer Entrepreneurship Program (EntrepreNow)” • “Rising with Resilience: How the U.S. Virgin Islands is Telling the World it is Open for Business” • “The Fred is named Top 7 Locations to Visit by Caribbean Journal” • “Territory to be part of Video Advertising in Times Square, New York, EDA Says” • “‘Made in the USVI’ Pop-Up Store Aims to Inspire Residents, Visitors to ‘Buy Local’ for the Holidays” Print Advertisements: • Enterprise Zone Commission Open House held during the Virgin Islands Carnival Food Fair on St. Thomas • Post-Disaster Relief Revolving Loan Program at the Economic Development Bank • Viewing and voting of the Savanne-Downstreet Community Plan by the Enterprise Zone Commission SOCIAL MEDIA: Twitter Highlights: • 123,352 Impressions and 155 new followers. Averaging a tweet every other day for 180+ tweets for the year. Facebook and Instagram Highlights: - Facebook followers increased by 618% from 76 followers to 546 followers. Facebook Page Reach was 54,541. - Instagram Followers were 57.2% Women and 42.8% men. Instagram Reach : 4,859. - Total Paid Reach: 37,302. 60 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 61 US VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY (A Component Unit of the Virgin Islands Government) CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 2019 Together With Independent Auditor’s Report BERT SMITH & CO. CER llFIED PUBLIC ACCOUNTANTS 6< MANAGEMENT CONSULTANTS www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 63 62 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 63 VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY (A Component Unit of the Virgin Islands Government) CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2019 TABLE OF CONTENTS Independent Auditor’s Report....................................................................................................................1 Management’s Discussion and Analysis....................................................................................................4 Basic Consolidated Financial Statements Consolidated Statement of Net Position..............................................................................................10 Consolidated Statement of Revenues, Expenses, and Changes in Net Position.................................11 Consolidated Statement of Cash Flows...............................................................................................12 Notes to the Basic Consolidated Financial Statements........................................................................13 Required Supplementary Information Consolidated Schedule of the Proportionate Share of Net Pension Liability.......................................29 Consolidated Schedule of Contributions…………………………………………………………….30 Consolidated Schedule of the Proportionate Share of Net OPEB Liability…………………………31 Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards......................................................................32-33 Summary Schedule of Prior Year Audit Findings……………………………………………………….34 Other Supplementary Information Consolidated Combining Schedule of Net Position.............................................................................35 Consolidated Combining Schedule of Revenues, Expenses, and Changes in Net Position..................36 I 1'111 !1111'11)811 11.1 1 1 ,1 rt 11-\l ll\ '1."-11.,,1/,ll!Jl<••ll',llll,\f!I I 090 VC'rmont Av<'m1c, NW )llltt' t50 Washmgton, DC 20005 PO Box 2478 K111g1l 1111, VI 0085 1 200 [ Pr€tl Strf'el Swte 4100 Bc1lt11nore, MD 2120/. INDEPENDENT AUDITOR'S REPORT Board of Directors Virgin Islands Economic Development Authority St. Thomas, U.S. Virgin Islands Report on the Financial Statements We have audited the consolidated accompanying statement of net position of the Virgin Islands Economic Development Authority (the "Authority") and its wholly owned subsidiary Economic Development Park Corporation, a component unit of the Government of the U.S. Virgin Islands, as of and for the year ended September 30, 2019 and the related statement ofrevenues, expenses, and changes in net position and cash flows for the year then ended and the related notes to the consolidated financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an op1111on on these consolidated financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including, the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments; the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. BERT SMITH & CO. CER llFIED PUBLIC ACCOUNTANTS 6< MANAGEMENT CONSULTANTS www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 65 64 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 65 Opinion In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Authority as of September 30, 2019, and the respective changes in net position and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the consolidated financial statements, the consolidated financial statements present only the Authority’s financial position and the changes in financial position and cash flows and do not purport to, and do not, present fairly the financial position of the Government of the U.S. Virgin Islands as of September 30, 2019 and changes in the financial position of the Government of the U.S. Virgin Islands for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Report on Comparative Information We have previously audited the Authority’s September 30, 2018 consolidated financial statements, and our report dated, October 28, 2019, expressed an unmodified opinion thereon. In our opinion, the comparative information presented herein as of and for the year ended September 30, 2018, is consistent, in all material respects, with the audited consolidated financial statements from which it has been derived. Required Supplementary Information Accounting principles generally accepted in the United States require that the management’s discussion and analysis information on pages 4 through 9 and the Schedule of Proportionate Share of the Net Pension Liability, Schedule of Contributions and Schedule of Proportionate Share of OPEB Liability on pages 29 through 31 be presented to supplement the basic financial statements. Such information, although not a part of the basic consolidated financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of the financial reporting for placing the basic consolidated financial statement in an appropriate operational, economic, or historic context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic consolidated financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming an opinion on the Authority’s basic consolidated financial statements. The other supplementary information listed in the accompanying table of contents on pages 35-36 is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic consolidated financial statements. Such infom1ation has been subjected to the auditing procedures applied in the audit of the basic consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the other supplementary infom1ation is fairly stated in all material respects in relation to the basic consolidated financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our repo1t dated January 15, 2021 on our consideration of the Authority's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the internal control over financial reporting or on compliance. That repo1t is an integral part of an audit perfonned in accordance with Government Auditing Standards in considering the Authority's internal control over financial reporting and compliance. t-  St. Croix, U.S. Virgin Islands January 15, 2021 66 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 67 VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY (A Component Unit of the Virgin Islands Government) MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) FOR THE YEAR ENDED SEPTEMBER 30, 2019 INTRODUCTION The Virgin Islands Economic Development Authority (the “Authority”) is a semi-autonomous government instrumentality responsible for the promotion and enhancement of economic development in the U.S. Virgin Islands. The Authority is the umbrella organization that assumes, integrates, and unifies the functions of the following subsidiary entities: the Economic Development Bank (“EDB”), the Economic Development Commission (“EDC”), the Economic Development Park Corporation (“EDPC”), and the Enterprise Zone Commission (“EZC”). The Authority operates under one Governing Board (“Board”) in order to achieve maximum efficiency of operation to avoid duplication of services, positions, and responsibilities; to reduce expenses of personnel, physical plant, and operations; and to develop comprehensive programs for the economic development of the U.S. Virgin Islands. The Authority is funded primarily by allotments through the Office of Management and Budget via the Department of Finance based on an approved budget authorized by the Legislature of the Virgin Islands. As management of the Authority, we offer the readers of the Authority’s consolidated financial statements this narrative overview and analysis of the financial activities of the Authority for the year ended September 30, 2019. We encourage readers to consider the information presented here in conjunction with the Authority’s consolidated financial statements. This overview and analysis are required by accounting principles generally accepted in the United States of America (“GAAP”), and the Governmental Accounting Standards Board (“GASB”) Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Government. VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY (A Component Unit of the Virgin Islands Government) MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) FOR THE YEAR ENDED SEPTEMBER 30, 2019 OVERVIEW OF THE FINANCIAL STATEMENTS The consolidated financial statements consist of four parts: management’s discussion and analysis, the financial statements, notes to the financial statements, and supplementary schedules. The Authority is a component unit of the Government of the U.S. Virgin Islands and follows enterprise fund reporting. The consolidated financial statements, therefore, are presented in a manner similar to that of a private business, using the economic resources measurement focus and the accrual basis of accounting.  The Consolidated Statement of Net Position: This statement includes all of the Authority’s assets, deferred outflows of resources and deferred inflows of resources, and liabilities. It provides information about the nature and amounts of investments in resources (assets) and the obligations to creditors (liabilities). The assets and liabilities are presented in order of liquidity. The resulting net position presented in these statements is displayed as restricted or unrestricted.  The Consolidated Statement of Revenues, Expenses, and Changes in Net Position: All of the current year’s revenues and expenses are accounted for in the Statement of Revenues, Expenses, and Changes in Net Position. This statement measures the activities of the Authority’s operations over the past year and can be used to determine whether the Authority has successfully recovered all of its costs through appropriations and the services it provided.  Statement of Cash Flows: The primary purpose of this statement is to provide information about the Authority’s net cash used in operating activities, capital and related financing activities, and provide information regarding the sources and uses of cash and the changes in the cash balance during the reporting period.  Notes to the Financial Statements: The notes to the consolidated financial statements provide additional information that is essential to the full understanding of the data provided in the financial statements.  Supplementary Schedules: The Authority’s fund consolidated financial statements are presented as supplementary schedules. These schedules separate the consolidated financial statements and operations for each of the major funds. 2019 FINANCIAL HIGHLIGHTS • The Authority’s net position (deficit) increased by $495,075 or 6.14% compared to fiscal year 2018. • The Authority’s total assets and deferred outflow of resources decreased by $761,410 or 2.06%. • Total liabilities and deferred inflows of resources decreased by $266,335 or .59% compared to fiscal year 2018. • The Authority’s operating revenues increased by $590,540 or 29.59% and operating expenses decreased by $1,165,421 or 11.41% compared to fiscal year 2018 due to a reduction in losses associated with non-operating loans and receivables. • Government appropriations increased by $876,992 or 18.28% compared to fiscal year 2018. 68 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 69 VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY (A Component Unit of the Virgin Islands Government) MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) FOR THE YEAR ENDED SEPTEMBER 30, 2019 Condensed Consolidated Statements of Net Position as of September 30, 2019 and 2018 2019 2018 Variance % Variance Assets Current Assets $12,946,999 $11,412,366 $ 1,534,633 13.45% Noncurrent Assets 17,711,710 17,775,033 (63,323) -.36% Capital Assets, net 1,170,014 1,242,328 (72,314) -5.82% Total Assets 31,828,723 30,429,727 1,398,996 4.60% Deferred Outflows of Resources 4,394,391 6,554,797 2,160,406 -32.96% Total Assets and Deferred Outflows of Resources $36,223,114 $36,984,524 $ (761,410) -2.06% Liabilities Current Liabilities $13,828,630 $14,589,169 $ 760,539 -5.21% Noncurrent Liabilities 27,249,839 28,113,554 863,715 -3.07% Total Liabilities 41,078,469 42,702,723 1,624,254 -3.80% Deferred Inflows of Resources 3,707,616 2,349,697 1,357,919 57.79% Total Liabilities and Deferred Inflows of Resources $44,786,085 $45,052,420 $ (266,335) -.59% Net Position Net Investment in Capital Assets $ 1,170,014 $ 1,242,328 $ (72,314) -5.82% Restricted 16,532,952 16,570,721 (37,769) -.23% Unrestricted (26,265,937) (25,880,945) (384,992) 1.49% Total Net Position $ (8,562,971) $ (8,067,896) $ (495,075) 6.14% CURRENT ASSETS Current assets are used to support the Authority’s operations and include cash and cash equivalents, net accounts receivables (primarily receivables from rentals and beneficiaries, and accrued interest receivable), short-term investments, and prepaid expenses. In Fiscal Year 2019, the Authority’s current assets increased by $1,534,633 or 13.45%. This includes an increase in cash and cash equivalents of $1,780,526 or 18.07% due to increases in the government allotment and cash flow from the operations of the Economic Development Park Corporation (EDPC) and the Economic Development Commission (EDC) Program. There were also increases in prepaid and other assets of $55,547 or 77.39% and investment of $6,547 or 0.70%. The total of these increases was offset by a decrease of $307,987 or 55.93% in net account receivables as the Authority increased overall collection and established an allowance for accounts that were deemed uncollectible. VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY (A Component Unit of the Virgin Islands Government) MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) FOR THE YEAR ENDED SEPTEMBER 30, 2019 NONCURRENT RESTRICTED ASSETS Noncurrent assets decreased by $63,323 or .36% compared to last fiscal year. This was mainly due to the net effect of a reduction in loan receivables (net allowance for doubtful accounts) of $297,030 or 10.48% and an increase in cash and cash equivalents of $200,901 or 2.10% that resulted from EDB borrowers paying off their loans before maturity. Additionally, there was also an increase in restricted investments of $32,806 or 0.61%, which represents interest earned on long-term investments held at local financial institutions in the form of Certificates of Deposit. CURRENT LIABILITIES Current liabilities decreased by $760,539 or 5.21% from Fiscal Year 2018 to Fiscal Year 2019. This reduction was primarily due to the Authority paying down its vendor, contractual, and payroll obligations by the end of the fiscal year. Contributing to this decline was a reduction in the current portion of compensated absences that resulted from the Authority continuing to manage its compensated absence policy effectively. Conversely, deferred revenues increased by $70,332 or 0.54%, which reflects grant funds received for the State Trade Expansion and Incubator Rural Business Development Grant Programs that had not been expended by the end of the fiscal year. NONCURRENT LIABILITIES The Authority’s noncurrent liabilities are substantially comprised of long-term debt, net pension liability, other long-term liabilities accrued for post-employment and post-retirement benefits (OPEB), and compensated absences. During Fiscal Year 2019, noncurrent liabilities decreased by $863,715 or 3.07% due to the cumulative effect of: • A reduction of $1,490,390 or 6.02% in the Authority’s proportionate share of the net pension liability in the U.S. Virgin Islands’ Government Employees Retirement System (GERS). The Governmental Accounting Standards Board (GASB) Statements No. 68 and 75 require governmental employers participating in multi-employer cost-sharing pension and healthcare benefit plans to recognize liabilities for their proportionate share of the unfunded liability for plans whose actuarial liabilities exceed the plan’s net assets. As required by the U.S. Virgin Islands statute, all eligible employees of a qualifying employer must be a member of the Government Employees Retirement System (GERS). The reduction represents the adjustment made to record the Authority’s share of the GERS’s unfunded liability obligation for Fiscal Year 2019. • A reduction of $25,460 or 10.66% in long-term debt, representing debt repayments made throughout the fiscal year on the Intermediary Relending Program (IRP) loan. • A decrease in security deposits of $6,666 or 9.20% mainly due to returning a security deposit to a tenant that vacated the Economic Development Park. • An increase in long term compensated absences of $34,100 or 16.52% due to the reclassification of employee accrued leave earned from current compensated absences to long-term compensated absences. 70 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 71 VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY (A Component Unit of the Virgin Islands Government) MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) FOR THE YEAR ENDED SEPTEMBER 30, 2019 • An increase in deferred revenue of $624,701 or 66.50% mainly due to funds received from the Government of the Virgin Islands (GVI) for energy-efficient retrofits at the William D. Roebuck Industrial Park on St. Croix and State Trade Expansion and Incubator Rural Business Development Grant Programs that had not been expended by the end of the fiscal year. NET POSITION Net position represents the residual interest in the Authority’s assets and deferred outflows of resources after all liabilities and deferred inflows of resources are deducted for reporting purposes and are divided into three major components: • Net Investment in Capital Assets • Restricted Net Position • Unrestricted Net Position The Authority’s total net position (deficit) increased by $495,075 or 6.14% during Fiscal Year 2019. This was due to the net effect of decreases in net investment in capital assets of $72,314 or 5.82% and unrestricted net position of $384,992 or 1.49% as total expenses exceeded total revenues for the fiscal year. Condensed Consolidated Statements of Revenues, Expenses, and Changes in Net Position for the Years Ended September 30, 2019 and 2018 2019 2018 Variance % Variance Operating Revenues $ 2,586,149 $ 1,995,609 $ 590,540 29.59% Operating Expenses (9,051,490) (10,216,911) 1,165,421 11.41% Operating Loss (6,465,341) (8,221,302) 1,755,961 21.36% Net Non-operating Revenues 5,970,266 5,014,302 955,964 19.06% Changes in Net Position (495,075) (3,207,000) 2,711,925 84.56% Net Position, Beginning of Year (8,067,896) (4,860,896) (3,207,000) 65.98% Net Position, End of Year $ (8,562,971) $ (8,067,896) $ (495,075) 6.14% OPERATING REVENUES Operating revenues increased by $590,540 or 29.59% compared to last fiscal year. This increase was primarily driven by increases in EDC penalties and EPDC rental income. EDC penalties increased by $253,542 or 87%. Rental income from EPDC tenants increased by $331,182 or 56.61%. In Fiscal Year 2018, many of the Parks’ tenants received rental abatements for approximately the first quarter of the fiscal year due to the damages sustained to their leased spaces directly following the two category 5 hurricanes, Irma and Maria. There were also notable increases in application and processing fees of $91,050 or 18.56% due to a rise in EDB and EDC applications, and grant revenues of $78,756 or 92.35% to assist small businesses with export development and to purchase and install a generator for the Incubator Office Space. However, these increases were offset by reductions in penalties assessed to EDC beneficiaries of $155,583 or 53.18%, interest income of $83,301 or 46.11%, and other operating income of $94,916 or 26.26% due to collection on accounts that have been previously written off as bad debt. VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY (A Component Unit of the Virgin Islands Government) MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) FOR THE YEAR ENDED SEPTEMBER 30, 2019 OPERATING EXPENSES Operating expenses declined by $1,165,421 or 11.41% compared to last fiscal year. The changes in operating expenses are primarily due to a significant reduction of $882,102 or 90.81% in loan losses and uncollectible receivables, a sharp decline of $215,277 or 27.71% in professional services due to the expiration of a lead generation and marketing contract, and a reduction in inter-island travel costs totaling $15,491. Conversely, occupancy costs rose by $26,534 or 9.21% based on the rental agreement with the Nisky Shopping Center office space in St. Thomas, and advertising costs increased by $113,880 or 35.30% due to additional marketing activities undertaken by the Authority. NON-OPERATING REVENUES AND EXPENSES Non-operating revenues are revenues received from activities not related directly to a business core operations. For example, appropriations from the Government of the Virgin Islands are non-operating revenues because appropriated funds are those controlled by Legislature through the general or special appropriation process and are designated for specific purposes. Without non-operating revenues, the Authority would not be able to cover its costs of operations. This funding is critical to the Authority’s financial stability and directly impacts the quality of its programs. The Authority’s non-operating revenues for Fiscal Year 2019 exceeded those of Fiscal Year 2018 by $955,964 or 19.06%. This is mainly attributed to an increase of $876,992 or 18.28% in government allotments that were appropriated to fund energy retrofits at the William D. Industrial Park on St. Croix, support the operations of the Incubator Program, and complement the Authority’s marketing budget. CAPITAL ASSETS At September 30, 2019, the Authority had $1,170,014 invested in capital assets. Increases during the year represent additions to those categories, while accumulated depreciation decrease represents retirements of assets during the year and depreciation of depreciable assets for the year. Capital Assets at Year-end Net of Accumulated Depreciation 2019 2018 Building & Building Improvements $ 9,508,842 $ 9,355,407 Leasehold Improvements 867,890 867,890 Equipment 1,283,111 1,186,915 Furniture & Fixtures 513,973 513,973 Vehicles 469,145 469,145 Leasehold Equipment 20,585 20,585 Total Costs 12,663,546 12,413,915 Less: Accumulated Depreciation (11,493,532) (11,171,587) Net Capital Assets $ 1,170,014 $ 1,242,328 72 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 73 VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY (A Component Unit of the Virgin Islands Government) CONSOLIDATED STATEMENT OF NET POSITION AS OF SEPTEMBER 30, 2019 (With Comparative Totals for 2018) 2019 2018 ASSETS AND DEFERRED OUTFLOWS OF RESOURCES Current Assets: Cash and Cash Equivalents $ 11,635,065 $ 9,854,539 Investments 941,936 935,389 Other Receivables, net 242,674 550,661 Prepaid and Other Assets 127,324 71,777 Total Current Assets 12,946,999 11,412,366 Noncurrent Restricted Assets: Restricted Cash and Cash Equivalents 9,788,426 9,587,525 Restricted Investments 5,384,871 5,352,065 Restricted Loans Receivable, net 2,538,413 2,835,443 Total Noncurrent Restricted Assets 17,711,710 17,775,033 Capital Assets, net 1,170,014 1,242,328 Total Assets 31,828,723 30,429,727 Deferred Outflows of Resources 4,394,391 6,554,797 Total Assets and Deferred Outflows of Resources $ 36,223,114 $ 36,984,524 LIABILITIES AND DEFERRED INFLOWS OF RESOURCES Current Liabilities: Accounts Payable $ 470,474 $ 1,230,057 Accrued Expenses 2,394 63,300 Compensated Absences 183,141 190,884 Interest Payable 18,245 20,790 Deferred Revenue 13,128,487 13,058,155 Loan Payable, current 25,889 25,983 Total Current Liabilities 13,828,630 14,589,169 Noncurrent Liabilities: Compensated Absences 240,506 206,406 Security Deposits 65,792 72,458 Deferred Revenue 1,564,106 939,405 Relief Revolving Funds 400,000 400,000 Loan Payable 213,464 238,924 Net Pension Liability 24,765,971 26,256,361 Total Noncurrent Liabilities 27,249,839 28,113,554 Total Liabilities 41,078,469 42,702,723 Deferred Inflows of Resources 3,707,616 2,349,697 Total Liabilities and Deferred Inflows of Resources $ 44,786,085 $ 45,052,420 NET POSITION Net Position: Net Investment in Capital Assets $ 1,170,014 $ 1,242,328 Restricted Net Position 16,532,952 16,570,721 Unrestricted Net Position (26,265,937) (25,880,945) Total Net Position $ (8,562,971) $ (8,067,896) The accompanying notes are an integral part of these consolidated financial statements. VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY (A Component Unit of the Virgin Islands Government) CONSOLIDATED STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2019 (With Comparative Totals for 2018) 2019 2018 Operating Revenues: Application and Processing Fees $ 581,700 $ 490,650 Rental Income 916,164 584,982 Interest Income from Loans 97,349 180,650 Grant Revenue 164,038 85,282 Fees and Fines 560,337 292,568 Other Operating Revenue 266,561 361,477 Total Operating Revenues 2,586,149 1,995,609 Operating Expenses: Personnel Costs 6,217,145 6,202,940 General and Administrative 948,885 1,176,603 Occupancy 314,682 288,148 Advertising 436,445 322,565 Professional Services 561,572 776,849 Travel 53,618 69,559 Grant Expenditures 114,038 85,282 Loan Losses - 672,807 Uncollectible Receivables 83,161 232,456 Total Operating Expenses 8,729,546 9,827,209 Operating Loss Before Depreciation (6,143,397) (7,831,600) Depreciation (321,944) (389,702) Operating Loss (6,465,341) (8,221,302) Nonoperating Revenues (Expenses): Government Appropriations 5,674,499 4,797,507 Interest Income 83,360 77,279 Other Income 215,317 141,770 Interest Expenses and Finance Charges (2,910) (2,254) Total Nonoperating Revenues 5,970,266 5,014,302 Changes in Net Position (495,075) (3,207,000) Net Position, Beginning of the Year (8,067,896) (4,860,896) Net Position, End of Year $ (8,562,971) $ (8,067,896) The accompanying notes are an integral part of these consolidated financial statements. www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 75 74 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 75 VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY (A Component Unit of the Virgin Islands Government) CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED SEPTEMBER 30, 2019 (With Comparative Totals for 2018) The accompanying notes are an integral part of these consolidated financial statements. 2019 2018 Cash Flows from Operating Activities Cash Received from Application and Processing Fees $ 554,036 $ 490,650 Cash Received from Tenants 846,131 581,218 Cash Received from Loan Repayments 724,842 445,961 Cash Received from Other Operating Income 1,221,277 690,852 Cash Received from Federal Government 164,038 85,282 Cash Paid for Grant Programs (114,038) (85,282) Cash Paid for Goods and Services (2,231,860) (2,058,626) Cash Paid to Employees for Services (4,215,567) (3,926,018) Loan Disbursements (540,000) (29,158) Net Cash (Used in) Provided by Operating Activities (3,591,141) (3,805,121) Cash Flows from Noncapital Financing Activities Cash Received from Primary Government 6,074,467 4,840,735 Other Income (267,810) 212,065 Interest Expense and Finance Charges (2,910) (2,254) Net Cash Provided by Noncapital Financing Activities 5,803,747 5,050,546 Cash Flows from Capital and Related Financing Activities Note Principal Payments (25,555) (26,884) Acquisition of Property and Equipment (249,630) (151,803) Net Cash Used in Capital and Related Financing Activities (275,185) (178,687) Cash Flows from Investing Activities Interest Income 506,713 77,279 Return of Relief Revolving Funds - 400,000 Net Sale of Investments (39,353) (37,479) Net Cash Provided by (Used in) Investing Activities 467,360 439,800 Net Increase in Cash and Cash Equivalents 1,981,427 1,506,538 Cash and Cash Equivalents, Beginning of Year 19,442,064 17,935,526 Cash and Cash Equivalents, End of Year $ 21,423,491 $ 19,442,064 Operating Loss $ (6,465,341) $ (8,221,302) Adjustments to Reconcile Operating Loss to Net Cash Provided by (Used in) Operating Activities: Depreciation Expense 321,944 389,702 Bad Debt Expense 83,161 905,263 Decrease (Increase) in Deferred Outflows of Resources 2,160,406 1,450,797 (Decrease) Increase in Net Pension Liability (1,490,390) (890,847) Decrease (Increase) in Accounts Receivable 307,987 659,927 (Increase) Decrease in Prepaid Expenses (55,547) (10,384) Decrease (Increase) in Loans Receivable 297,030 583,851 (Decrease) Increase in Accounts Payable and Accrued Expenses (820,489) (510,232) (Decrease) Increase in Compensated Absences 26,357 (1,998) Increase (Decrease) in Deferred Revenue 695,033 95,455 Increase (Decrease) in Security Deposit (6,666) 25,001 Increase (Decrease) in Deferred Inflows of Resources 1,357,919 1,718,972 (Decrease) Increase in Interest Payable (2,545) 674 Net Cash (Used in) Provided by Operating Activities $ (3,591,141) $ (3,805,121) VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY (A Component Unit of the Virgin Islands Government) NOTES TO THE FINANCIAL STATEMENTS SEPTEMBER 30, 2019 NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES • Governance: The Virgin Islands Economic Development Authority (the “Authority”), was created on December 21, 2000, as an umbrella authority to assume, integrate and unify the functions of the Government Development Bank, the Economic Development Commission, the Economic Park Development Corporation (formerly known as the Industrial Development Park Corporation) and the Small Business Development Agency under an executive board, which consists of seven members appointed by the Governor. The Authority is a public corporation and a semi-autonomous instrumentality of the Government of the Virgin Islands and operates under the provisions of Act of 6390, approved by the Twenty-third Legislature of the United States Virgin Islands. The general purposes and functions of the Authority were previously carried out by the Government Development Bank for the United States Virgin Islands which was created originally in 1978 by Act No. 902, and subsequently amended in 1995 and 1996. The mission of the Authority is to accelerate the economic development of the Virgin Islands by providing financial and technical assistance to industrial and commercial enterprises to create and save jobs in the community. In this regard, the Authority is authorized, among other things, to make loans to eligible small business enterprises. The Authority is a component unit of the Government of the Virgin Islands and as such, its financial statements are included in the Comprehensive Annual Financial Statements of the Central Government. • Economic Dependency: The Authority’s sustainability depends primarily on appropriations from the Government of the Virgin Islands. In addition, it earns income from application fees, processing fees, compliance fees, and rental income from its Economic Park facilities. During fiscal year ended September 30, 2019, the Authority received appropriations totaling $5,745,138 from the Government of the Virgin Islands, which approximates 88% of its nonoperating revenue. • Basis of Presentation: The Authority’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) as prescribed by the Governmental Accounting Standards Board. The Authority uses the economic resources measurement focus and follows the accrual basis of accounting whereby revenue is recorded when earned and expenses are recorded when incurred. The Authority distinguishes between operating and nonoperating revenues and expenses. Operating revenues and expenses generally result from providing services in connection with the Authority’s principal ongoing business operations. Operating expenses include costs and losses resulting from services, administrative expenses, and depreciation expense. All other revenues and expenses are reported as nonoperating revenues and expenses. Nonoperating revenues consist of interest generated from restricted and unrestricted investments in short-term investment instruments. • Separate Funds: The accounts of the Authority are organized on the basis of funds, each of which is considered to be a separate accounting entity. All transactions are recorded in a separate set of self-balancing accounts, which include assets, liabilities, fund net assets, revenues and expenses. During fiscal year ended September 30, 2019, the Authority maintained twelve (12) accounting divisions and ten (10) major funds which constitute major transactions of the Authority. www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 77 76 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 77 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The following is a summary of these funds: − Government Development Bank Fund (GDB) accounts for the locally funded Micro Loan Program. This fund accounts for interest income from the operating account and certificates of deposits, local government appropriations, and administrative costs. The Authority’s administration and processing of loan applications on behalf of the Virgin Islands Department of Agriculture and the Virgin Islands Energy Office also occur within this fund. Those transactions have however, been excluded from the Authority’s financial statements. − Economic Development Commission Fund (EDC) accounts for application, activation and annual compliance fees. Local government appropriations are also accounted for in this account together with related administrative costs. − Small Business Development Agency (SBDA) accounts for the Federal Economic Development Administration Loan Funds from the U.S. Department of Agriculture, Farmers and Fishermen Local Loans, Frederiksted Revolving Loan Fund and the SDBA Direct Loan Fund. Appropriations from the central government and administrative costs are also accounted for under this fund. The SBDA legislation does not allow interest earned from its loan portfolio to be used for administrative purposes. The interest income is restricted and is used for issuing new loans. − Economic Park Development Corporation (EPDC) accounts for the activities conducted by the EPDC. The EPDC was established in March 1984 to acquire, operate, and improve industrial parks in order to provide suitable sites for the location of industries to the Virgin Islands. The EPDC accounts for rental and investment income, and administrative costs associated with its operation. The EPDC does not receive any appropriations from the local government. − Intermediary Relending Program (IRP) accounts for loans that are funded by the United States Department of Agriculture Rural Development Program. The interest income earned from these loans is applied to the program’s administrative costs. − Enterprise Zone Commission (EZC) accounts for funds committed to the task of offering incentives to businesses that invest in severely economically depressed designated areas of St. Thomas and St. Croix. As a result, employment opportunities are provided to residents of the areas so designated. − Economic Development Authority (Authority) accounts for loans that are funded through U.S. Department of Agriculture. − Tax Increment Financing (TIF) this fund allows projects to be financed by pledging the increases in tax revenues that can be reasonably anticipated to be collected by the government once the financed project or activity is completed. − Economic Development Management (EDM) this account was established to record all administrative costs associated with the day-to-day operations of the Authority. − State Small Business Credit Initiative (SSBCI) this fund was established by the Small Business Jobs Act of 2010 by the Federal Government to Collateral Support Program, the Credit Guarantee Program, and the Payment, Surety and Performance Bond Program. − State Trade and Export Promotion Grant Program (STEP) this program is funded by a federal grant from U.S. Small Business Administration. The program authorized by the Small Business Jobs Act of 2010 is a 3-year trade and export promotion pilot initiative to make matching-fund grants for states to assist ‘eligible small business concerns.’ The program objectives are to increase the number of small businesses that are exporting, and to increase the value of exports for those small businesses. NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) − Disaster Small-Midsized Enterprises Incubator Program – The Authority was awarded a Federal grant in the amount of $1,000,000 that is matched with $200,000 of local funding for the establishment of an incubator program on the island of St. Croix. The program promotes resource collaborations between the local government and other community-based institutions to create an avenue to spark economic viability and sustainability. • Cash and Cash Equivalents: For the purposes of reporting cash flows, cash and cash equivalents are defined as cash on hand, demand deposits, certificate of deposits with financial institutions and all highly liquid investments available for current use with an initial maturity of three months or less. • Investments: Investments in marketable securities or other short-term investments of cash with readily determinable fair values and investments in debt securities are reported at their fair values in the Authority’s statement of net assets. • Restricted Cash and Cash Equivalents: This consists of cash and cash equivalents to be used for specific purposes as specified by legislation or by a grant agreement. • Allowance for Uncollectible Accounts (Loan Losses): The Authority provides for losses when a specific need for an allowance is indicated. The provision for loan losses charged to operating expenses is the amount necessary to report the net asset at its estimated realizable value. In determining the adequacy of the allowance, management considers the composition of the loan portfolio, economic factors, historical loss experience, and value and sufficiency of collateral in the current level of the allowance. • Capital Assets: The Authority capitalizes all property and equipment at cost. The property and equipment is capitalized and depreciated using the straight line method over the assets estimated useful lives. The cost of normal maintenance and repairs that do not add to the value of the assets or materially extends the life of the assets are not capitalized. Depreciation has been provided using the straight-line method. The estimated economic lives of the Authority’s property and equipment varied as follows: Equipment and Furniture and Fixtures 3-5 Years Vehicles 5 Years Buildings and Leasehold Improvements 5-27 Years The Authority evaluated its capital assets in accordance with GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries and determined that there was no impairment loss for the year ended September 30, 2019. • Compensated Absences: The Authority has recognized the liability for annual leave, which is payable to employees upon separation. Sick leave balances are not paid out upon termination, however liability for the balances exists in the event an employee transfers to another government agency; such liability is recognized at the time of the transfer. The liability for both amounts is calculated based on the Authority’s salary rates in effect at the statement of net position date. • Use of Estimates: The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenditures during the reporting period. Accordingly, actual results could differ from those estimates. www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 79 78 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 79 NOTE 2 NATURAL DISASTERS – HURRICANES IRMA AND MARIA On September 6 and 19, 2017, the United States Virgin Islands were struck by two Category five hurricanes. The extent and severity of the storms was unprecedented and resulted in catastrophic damage to the Territory. The Authority suffered damages in the amount of $8,979,280. The Authority’s assets are covered under the Government of the Virgin Islands Property Insurance Program. The insurance program covers substantially all the property of the Virgin Islands Government. The program provides coverage for all risks including windstorm, earthquake, and floods. The Virgin Islands Department of Property and Procurement manages all activity related to the Property Insurance Program. The Authority realized $-0- in insurance recoveries in fiscal year 2018. On or about September 7 and 20, 2017, the President of the United States declared the United States Virgin Islands a disaster area and eligible for Federal Emergency Management Agency (FEMA) recovery assistance. The Authority requested financial assistance from FEMA to aid with storm related losses caused by the hurricanes, reimbursement of expenditures will be secured through Federal assistance and other contributions. As of September 30, 2018, the Authority has not received any Federal assistance or other contributions from FEMA. NOTE 3 CASH AND CASH EQUIVALENTS Cash and cash equivalents consisted of the following at September 30, 2019: Unrestricted Restricted Total Cash and Cash Equivalents $ 11,635,065 $9,788,426 $21,423,491 Custodial Risk is the risk that in the event of bank failure the Authority’s deposits may not be returned to it. Cash consists of cash on handheld by depository institutions and trustees in the Authority’s name. During the fiscal year, including the final date of the period, September 30, 2019, accounts at each financial institution were insured by the Federal Deposit Insurance Corporation up to $250,000. Cash in excess of this limit are $24,160,853 and are fully collateralized. Restricted Cash and Cash Equivalents: The restricted cash and cash equivalents at September 30, 2019 consisted of the following: Micro Credit Loan Program $ 1,795,929 Farmers and Fishermen Loan Fund 299,559 Frederiksted Revolving Loan Fund 271,876 Performance Bonding Loan Fund 2,159,403 Intermediary Relending Loan Fund 221,184 SBDA Revolving Loan Fund 919,839 SBDA Administration Loan Fund I 142,761 SBDA Administration Loan Fund II 308,948 SSBCI Grant 3,168,927 TAP Grant 500,000 $ 9,788,426 The restrictions above relate to revolving loan funds established through legislation to offer direct assistance to various industries and businesses and to aid in the creation of economic opportunities within the United States Virgin Islands. NOTE 4 INVESTMENTS The Authority categorizes its fair value measurement within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other than observables inputs; Level 3 inputs are significant observable inputs. At September 30, 2019, the Authority’s investments consisted of certificate of deposits which had a recurring fair value of $6,287,454 at year-end. The certificate of deposits is classified as Level 2 in the fair value hierarchy and is valued at amortized cost-plus accrued interest. Investment Maturities Investment Type Fair Value Less than 1 Year 1-5 Years Certificates of Deposits $ 9,047,694 $ 941,936 $8,105,758 NOTE 5 RESTRICTED NET POSITION FOR LOAN PROGRAMS AND OTHER FUNDS The restricted net position at September 30, 2019, consists of the following: Micro Credit Loan Program $ 3,726,741 Farmers and Fishermen Loan Fund 313,839 Frederiksted Revolving Loan Fund 271,876 Performance Bonding Loan Fund 3,901,497 Intermediary Relending Loan Fund 59,465 SBDA Revolving Loan Fund 1,380,063 SBDA Administration Loan Fund I 145,411 SBDA Administration Loan Fund II 405,981 SSBCI Grant 5,828,079 TAP Grant 500,000 $16,532,952 NOTE 6 LOANS RECEIVABLE Restricted Loans receivable as of September 30, 2019 was as follows: Loan Principal $ 2,993,684 Allowance for Doubtful Accounts (455,271) Net Loans Receivable $ 2,538,413 The loans bear interest rates ranging from 4% to 12%. The majority of the allowance for doubtful accounts is attributed to SBDA & GDB loans which were assumed by the Authority at its inception. No additional allowance was recorded in fiscal year 2019. www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 81 80 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 81 NOTE 9 LOANS PAYABLE The Authority entered into an Intermediary Relending Program loan agreement (IRP) with the United States Department of Agriculture Rural Business Cooperative Services on April 21, 1998. This agreement requires the repayment of the approved loan principal of $670,530 to begin after three (3) years in twenty-seven (27) equal annual installments. An interest rate of 1% accrues on the outstanding balance. As of September 30, 2019, the outstanding loan balance was $264,907. As of September 30, 2019, the outstanding loan balance is comprised of the following: Beginning Balance Additions Deductions Ending Balance Due Within One Year Loan Payable $ 264,907 $ - $ (25,555) $ 239,352 $ 25,889 Future minimum payments to the U.S. Department of Agriculture are as follows: 2021 $ 26,147 2022 26,409 2023 26,673 2024 26,940 2025-2028 110,201 Total $ 216,370 NOTE 10 COMPENSATED ABSENCES Compensated absences balance as of September 30, 2019 was $423,647 of which $183,141 is due within a year. NOTE 11 LEASES Lessor --- The Authority leases commercial properties it owns through the Economic Park Development Corporation. The terms of the leases vary from one to five years, with monthly rent payments dependent on the amount of square footage occupied and the location of the property. Lessee --- The Authority leases office space, under a five-year lease term, from January 1, 2018 through December 31, 2022, for office and common area spaces with increases in rent on the 2nd and 4th anniversaries equal to the percentage of the cost-of-living increase for the preceding year, based upon the Consumer Price Index (CPI-U) as published by the U.S. Department of Labor Bureau of Labor Statistics. In addition, the Industrial Park buildings are located on parcels of leased land. The land is rented under a two-year term, from January 1, 2017 – December 31, 2019. Rent expense for the year ending September 30, 2019 was $267,503. The aggregate lease commitment for the Authority is $-0-. NOTE 7 OTHER RECEIVABLES The other receivables balance as of September 30, 2019: Other Receivables Allowance Other Receivables, net Interest Receivable $ 8,168 $ - $ 8,168 GDB Receivable 22,035 - 22,035 EDC Fees & Charges 126,721 (117,935) 8,786 Rent Receivable 148,657 (92,667) 55,990 Grant Receivable-Board Up & Scrape and Paint Program 40 - 40 Tax Increment Financing Fund 30,015 (30,015) - Economic Development Management 147,865 - 147,865 Receivable - Taxi-Tour Bus (210) - (210) Total $ 483,291 $ (240,617) $ 242,674 Provision for uncollectible accounts was $83,161 in fiscal year 2019. NOTE 8 CAPITAL ASSETS Capital assets are composed of the following at September 30, 2019: Beginning Balance Additions Retirement Ending Balance Capital Assets Building and Building Improvements $ 9,355,407 $ 153,435 $ - $ 9,508,842 Leasehold Improvements 867,890 $ - $ - 867,890 Equipment 1,186,915 96,196 $ - 1,2,83,111 Furniture and Fixtures 513,973 $ - $ - 513,973 Vehicles 469,145 $ - $ - 469,145 Leasehold Equipment 20,585 $ - $ - 20,585 Total Capital Assets 12,413,915 249,631 $ - 12,663,546 Accumulated Depreciation Building and Building Improvements (8,787,534) (145,307) $ - (8,932,841) Leasehold Improvements (451,685) (77,007) $ - (528,692) Equipment (1,082,623) (49,155) $ - (1,131,778) Furniture and Fixtures (506,560) (3,171) $ - (509,731) Vehicles (322,600) (47,305) $ - (369,905) Leasehold Equipment (20,585) $ - $ - (20,585) Total Accumulated Depreciation (11,171,587) (321,945) $ - (11,493,532) Capital Assets, net $ 1,242,328 $ (72,314) $ - $ 1,170,014 Depreciation expense for the year ended September 30, 2019 totaled $321,944. During 2018, the Authority was impacted by Hurricanes Irma and Maria and certain assets sustained physical damage and other assets require considerable effort to restore their service utility. The Authority evaluated its capital assets in accordance with GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries. The Authority did not recognize any impairment loss for the year ended September 30, 2019. www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 83 82 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 83 NOTE 12 DEFERRED REVENUE Current Deferred Revenue: Out of $13,128,487 reflected in the financial statements $12,920,121 represents the amount not expended as of September 30, 2019 from the grant funds received in fiscal year 2012 from the United States Department of Treasury for the State Small Business Credit Initiative. Noncurrent Deferred Revenue: In October 2009, the Virgin Islands Public Finance Authority (VIPFA) issued $87,000,000 in bonds of which $5,000,000 was allotted to the Authority. These funds are to be utilized for developmental loan programs and are drawn down from VIPFA as loans are issued. Out of the noncurrent deferred revenue reflected in the financial statements $939,405 represents advance funds received from VIPFA in fiscal year 2009. The deferred revenue will be relieved as additional loans are made in the future. NOTE 13 PENSION PLAN The Authority follows the provisions of GASB Statement No. 68 Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27. This Statement establishes financial reporting standards for state and local governments for pensions. Plan Description The Authority’s employees are members of the Employees’ Retirement System of the Government of the U.S. Virgin Islands (“GERS”), cost sharing multiple employer defined benefit, public employee retirement system as defined by GASB 68. The system was established by the Government to provide retirement, death and disability benefits to its employees. All of the Authority’s full-time regular employees are mandated to participate in the retirement plan administered by GERS. The Authority’s part-time employees who regularly work more than 50% of the normal work period, and full-time regular employees who at the time of employment are under age 55 years with one year of government service are eligible to participate in the system. Effective January 1, 2015, the Authority’s required contribution was 20.5% of the member’s annual salary. Prior to that date, the percentage was 17.5%. Effective January 1, 2017, member contributions were 11 and 11.5% for Tier I and Tier II employees. Prior to that, member contributions were 10 and 10.5% for Tier I and Tier II employees respectively. Total amount of the Authority’s covered payroll for the year ended September 30, 2019 was $2,402,395. Plan descriptions, funding policies, and a schedule of employee required and paid contributions for the defined benefit plans are presented in the Virgin Islands Comprehensive Annual Financial Report (CAFR) for the fiscal year ended September 30, 2019. The CAFR also provides detailed historical trend information showing the progress in accumulating sufficient assets to pay benefits when due. In addition, GERS issues a publicly available report that includes financial statements and required supplementary information. This report may be obtained from the Employees Retirement System of the Government of the Virgin Islands, GERS Complex, 3438 Kronprindsens Gade, St. Thomas, VI 00802. NOTE 14 NET PENSION LIABILITY Net Pension Liability Effective July 1, 2014, the Entity implemented the prov1s1ons of GASB Statement No. 68, Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27, as amended by GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date - an amendment of GASB Statement No. 68. Following is a description of the pension plan and accounting for pension expense, liabilities, and deferred outflows/inflows of resources. Plan Description and Benefits Full time employees of the Authority are members of the Government Employees’ Retirement System of the Virgin Islands (GERS), a cost sharing multiple-employer, defined benefit pension plan (the plan) established as of October1,1959 in accordance with Title 3, Chapter 27 of the Virgin Islands Code to provide retirement, death, and disability benefits. Benefits may be extended to beneficiaries of plan members. The plan covers all employees of the Government, including the Entity, except employees compensated on a contract fee basis, casual, per diem or provisional and part time employees who work less than 20 hours per week. Persons over the age of 55 may opt out of the plan by providing formal notification to the plan. Vesting of benefits occurs after 10 years of service. Benefits may be extended to beneficiaries of plan members. There are two tiers within the plan: Tier I: Employees hired prior to September 30, 2005 Tier II: Employees hired on or after October 1, 2005 Regular employees who have completed 30 years of credited service or have attained age 60 with at least 10 years of credited service are eligible for a full-service retirement annuity. Members who are considered “safety employees” as defined in the Code are eligible for full retirement benefits when they have earned at least 20 years of service or have reached the age of 55 with at least 10 years of credited service. Regular and safety employees who have attained age 50 with at least 10 years of credited service may elect to retire early with a reduced benefit. The monthly annuity benefit payment is determined by applying a stipulated benefit ratio to the member’s average compensation. Average compensation for Tier I members is determined by averaging the five highest years of credited service within the last ten years of service, subject to the maximum salary limitations in effect during such service. Average compensation for Tier II members is determined by averaging the most recent five years of credited service within the last ten years of service, subject to the maximum salary limitations in effect during the service. The maximum annual salary that can be used in this computation is $65,000, except for senators and judges, whose annual salary is used. Funding and Contribution Policy Contributions to GERS are established by the Board of Trustees of GERS. The Government’s required employer contribution for Tier I and Tier II members was 20.5% of the member’s annual salary. Effective January 1, 2017, Tier I member contributions increased by 1% to 11% of annual salary for regular employees. Effective January 1, 2017, Tier II member contributions increased by 1% to 11.5% of annual salary for regular employees. www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 85 84 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 85 NOTE 14 – NET PENSION LIABILITY (Continued) Actuarial Assumptions A summary of the actuarial assumptions and methods used to calculate the total pension liability as of September 30, 2017, is provided below, including any assumptions that differ from those used in the October 1, 2017 actuarial valuation. Refer to October 1, 2017 actuarial valuation report for a complete description of all other assumptions, which can be found on GERS’ website. Inflation Rate: 2.50% Salary Increases: 3.25% including inflation Actuarial Cost Method: Entry Age Normal Expected Rate of Return: 7.00% Municipal Bond Yield: 4.18% Discount Rate: 4.25% Mortality Table: RP-2014 Blue Collar Investment Rate of Return The long-term expected rate of return of 7.0% on plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the plan’s target asset allocation as of September 30, 2018, are summarized as follows: Asset Class Target Allocation Long-Term Expected Real Rate of Return Domestic equity 29% 6.16% International equity 12% 6.71% Fixed income 27% 1.71% Cash 2% 0.91% Alternative 30% 5.50% Discount Rate The discount rate used to measure the total pension liability was 4.25% as of September 30, 2018 and 3.74% as of September 30, 2017. The projection of cash flows used to determine the discount rate assumed plan member contributions will be made at the current contribution rate, including the future increases in the employee contribution rates legislated. Based on those assumptions, the plan’s fiduciary net position was not projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments of 7.0% was applied to all periods of projected benefit payments that are covered by projected assets. For periods where projected future benefit payments are not covered by projected assets, the yield on a 20-year AA Municipal Bond index was applied, which was 4.18% and 3.64% at September 30, 2018 and 2017, respectively. Sensitivity of Proportionate Share of Net Pension Liability to Changes in the Discount Rate The following presents the Authority’s allocation of its proportionate share of the net pension liability (NPL) for the plan, calculated using the discount rate, and what the allocation of the Authority’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1% (2.74%) lower or 1% (4.74%) higher than the current rate. 1% Decrease Share of NPL @ 3.25% Share of NPL @ 4.25% 1% Increase Share of NPL @ 5.25% $28,487,644 $24,765,971 $21,673,729 Detailed information about pension plan’s fiduciary net position is available in the separately issued GERS financial report. NOTE 14 – NET PENSION LIABILITY (Continued) Prior to June 29, 2000, member contributions were refundable without interest upon withdrawal from employment before retirement. Effective July 1, 2009, GERS’ Board of Trustees approved an effective annual interest rate on refunded contributions of 2% per annum. Both the Plan and the Authority have a September fiscal year end. GASB Statement No. 68 requires that the reported results must pertain to liability and asset information within certain defined time frames. For this report, the following time frames are used: Valuation Date: October 1, 2018 Measurement Date: September 30, 2018 Measurement Period: October 1, 2017 – September 30, 2018 The Authority’s proportionate share of employer contributions recognized by GERS was $415,001 for the Plan’s fiscal year ended September 30, 2018. Pension Liabilities and Expense and Deferred Outflows/Inflows of Resources As of September 30, 2019, the actuarial calculated net pension liability for the Authority’s proportionate share of the net pension liability of the Plan was $22,826,467. The net pension liability of the Plan is measured as of September 30, 2018, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of October 1, 2018. Actuarially determined proportionate share information from GERS was estimated by management based on an average four-year respective share of the Authority’s contributions to the Plan relative to all contributions to the Plan. At September 30, 2018, the Authority’s proportion was .5470 percent, which was a decrease of .0352 from its proportion measured as of September 30, 2017. For the year ended September 30, 2019, the Authority recognized $493,041 of pension expense, inclusive of amortization of deferred outflows of pension related items. Following is a schedule of deferred outflows/inflows of resources allocated to the Authority in the computation of net pension liability: Deferred Outflows by Resources Deferred Inflows of Resources Change in assumptions $ 2,683,369 $ 2,842,660 Difference between expected and actual experience 529,969 $ - Net difference between projected and actual earnings on pension plan investments 43,108 519,125 Change in proportionate share 336,502 - Contributions made subsequent to measurement date 493,041 $ - $ 4,085,989 $ 3,361,785 Amounts reported as deferred outflows, exclusive of contributions made after the measurement date, will be recognized in pension expense as follows: Year ending September 30, 2020 $ 713,326 2021 630,670 2022 (136,587) 2023 (123,550) 2024 (497,501) Thereafter (234,765) www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 87 86 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 87 NOTE 15 OTHER POSTEMPLOYMENT BENEFITS The Government provides other postemployment benefits (OPEB) of healthcare, prescription, dental and life insurance coverage. The Authority participates in the Government’s plan. These benefits are provided in accordance with Title 3, Chapter 25, Subchapter VIII of the V.I. Code as part of a multiple employer defined benefit OPEB plan, in which the Authority participates. All employees who retire from government service after attaining age fifty-five (55) with at least thirty (30) years of service, except for policemen and firemen who can retire with at least twenty (20) years of service, are eligible for these benefits. In the year ended September 30, 2018, the Authority has implemented the provisions of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. This standard requires the reporting and disclosure of costs and liabilities associated with postemployment benefits provided to retirees of the Authority. Healthcare, prescription, and dental insurance is provided through negotiated contracts with private insurance companies. Participants in the plan may elect coverage for their spouses and dependent children. Participants are required to contribute 35% of medical, prescription, and dental premiums. Employees covered by benefits terms. At September 30, 2019, the following employees were covered by the benefit terms: Service and Disability retirees 7 Active employees 44 Total 51 The contribution requirements of plan members and the Primary Government are legislated within the V.I. Code, and may be amended, by the Virgin Islands Legislature. As part of the code, the Primary Government is legally responsible to pay 100% of the cost of the benefits constituting a special funding situation under GASB Statement No. 75 for the Authority. For the years ended September 30, 2019 and 2018, the Authority recognized revenue and related expenses of $154,344 and $169,745, respectively, related to the on-behalf OPEB costs paid by the Primary Government. The plan is a pay-as-you-go plan, no assets have been accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No.75 and expenses are paid as they become due. At September 30, 2019 and 2018, respectively, the Authority’s proportionate share of the total OPEB liability was reduced by the OPEB support provided by the Primary Government. The amount recognized by the Authority for its proportionate share, the related Primary Government proportion and the total were as follows: 2019 2018 The Authority’s proportionate share of total OPEB liability $ - $ - Primary Government’s share of the total OPEB liability associated with the Authority 1,911,089 1,841,060 Total OPEB liability $ 1,911,089 $ 1,841,060 NOTE 15 – OTHER POSTEMPLOYMENT BENEFITS (Continued) At September 30, 2019 and 2018, the Primary Government’s share of the deferred inflows of resources related to the Authority are as follows: 2019 2018 Changes in Actuarial Assumptions or other input $181,816 $126,327 The amounts of the Primary Government’s balances of deferred inflows of resources related to the Authority will be recognized in OPEB expense as follows: Year ended September 30 OPEB Expense Amount 2020 $ 37,924 2021 37,924 2022 37,924 2023 37,924 2024 24,145 Thereafter 5,975 Total $181,816 Actuarial Assumptions The postemployment benefit plan is an unfunded plan. An actuarial valuation was conducted of the amount required to fund the plan, involving assumptions about the probability of the occurrence of events in the future. Update procedures were used to roll forward the total OPEB liability to the measurement date. Actuarial assumptions used in the computation of the total OPEB liability are as follows: Valuation date: October 1, 2017 Measurement date: October 1, 2018 Report date: September 30, 2019 Actuarial cost method: Entry Age Normal Cost Method Amortization method: Recognition Period of 6 Years Salary increases: Payroll Growth of 3.25% per year Discount rate: Beginning of Year Rate of 3.35% End of Year Rate of 3.64% S&P Municipal Bond 20-Year High Grade Rate Index as of September 30, 2018 Healthcare cost trend rates: Pre-Medicare Increases of 7.00% in 2018 to 4.50% in 2023 Medicare Increases of 5.50% in 2018 to 4.50% in 2023 Dental Increases of 5.50% in 2018 to 4.50% in 2023 Inflation: 2.25% Implicit Rate in Healthcare Trend Analysis www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 89 88 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 89 NOTE 15 – OTHER POSTEMPLOYMENT BENEFITS (Continued) Retirees share of costs: 35% of Medical and Dental Premiums and Noncontributory Life Insurance Coverage. Mortality: RP-2014 Blue Collar Mortality Generational Table Adjusted 110% with Scale MP-2015 for Healthy Lives. For Disability Retirees, RP-2014 Disabled Mortality Generational Table Adjusted 125% with Scale MP-2015 Marital status: Assumed 50% of Future Male Retirees and 25% of Future Female Retirees Cover Spouses in Retirement Husbands Assumed to be 3 Years Older Than Spouse Subsidized Coverage of Spouses and Dependents Ceases Upon Death. Actuarial Experience Study The actuarial assumptions used in the October 1, 2018 valuation was based on the results of an actuarial experience study for the period October 1, 2014 – September 30, 2015. Discount Rate Sensitivity Analysis The following schedule shows the impact of the total OPEB Liability if the discount rate was 1% less than and 1% greater than the discount rate that was used (3.64%) in measuring the total OPEB Liability for the year ended September 30, 2019. 1% Decrease in Discount Rate (2.64%) Current Single Discount Rate (3.64%) 1% Increase in Discount Rate (4.64%) The Primary Government’s share of the total OPEB liability associated with the Authority: $ 2,277,285 $ 1,911,089 $ 1,611,511 The following schedule shows the impact of the total OPEB Liability if the discount rate was 1% less than and 1% greater than the discount rate that was used (3.35%) in measuring the total OPEB Liability for the year ended September 30, 2018. 1% Decrease in Discount Rate (2.35%) Current Single Discount Rate (3.35%) 1% Increase in Discount Rate (4.35%) The Primary Government’s share of the total OPEB liability associated with the Authority: $ 2,188,485 $ 1,841,060 $ 1,565,162 NOTE 15 – OTHER POSTEMPLOYMENT BENEFITS (Continued) Healthcare trend Sensitivity Analysis The following schedule shows the impact of the total OPEB Liability if a healthcare trend rate that is 1% less than and 1% greater than the assumed 7.0% rate used for the year ended September 30, 2019. 1% Decrease in Healthcare Trend Rate (6.0%) Current Single Healthcare Trend Rate (7.0%) 1% Increase in Healthcare Trend Rate (8.0%) The Primary Government’s share of the total OPEB liability associated with the Authority: $ 1,569,991 $ 1,911,089 $ 2,363,432 The following schedule shows the impact of the total OPEB Liability if a healthcare trend rate that is 1% less than and 1% greater than the assumed 7.0% rate used for the year ended September 30, 2018. 1% Decrease in Healthcare Trend Rate (6.0%) Current Single Healthcare Trend Rate (7.0%) 1% Increase in Healthcare Trend Rate (8.0%) The Primary Government’s share of the total OPEB liability associated with the Authority: $ 1,517,108 $ 1,841,060 $ 2,270,905 NOTE 16 COMMITMENTS AND CONTINGENCIES In the normal course of business, the Authority has various outstanding commitments at September 30, 2019, which includes outstanding loan commitments in the process of being approved by the Board of Directors which are not reflected on the statement of net assets. The Authority asserts that there have not been any material claims, suits or complaints filed nor are any pending against the Authority. In the opinion of management, all other matters which are asserted or unasserted are without merit and would not have a significant effect on the financial position or results of operations if they were disposed of unfavorably. NOTE 17 RISK MANAGEMENT The Authority is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; and natural disasters for which the Authority has commercial insurance coverage. Annual premium payments are made in proportion to the anticipated exposure to the liability losses assessed. www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 91 90 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 91 NOTE 18 INSURANCE RECOVERIES Certain properties of the Authority sustained damage as a result of hurricanes Irma and Maria. The Authority’s properties are insured under an umbrella policy owned by the Government of the U.S. Virgin Islands. The Authority has expended certain sums on repairs and expects to incur substantial costs in future periods. The allocated insurance recovery from the Government wide insurance policy has not been received as of the date of this report. Minimal recoveries have been received and are reflected in the financial statements. NOTE 19 SUBSEQUENT EVENTS The Authority’s management has evaluated subsequent events through January 15, 2021, the date the financial statements were available to be issued. The accompanying financial statements recognize the effects of subsequent events that provided evidence about conditions that exist at the balance sheet date, including the estimates inherent in the process of preparing financial statements. The accompanying financial statements do not recognize the effect of subsequent events that did not exist at the balance sheet date, but disclosures of such events, if any, are included in the accompanying notes. The U.S. Virgin Islands has been impacted by the Coronavirus Disease (COVID-19), an aggressive and potent pandemic. This pandemic is considered a non-recognized subsequent event, that is, an event that did not exist at the date of the statement of position. The financial impact of the event is unknown, and no adjustment has been recorded in the financial statements. REQUIRED SUPPLEMENTARY INFORMATION www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 93 92 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 93 VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY (A Component Unit of the Virgin Islands Government) SCHEDULE OF THE AUTHORITY’S PRORPORTIONATE SHARE OF NET PENSION LIABILITIY LAST 10 FISCAL YEARS 2019 2018 2017 2016 2015 Proportion Share of the Net Pension Liability 0.5935% 0.5994% 0.5868% 0.6044% 0.05569% Proportionate Share of the Net Pension Liability $24,765,971 $26,256,361 $27,147,208 $24,609,495 $18,803,107 Covered-Employee Payroll $ 2,402,395 $ 2,404,022 $ 2,130,222 $ 2,149,268 $ 2,106,050 Proportionate Share of the Net Pension Liability as a Percentage of Covered-Employee Payroll 1031% 1092% 1274% 1145% 892% Plan Fiduciary Net Position as Percentage of the Total Pension Liability 11.32% 16.18% 16.54% 19.58% 27.02% *The schedule is intended to show a 10-year trend. Additional years will be reported as they become available. The amounts presented for each fiscal year are as of the measurement date (September 30 of the previous fiscal year.) VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY (A Component Unit of the Virgin Islands Government) SCHEDULE OF THE AUTHORITY’S CONTRIBUTIONS LAST 10 FISCAL YEARS 2019 2018 2017 2016 2015 Contractually Required Contributions $1,647,137 $1,604,852 $1,450,324 $1,209,343 $1,056,524 Contributions in Relation to the Contractually Required Contribution 484,158 450,946 528,992 437,513 388,619 Annual Contribution Deficiency (Excess) $1,162,979 $1,153,906 $ 921,332 $ 771,830 $ 677,905 Covered Employee Payroll $2,402,395 $2,404,022 $2,130,222 $2,149,268 $2,106,050 Contributions as a Percentage of Covered Employee Payroll 20.15% 18.76% 24.83% 20.36% 18.45% *The schedule is intended to show a 10-year trend. Additional years will be reported as they become available. The amounts presented for each fiscal year are as of the latest fiscal year. www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 95 94 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 95 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Directors Virgin Islands Economic Development Authority St. Thomas, U.S. Virgin Islands We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the consolidated financial statements of the Virgin Islands Economic Development Authority (the Authority), and its wholly owned subsidiary Economic Development Park Corporation, a component unit of the Government of the U.S. Virgin ls lands, as of and for the year ended September 30, 2019, and the related notes to the consolidated financial statements, and have issued our report thereon dated January 15, 2021. Internal Control over Financial Reporting In planning and performing our audit of the consolidated financial statements, we considered the Authority's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the consolidated financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority's internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the Authority's consolidated financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY (A Component Unit of the Virgin Islands Government) SCHEDULE OF THE AUTHORITY’S PRORPORTIONATE SHARE OF OPEB LIABILITIY LAST 10 FISCAL YEARS Year Ended September 30, Measurement Period Ended October 1, Authority’s Proportion of the Total OPEB Liability Authority’s Proportion of the Total OPEB Liability Primary Government’s Proportionate Share of the total OPEB Liability Total OPEB Liability Authority’s Covered Employee Payroll Total OPEB Liability as a Percentage of the Authority’s Covered Employee Payroll 2019 2018 0.00% $ - $1,911,089 $1,911,089 $2,402,395 79.55% 2018 2017 0.00% $ - $1,841,060 $1,841,060 $2,404,022 76.58% 2017 2016 0.00% $ - $1,824,937 $1,824,937 $2,130,222 85.67% *The schedule is intended to show a 10-year trend. Additional years will be reported as they become available. The amounts presented for each fiscal year are as of the measurement date (September 30 of the previous fiscal year.) www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 97 96 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 97 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Authority's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Purpose of the Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. 3JAt  . U.S. Virgin Islands· January 15, 2021 VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2019 Audit Finding No. Finding Corrected Not Corrected 2018-01 Noncompliance with Program Requirements X www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 99 98 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 99 OTHER SUPPLEMENTARY INFORMATION www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 101 100 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Financial Report / 101 EDB EDC EDM EPDC EZC IRP SSBCI STEP USE 2019 2018 Operating Revenues Application and Processing Fees 4,750 $ 576,000 $ 950 $ - $ - $ - $ - $ - $ - $ 581,700 $ 490,650 $ Rental Income - - - 916,164 - - - - - 916,164 584,982 Interest Income from Loans 85,004 - 9,108 - - 3,237 - - - 97,349 180,650 Grant Revenue 50,000 - - - 60,500 - - 53,538 - 164,038 85,282 Penalties - 546,110 - - 14,227 - - - - 560,337 292,568 Other Operating Income 55,933 - 85,684 - 107,795 - - 17,150 266,561 361,477 Total Revenue 195,687 1,122,110 10,058 1,001,848 74,727 111,032 - 53,538 17,150 2,586,149 1,995,609 Operating Expenses Personnel Costs - - 5,823,606 393,539 - - - - - 6,217,145 6,202,940 General and Administrative 73 15 623,352 292,451 33,226 - (306) - 73 948,885 1,176,603 Occupancy - - 271,926 42,756 - - - - - 314,682 288,148 Advertising - - 436,045 - 400 - - - - 436,445 322,565 Professional Services - - 541,157 20,418 - - - - - 561,572 776,849 Travel - - 50,279 3,340 - - - - - 53,618 69,559 Grant Expenditure - - - - 60,500 - - 53,538 - 114,038 85,282 Uncollectible Receivables 18,948 - - 49,750 - - - - 14,463 83,161 905,263 Total Operating Expenses 19,021 15 7,746,364 802,254 94,126 - (306) 53,538 14,537 8,729,546 9,827,209 Excess (Deficiency) of Revenues from Operations Before Depreciation and Other Assets 176,666 1,122,095 (7,736,306) 199,594 (19,399) 111,032 306 - 2,613 (6,143,397) (7,831,600) Depreciation 6,642 - 156,136 159,167 - - - - - 321,944 389,702 Operating Income (Loss) 170,024 1,122,095 (7,892,441) 40,427 (19,399) 111,032 306 - 2,613 (6,465,341) (8,221,302) NonOperating Revenues (Expenses) Government Appropriation - - 5,674,499 - - - - - - 5,674,499 4,797,507 Interest Income 12,191 - 10,450 402 - - 60,317 - - 83,360 77,279 Other Income 2,755 (703,515) 908,516 - - 75 - - 7,487 215,317 141,770 Interest Expense & Finance Charges - - - - - (2,910) - - - (2,910) (2,254) Total Non-Operating Revenues 14,946 (703,515) 6,593,466 402 - (2,835) 60,317 - 7,487 5,970,266 5,014,302 Changes in Net Assets 184,970 418,580 (1,298,976) 40,830 (19,399) 108,196 60,622 - 10,100 (495,075) (3,207,000) Net Assets, Beginning of Year 11,287,463 4,153,902 (22,652,771) (1,626,366) 85,941 (51,277) 177,902 16,229 541,082 (8,067,896) (4,860,896) Net Assets, End of Year 11,472,433 $ 4,572,482 $ (23,951,747) $ (1,585,536) $ 66,542 $ 56,920 $ 238,524 $ 16,229 $ 551,183 $ (8,562,971) $ (8,067,896) $ VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITON FOR THE YEAR ENDED SEPTEMBER 30, 2019 (With Comparative Totals for 2018) ASSETS EDB EDC EDM EPDC EZC IRP SSBCI STEP USE Eliminations 2019 2018 Current Assets: Cash and Cash Equivalents 28,015 $ 2,046,117 $ 1,768,094 $ 268,640 $ 178,938 $ - $ 7,342,684 $ 2,575 $ - $ - $ 11,635,065 $ 9,854,539 $ Investments - - 941,936 - - - - - - - 941,936 935,389 Receivable, net 24,183 8,786 147,865 56,175 40 - 5,625 - - - 242,674 550,661 Due from Other Fund 2,577,345 2,565,088 799,150 1,033 - - - 21,797 - 5,964,413 - - Prepaid & Other Assets - - 112,347 14,977 - - - - - - 127,324 71,777 Total Current Assets 2,629,543 4,619,991 3,769,392 340,826 178,978 - 7,348,309 24,372 - 5,964,413 12,946,999 11,412,366 Non-Current Assets: Restricted Cash & Cash Equivalents 5,446,606 - - 500,000 - 221,184 3,168,927 - 451,709 - 9,788,426 9,587,525 Restricted Investments 2,725,719 - - - - - 2,659,152 - - - 5,384,871 5,352,065 Restricted Loan Receivable, net 2,361,288 - (192) - - 77,634 - - 99,683 - 2,538,413 2,835,443 Total Non-Current Assets 10,533,613 - (192) 500,000 - 298,818 5,828,079 - 551,392 - 17,711,710 17,775,033 Capital Assets, net 137,824 - 428,032 604,158 - - - - - - 1,170,014 1,242,328 Total Assets 13,300,980 4,619,991 4,197,232 1,444,985 178,978 298,818 13,176,388 24,372 551,392 5,964,413 31,828,723 30,429,727 Deferred Outflows of Resources - - 4,070,450 323,941 - - - - - - 4,394,391 6,554,797 Total Assets and Deferred Outflows of Resources 13,300,980 $ 4,619,991 $ 8,267,682 $ 1,768,925 $ 178,978 $ 298,818 $ 13,176,388 $ 24,372 $ 551,392 $ 5,964,413 $ 36,223,114 $ 36,984,524 $ LIABILITIES Current Liabilities Accounts Payable 11,923 $ 47,500 $ 323,734 $ 84,563 $ - $ 2,545 $ - $ - $ 210 $ - $ 470,474 $ 1,230,057 $ Accrued Expenses - - 200 2,194 - - - - - - 2,394 63,300 Compensated Absences - Current - - 182,622 519 - - - - - - 183,141 190,884 Interest Payable 18,245 - - - - - - - - - 18,245 20,790 Due to Other Fund 458,973 10 5,090,614 397,073 - - 17,743 - - 5,964,413 - - Deferred Revenue - - 208,366 - - - 12,920,121 - - - 13,128,487 13,058,155 Long Payable - Current - - - - - 25,889 - - - - 25,889 25,983 Total Current Liabilities 489,141 47,510 5,805,536 484,349 - 28,434 12,937,864 - 210 5,964,413 13,828,630 14,589,169 Non-Current Liabilities Compensated Absences - - 225,641 14,865 - - - - - 240,506 206,406 Security Deposit - - - 65,791 - - - - - 65,792 72,458 Deferred Revenue 939,405 - - 504,122 112,436 - - 8,143 - - 1,564,106 939,405 Relief Revolving Funds 400,000 - - - - - - - - - 400,000 400,000 Loan Payable - - - - - 213,463 - - - - 213,464 238,924 Net Pension Liability - - 22,826,467 1,939,504 - - - - - - 24,765,971 26,256,361 Total Non-Current Liabilities 1,339,405 - 23,052,108 2,524,282 112,436 213,463 - 8,143 - - 27,249,839 28,113,554 Total Liabilities 1,828,546 47,510 28,857,644 3,008,631 112,436 241,897 12,937,864 8,143 210 5,964,413 41,078,468 42,702,723 Deferred Inflows of Resources - - 3,361,785 345,831 - - - - - - 3,707,616 2,349,697 Total Liabilities and Deferred Inflows of Resources 1,828,546 $ 47,510 $ 32,219,429 $ 3,354,462 $ 112,436 $ 241,897 $ 12,937,864 $ 8,143 $ 210 $ 5,964,413 $ 44,786,085 $ 45,052,420 $ NET POSITION Invested in Capital Assets, net of related debt 137,824 $ - $ 428,032 $ 604,158 $ - $ - $ - $ - $ - $ - $ 1,170,014 $ 1,242,328 $ Restricted Net Position 9,594,208 - (192) 500,000 - 59,465 5,828,079 - 551,392 - 16,532,952 16,570,721 Unrestricted Net Position 1,740,401 4,572,482 (24,379,587) (2,689,695) 66,542 (2,545) (5,589,555) 16,229 (209) - (26,265,937) (25,880,945) Total Net Position 11,472,433 $ 4,572,482 $ (23,951,747) $ (1,585,536) $ 66,542 $ 56,920 $ 238,524 $ 16,229 $ 551,183 $ - $ (8,562,971) $ (8,067,896) $ VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY STATEMENT OF NET ASSETS (With Comparative Totals for 2018) AS OF SEPTEMBER 30, 2019 102 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 103 USVIEDA ENTITIES Economic Development Commission - Applications STT EDC Managing Director, Economic Development Margarita A. Benjamin STX EDC Applications Analyst II Esther M. Joseph STT EDC Applications Analyst I Sasha Garnett STX EDC Document Specialist LaShanna McBean de Chabert Economic Development Commission - Compliance STX EDC Director of Compliance Claude S.M. Gerard STT EDC Senior Compliance Officer Joy Penn STX EDC Lead Compliance Officer Ayanna T. Romney STT EDC Compliance Officer II Sandra Bess STX EDC Compliance Officer I Jahnella Harvey STX EDC Compliance Officer I Latoya Martin Enterprise Zone Commission STT EZC Managing Director, Enterprise Zone Commission Nadine T. Marchena Kean STT EZC Enterprise Zone Specialist II Raheem Smith STX EZC Enterprise Zone Specialist I Iyanna Jones, MBA STT EZC Enterprise Zone Programs & Grants Compliance Officer I Shaylah Anthony Economic Development Bank (formerly the Small Business Development Agency and the Government Development Bank) STX EDB Interim Director of Lending Monique T. Samuel STT EDB Loan / Collection Officer Denise C. Donadelle STT EDB Loan Assistant Charlene Gerard Joseph STT EDB Loan Assistant Shatima Charleswell STT EDB Receptionist Jeraldine Eason STX EDB Receptionist Gloria Fredericks EDB Disaster Small-Midsized Enterprises Incubation Program STX DSME Incubator Program Manager Cusa Holloway STX DSME Administrative Assistant Lisa Ann C. James Virgin Islands Economic Development Park Corporation (formerly known as the Industrial Park Development Corporation) STX EDP Park Superintendent Mark Finch STX EDP Senior Maintenance Worker Edward Berry STX EDP Maintenance Worker II Athanasius Obieus STX EDP Maintenance Worker I Ethelbert Lesmond KEY STT = St. Thomas STX = St. Croix USVIEDA = United States Virgin Islands Economic Development Authority Period of October 1, 2018 – September 30, 2019 ADMINISTRATION Executive STT USVIEDA Chief Executive Officer Kamal I. Latham STX USVIEDA Assistant Chief Executive Officer/COO Wayne L. Biggs, Jr. STX USVIEDA Business Ambassador Yolanda Bryan STX USVIEDA Project Coordinator Humberto O’Neal STT USVIEDA Executive Assistant to the CEO Celina D. Morris STT USVIEDA Administrative Assistant Ja’Nelle Forbes STX USVIEDA Administrative Assistant Michelle Gaskin Accounting STT USVIEDA Chief Financial Officer Ernest Halliday, CPA, CGMA, STT USVIEDA Senior Accountant Maritza E. Hernandez STT USVIEDA Budget and Financial Analyst Kelly V. Thompson-Webbe STT USVIEDA Accountant II Jana Cammie STT USVIEDA Accountant I Regina Powell STT USVIEDA Accountant II K’Nisha Gumbs STT USVIEDA Custodial Worker Francillia Williams STT USVIEDA Messenger/Service Worker Cuthbert Charlemagne Human Resources STX USVIEDA Human Resources Manager Wendy Wheeler, MBA, CPM STT USVIEDA Human Resources Specialist Shirley J. Jones-Peters Legal STX USVIEDA General Counsel Tracy Lynch Bhola, Esq. STX USVIEDA Paralegal/Investigative Analyst Lisa Mitchell-Harris STX USVIEDA Paralegal/Investigative Analyst Neisha Christopher-Christian Marketing & 2040 Vision STT USVIEDA Managing Director, Marketing & 2040 Vision Shanell Petersen STT USVIEDA Marketing and Public Relations Specialist Semele A.C. George STT USVIEDA Program Manager, Marketing & 2040 Vision Kyle C. Thomas USVIEDA Board STT USVIEDA Board Liaison Carol V. Chapman FY2019 STAFF U.S. VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY 104 / V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report www.usvieda.org www.usvieda.org V.I. ECONOMIC DEVELOPMENT AUTHORITY - FY 2019 Annual Report / 105 Location: Yacht Haven Grande, USVI & IGY Marinas on St. Thomas, U.S. Virgin Islands. - Istockphoto U.S. VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY