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U.S. VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY FISCAL YEAR 2020 BUDGET OCTOBER 1, 2019 – SEPTEMBER 30, 2020 St. Thomas: 8000 Nisky Shopping Center, Suite 620 St. Thomas, U.S. Virgin Islands 00803 (340) 714-1700 www.usvieda.org St. Croix: 116 King Street, Frederiksted St. Croix, U.S. Virgin Islands 00840 (340) 773-6499 www.usvieda.org i U.S.VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY FISCAL YEAR 2020 BUDGET October 1, 2019 – September 30, 2020 TABLE OF CONTENTS I. Introductory Section Chief Executive Officer Budget Message to Chairman of the Legislature’s Committee on Finance....1 Principal Officials............................................................................................................................................... 3 Mission Statement .............................................................................................................................................. 4 Scope and Overview .......................................................................................................................................... 5 Organizational Chart ......................................................................................................................................... 6 Financial Structure ............................................................................................................................................. 7 Accounting System and Financial Reporting Roles and Responsibilities .................................................. 8 USVIEDA Direct and Indirect Cost Allocations ......................................................................................... 9 Goals, Objectives, Performance Measurements, and Performance Evaluations ................................... 11 Annual Budget Processes ................................................................................................................................ 12 II. Departments and Divisions 1.0 Departments ....................................................................................................................... 14 1.1 Board of Directors ....................................................................................................................... 14 1.2 Executive Office .......................................................................................................................... 16 1.3 Administration and Finance Department ................................................................................ 18 1.4 Human Resources (“HR”) Department ................................................................................... 20 1.5 Legal Department ........................................................................................................................ 22 1.6 Marketing / Public Relations Department ............................................................................... 24 1.7 Economic Development Management (“EDM”) ................................................................... 26 U.S. VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY FISCAL YEAR 2020 BUDGET October 1, 2019 – September 30, 2020 TABLE OF CONTENTS ii 2.0 Divisions............................................................................................................................. 27 2.1 V.I. Economic Development Commission (“EDC”) ........................................................... 27 2.1.1 EDC Applications ................................................................................................................... 27 2.1.2 EDC Compliance...................................................................................................................... 29 2.2 Economic Development Bank (“EDB”) ................................................................................. 31 2.2.1 Incubator Program ........................................................................................................ 33 2.3 Enterprise Zone Commission (“EZC”) ................................................................................... 35 2.4 Economic Development Park Corporation (“EDPC”) ......................................................... 37 III. Financial Information 3.1 Revenues ....................................................................................................................................... 38 3.2 Expenditure Comparisons for FY18, FY19 Projected, and FY20 Budgeted .................... 39 3.3 Budget Summary .......................................................................................................................... 40 IV. Supplemental Information Professional Services Breakdown in Detail .................................................................................................. 42 Personnel Service Cost Breakdown by Department and Classification .................................................. 43 Vehicle Listing for USVIEDA ....................................................................................................................... 44 Real Property Leased by the USVIEDA ...................................................................................................... 44 FY 2020 Budget Detail by Department ........................................................................................................ 45 Appropriation and Allotment Comparison.................................................................................................. 46 Glossary of Selected Terms ............................................................................................................................ 47 MESSAGE FROM THE CEO July 18, 2019 The Honorable Kurt A. Vialet Chairman, Committee on Finance 33rd Legislature of the U.S. Virgin Islands Capital Building, P.O. Box 1690 St. Thomas, U.S. Virgin Islands 00804 Re: U.S. Virgin Islands Economic Development Authority’s FY 2020 Budget Submission Dear Senator Vialet: It gives me great pleasure to present the U.S. Virgin Islands Economic Development Authority’s (“USVIEDA” or “Authority”) Fiscal Year 2020 budget for consideration by the Committee on Finance. The Authority is a public corporation and semi-autonomous instrumentality of the Government of the U.S. Virgin Islands. The USVIEDA Fiscal Year 2020 budget is $6,882,865, an increase of $1,000,000 or 16.9% compared to last year’s appropriation. The core mission at the USVIEDA is to promote economic growth, job creation, and wealth generation, and this budget will help create the momentum to build the most resilient island economy within the next two to three years. This year’s budget request is intended to meet our objective of recruiting fifty (50) new companies over the next two (2) years, potentially contributing:  250 new jobs to the local workforce  $12 – $27.4 million in wages and salaries  $6 million in capital investments  $2.5 million in charitable contributions All of these promote a long-term impact on our economy. Our best days are yet to come. USVIEDA FY 2020 Budget Submission July 18, 2019 We look forward to further discuss the budget submission with you and the rest of your colleagues during the budget hearing. Respectfully, Kamal I. Latham Kamal I. Latham Chief Executive Officer U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget U.S. VIRGIN ISLANDS ECONOMIC DEVELOPMENT AUTHORITY FISCAL YEAR BEGINNING OCTOBER 1, 2019 Principal Officials Governing Board1 Board Member Position Kevin A. Rodriquez Chairman Gary Molloy Vice Chairman Haldane Davies, Ph.D. Secretary Positive T. A. Nelson Member Philip Payne Member José A. Penn Member Vacant Member Executive Team Kamal I. Latham, MPP, Chief Executive Officer Wayne L. Biggs, Jr., Assistant Chief Executive Officer Tracy Lynch Bhola, Esq., General Counsel Ernest Halliday, CPA, CGMA, Chief Financial Officer Senior Management Team Margarita Benjamin, Managing Director, Economic Development Nadine Marchena Kean, Managing Director, Enterprise Zone Commission Shanell Petersen, Managing Director, Marketing and 2040 Vision Monique Samuel, Acting Director, Economic Development Bank 1 Seven Member Board has one vacancy as of March 31, 2019. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget Mission Statement The U.S. Virgin Islands Economic Development Authority (“USVIEDA”) is a semi-autonomous governmental agency responsible for promoting and enhancing economic development, and fostering positive public/private sector partnerships to improve the standard of living for residents of the United States Virgin Islands. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget SCOPE AND OVERVIEW The USVIEDA is the unification of four (4) separate entities: the Economic Development Bank for the United States Virgin Islands (“EDB”), the Economic Development Commission (“EDC”), the Economic Development Park Corporation (“EDPC”), and the Enterprise Zone Commission (“EZC”). The functions of each entity have been unified under one Governing Board (“Board”). The Board is comprised of seven (7) members. Three (3) members are employees of the Government of the Virgin Islands or the Government of the United States and are appointed by the Governor, with the advice and consent of the Legislature for a term of three (3) years. Three (3) members must be non-government employees, one must be a resident of St. Thomas, another a resident of St. John, and the other a resident of St. Croix. One (1) member shall be appointed from either the Board or executive staff of the Employees Retirement System of the Government of the Virgin Islands, or the Virgin Islands Port Authority, or the University of the Virgin Islands. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget USVIEDA ORGANIZATIONAL CHART FISCAL YEAR 2019 ORGANIZATIONAL CHART U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget LEGEND *Explains the colors on the USVIEDA Financial and Accounting Structure Chart. Company Division Department U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget ACCOUNTING SYSTEM AND FINANCIAL REPORTING ROLES AND RESPONSIBILITIES The USVIEDA is a public corporation and semi-autonomous instrumentality of the U.S. Virgin Islands and follows enterprise fund accounting and reporting. The financial statements are presented in a manner similar to that of a private business, using the economic resources measurement focus and the accrual basis of accounting. Management prepares a number of financial and statistical reports, including the Financial Statements with Supplementary Information to support the annual audit, and is responsible for the integrity and objectivity of management and financial reporting. Financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States of America, applying certain estimates and judgments as required. The USVIEDA employs internal controls designed to provide reasonable assurance of integrity and reliability of financial reporting and to safeguard, verify, and maintain accountability of assets. Such controls are derived from established written policies and procedures that are implemented by trained and skilled personnel. The USVIEDA’s employment policy prescribes that all employees maintain the highest ethical standards and conduct business practices in a manner above reproach. The USVIEDA engages the services of outside auditors on an annual basis to perform an independent audit of its financial statements, the objective of which is to express an opinion on the financial statements in accordance with Generally Accepted Accounting Principles (GAAP). The Governing Board of the USVIEDA formulates the overall vision of the entity and fulfills its responsibilities of oversight and administration of the Authority’s practices and governance through the actions of the full Board. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget USVIEDA DIRECT AND INDIRECT COST ALLOCATIONS The USVIEDA’s activities can be classified into two (2) distinct categories – the divisional and departmental activities. A division is charged with the responsibility of carrying out the organizational mandates and includes the Economic Development Bank (“EDB”), the Economic Development Commission (“EDC”), the Enterprise Zone Commission (“EZC”) and the Economic Development Park Corporation (“EDPC”). A department provides support to the divisions in fulfilling the organizational mandates and includes the Governing Board, the Executive Office, Administration and Finance, Human Resources (“HR”), Legal, Marketing/Public Relations, and Economic Development Management (“EDM”). The total cost to operate the USVIEDA are classified into two (2) groups, that is, each cost that is incurred is either a direct or indirect cost. A direct cost is a cost that can be identified specifically with a division or department and can be traced with relative ease and a high degree of accuracy to that division or department. An indirect cost is a cost that is incurred in common with other departments and divisions and cannot be traced to any specific division or department. An example of an indirect cost will be rent expense, which a cost incurred together by all divisions and departments. The indirect costs are then distributed to each division and department through an internal indirect cost allocation process. For ease and convenience, total indirect costs are budgeted and expensed in the Economic Development Management (EDM) department. At the end of a given period, the indirect costs accumulated in the EDM department are distributed to the divisions and departments based on a pre- determined indirect cost allocation rate. At the end of a fiscal period, all direct costs would have been posted to each division and department, and all indirect costs would have been allocated from the EDM unit to each division and department, and therefore, the total cost to operate each division and department can be determined. Note that the total cost (direct and indirect) for each department is indirect to the divisions and thus the total departmental costs are then further allocated to the divisions using a pre-determined allocation method. At the end of a fiscal period, the total cost of operating each division within the USVIEDA can be determined, and so is the total cost to operate the USVIEDA, which will be the sum total of all the divisional costs combined. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget GOALS, OBJECTIVES, PERFORMANCE MEASUREMENTS, AND PERFORMANCE EVALUATIONS The establishment of goals, objectives, performance measurements, and performance evaluations provide the strategic operational framework for the USVIEDA. A goal is the end result to be accomplished and answers this question: “What is the purpose in the big picture?” For the USVIEDA, its purpose is to promote economic growth, job creation, and wealth generation. Objectives are the action steps taken to carry out the big picture and serve as benchmarks to measure performance. Each objective has four (4) fundamental characteristics. Using the S.M.A.R.T approach, an objective must be:  Specific: State exactly what is to be achieved;  Measurable: Identify a target or quantifiable outcome;  Achievable: Ensure that sufficient resources are available;  Relevant: Provide an expected direction of change; and  Time-bound: Set a timeframe for completion. Performance measurement is the ongoing monitoring and reporting on program accomplishments compared to the pre-established goals and objectives as outlined by each unit. The development of performance measurements requires careful thought and planning and must include the following basic ingredients: objectivity, relevance, reliability, validity, and indicators of degrees of success. Performance Evaluations are critical, especially in periods of scarce resources, and provide a means of assessing how well the objectives are being met. Evaluations answer key goal-related questions, such as: 1) Are stakeholders getting what they deserve? 2) Are taxpayers getting their money’s worth? 3) Are those we serve better off? 4) Can the service we provide be improved? The achievability of the USVIEDA’s goals and the fulfillment of objectives rest with supervisors and their direct reports, and the budget provides the financial resources to do so. The execution of performance measurement and evaluation functions ensure that scarce resources are used in the most efficient manner for the benefit of residents. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget ANNUAL BUDGET CALENDAR AND PROCESSES The budget formulation process is designed to allow the USVIEDA to fulfill its mission by aligning goals, priorities, and objectives with financial resources and to evaluate actual achievements relative to anticipated outcomes. JANUARY - FEBRUARY The budget formulation process begins with the development of revenue and expenditure projections for the upcoming fiscal year. These projections are combined with comparisons and analyses of past trends (i.e. appropriations, allotments, revenues, and expenditures) in addition to other financial data to justify and support management’s budget recommendations. This process forms the basis for the development of the budget and determines the final budget amount to be submitted to the Office of Management and Budget for consideration and inclusion in the Government of the Virgin Islands’ annual operating budget submission to the Legislature. MARCH The USVIEDA’s budget staff establishes budget ceilings for each division and department consistent with the priorities, goals, and objectives of the agency. This information is communicated to each division or department head through a budget call that provides instructions and guidance for preparing each division’s and department’s budget. The budget staff conducts budget orientation sessions with lead members of each division and department in order to provide guidance, present an overview of the budgeting priorities and to address other budgetary concerns. APRIL - JUNE The budget staff conducts budget review discussions with division and department heads on a one- on-one basis to discuss areas of concerns, goals, new initiatives, or programs each division or department desires to implement for the upcoming fiscal year. During this meeting, each division or department has the opportunity to justify its needs before the Chief Executive Officer and Assistant Chief Executive Officer. By the end of this process, revisions may be made to individual division or department budgets and budget schedules are updated accordingly. JULY The final budget is presented to the USVIEDA Governing Board for consideration and approval before submission to the Legislature’s Post-Audit Division. Communication is maintained with the Post-Audit Division as it analyzes the USVIEDA budget while at the same time the USVIEDA’s budget staff researches, gathers data and conducts round-table sessions with the internal division and department heads in preparing drafts of the Chief Executive Officer’s budget presentation to the Committee on Finance of the Legislature. The Chief Executive Officer, accompanied by the Assistant Chief Executive Officer, General Counsel, Chief Financial Officer, and other Division and Department Managers, defend the USVIEDA budget recommendation before the Committee on Finance of the Legislature. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget ANNUAL BUDGET CALENDAR AND PROCESSES, CONTINUED OCTOBER Once the budget is passed by the Legislature and approved by the Governor, the USVIEDA is legally authorized to request quarterly allotments from the Department of Finance through the Office of Management and Budget. TWELVE (12) MONTHS MONITORING (OCTOBER – SEPTEMBER) Actual revenues and expenditures are monitored throughout the year and are compared and analyzed against the budget to ensure that resources are managed in accordance with the budget plan and are consistent with the goals and objectives of the Authority. Financial analyses are performed and financial presentations are made to the Governing Board. The budget staff offers recommendations to division and department heads in addition to the Governing Board to improve operational efficiencies. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 1.0 USVIEDA DEPARTMENTS The departments within the USVIEDA provide support to the divisions in ensuring that the USVIEDA meets its statutory, regulatory, and legal mandates as required. 1.1 BOARD OF DIRECTORS FUNCTIONAL STATEMENT The powers of the USVIEDA rest in the hands of the Governing Board (“Board”), which sets the vision and acts on behalf of the organization. The Board is responsible for establishing all operating policies, hiring the Chief Executive Officer (“CEO”), approving all major contracts, making policy decisions, and providing oversight. Most importantly, the Board ensures that the organization complies with all applicable laws. OPERATIONAL GOAL(S) Work collaboratively with the USVIEDA’s management team to explore opportunities for economic growth by adapting to the challenges and changes in the global environment. FISCAL YEAR 2019 OBJECTIVES  Conduct performance evaluation of CEO;  Hold an annual board retreat to review practices and implement recommendations;  Develop a comprehensive strategic 5 – 10-year plan for the USVIEDA; and  Review and approve the annual operating budget and evaluate progress toward current year objectives. FISCAL YEAR 2019 ACCOMPLISHMENTS AS OF MARCH 31, 2019  Conducted fifteen (15) board and decision meetings and two (2) public hearings; and  Promoted economic development by representing the Authority at numerous events and community meetings. FISCAL YEAR 2020 OBJECTIVES  Develop policies to increase access to advanced education, workforce development, and tailored job-training opportunities;  Participate in at least four (4) marketing events and activities to enhance business recruitment, and retention/expansion efforts; and  Conduct performance evaluation of CEO and Board Self-Assessment. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget Board of Directors Year End Financial Summary FY 18 Actual, FY 19 Projected, and FY 20 Budget by Expense Category FY 2018 FY 2019 FY 2020 Expenditures Actual Projection Budget Personnel Services 62,225 63,469 64,739 Fringe Benefits 24,389 24,072 24,429 Supplies 513 500 500 Other Services & Charges -1,435 30,462 46,347 Professional Services 0 0 0 Inter-Island Travel 7,658 10,000 25,000 Utilities 3,039 4,000 4,500 Total Expenditures (Direct Cost Only) 96,387 132,503 165,515 2-Key Performance Indicators (KPI) Actual FY 18 Target FY 19 Actual FY 19 (as of 3/31/19) Planned FY 20 Number of marketing events participated in to enhance business recruitment n/a 6 3 10 Number of policies developed tailored to job- training opportunities for residents n/a 2 0 5 U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 1.2 EXECUTIVE OFFICE FUNCTIONAL STATEMENT The Chief Executive Officer (“CEO”) and the Assistant Chief Executive Officer (“ACEO”) provide overall leadership and direction in the planning, development, and administration of policies governing the operation of the USVIEDA. This department ensures that those responsibilities established by statute and other policy directives are executed at the highest level. OPERATIONAL GOAL(S) Direct and monitor the activities of the USVIEDA to ensure that human and capital assets are safeguarded and optimized. Maintain a positive work climate conducive to attracting, retaining, and motivating a diverse group of top-quality performers to achieve the goals of the organization. FISCAL YEAR 2019 OBJECTIVES  Draft revisions and update rules and regulations for the Hotel Development Act;  Amend rules and regulations for the STARS Program;  Continue working on formulating rules and regulations for the International Financial Services Entities Program, Economic Development Commission, Enterprise Zone Commission, Economic Development Bank, and the Youth Recreational Incentive Act; and  Devise strategies to attract new investment to the Territory focusing on the hotel and resort, financial, and high-value manufacturing sectors. FISCAL YEAR 2019 ACCOMPLISHMENTS AS OF MARCH 31, 2019  Marketed the Territory to private equity and venture capital funds at a conference in New York;  Conducted multiple EDC beneficiary site visits;  Launched discussions with a non-profit organization that could provide a small business development program focusing on women entrepreneurs;  Submitted economic recovery grant proposals to the U.S. Economic Development Administration (EDA);  Signed a Strategic Alliance Memorandum with the U.S. Small Business Administration to foster small-business entrepreneurship in the US Virgin Islands;  Launched discussions with a business mentoring organization that could provide loans and mentorship opportunities to local small businesses and entrepreneurs;  Received the 2018 Disaster Recovery Advocate of the Year Award by Florida’s Minority Business Development Agency for providing economic services and resources to small and minority-owned business in the U.S. Virgin Islands following Hurricanes Irma and Maria; U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget FISCAL YEAR 2019 ACCOMPLISHMENTS AS OF MARCH 31, 2019, CONTINUED  Launched the Governor’s Vision 2040 initiative, a 20-year Economic Development Plan for the Territory;  Worked on revisions to the STARS, TIF, and Hotel Development Act legislation;  Testified before the Senate to provide an update on the USVIEDA; and  Submitted Community Development Block Grant – Disaster Recovery (“CDBG-DR”) grant proposal to the V.I. Housing Finance Authority. FISCAL YEAR 2020 OBJECTIVES  Launch the Qualified Opportunity Zone Program in the USVI;  Increase the number of EDC beneficiaries in the EDC Program by twenty-five (25);  Renew interest in the EB-5 Investor Program as an economic development tool to finance job- creating projects;  Continue to devise and execute strategies to attract new investments focusing on hotels and resorts, financial services, and high-value manufacturing;  Continue working on formulating rules and regulations for the International Financial Services Entities Program, Economic Development Commission, Enterprise Zone Commission, Economic Development Bank, and the Youth Recreational Incentive Act;  Promote the USVI to Ultra High Net Worth and High Net Worth Individuals; and  Launch a global trade and investment program targeting Europe, Asia, and Africa. Executive Office Year End Financial Summary FY 18 Actual, FY 19 Projected, and FY 20 Budget by Expense Category FY 2018 FY 2019 FY 2020 Expenditures Actual Projection Budget Personnel Services 350,932 534,285 804,709 Fringe Benefits 110,973 161,722 236,964 Supplies 1,253 600 855 Other Services & Charges 15,723 25,654 15,770 Professional Services 0 0 0 Inter-Island Travel 17,699 15,419 15,000 Utilities 5,004 3,500 4,800 Total Expenditures (Direct Cost Only) 501,585 741,180 1,078,098 2-Key Performance Indicators (KPI) Actual FY 18 Target FY 19 Actual FY 19 (as of 3/31/19) Planned FY 20 Number of partnership collaborations formed 11 10 2 5 Number of economic development initiatives undertaken 3 3 2 6 U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 1.3 ADMINISTRATION AND FINANCE DEPARTMENT FUNCTIONAL STATEMENT The Administration and Finance Department performs financial planning, accounting, and reporting functions for both external and internal users. It is responsible for establishing relationships with auditors, financial institutions, Post-Audit Division of the Legislature, and others within the financial community. It takes a leading role in developing proposals and policies on strategic issues that affect the long-term financial integrity and competitiveness of the USVIEDA. Financial policies, procedures, and the establishment of financial and management controls are formulated and executed within this department. OPERATIONAL GOAL(S) Provide quality customer and stakeholder services, and practice responsible stewardship of financial resources, while aspiring to excellence in financial and administrative practices to improve the overall efficiency of the organization. FISCAL YEAR 2019 OBJECTIVES  Develop a long-term plan for USVIEDA financial self-sufficiency;  Facilitate the financial audit of the USVIEDA;  Update the Authority’s Fixed Asset Schedule;  Complete the Authority’s Procurement Policy Handbook for Board approval;  Update the Authority’s Accounting Manual; and  Provide BizNet and MAS 500 training for all staff members. FISCAL YEAR 2019 ACCOMPLISHMENTS AS OF MARCH 31, 2019  Facilitated the financial audit of the USVIEDA and received an unqualified audit opinion for the ninth consecutive year;  Drafted new USVIEDA Procurement Policy;  Updated the USVIEDA Accounting and Financial Structure; and  Continued updating the USVIEDA Fixed Asset Schedules by departments and programs. FISCAL YEAR 2020 OBJECTIVES  Explore the feasibility of the USVIEDA constructing a Class A office space on St. Thomas;  Explore relocating the USVIEDA’s St. Croix Office;  Begin processing vendor payments via ACH; and  Explore revenue generating strategies to enhance the USVIEDA’s operating budget to meet current and future needs. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget Administration and Finance Year End Financial Summary FY 18 Actual, FY 19 Projected, and FY 20 Budget by Expense Category FY 2018 FY 2019 FY 2020 Expenditures Actual Projection Budget Personnel Services 364,332 356,840 487,429 Fringe Benefits 147,945 159,729 211,478 Supplies 1,325 500 500 Other Services & Charges 17,698 18,921 19,175 Professional Services 8,444 2,500 0 Inter-Island Travel 3,772 1,000 2,500 Utilities 656 850 850 Total Expenditures (Direct Cost Only) 544,173 540,339 721,932 2-Key Performance Indicators (KPI) Actual FY 18 Target FY 19 Actual FY 19 (as of 3/31/19) Planned FY 20 Number of feasibility studies completed n/a n/a n/a 2 Number of revenue generating strategies explored n/a n/a n/a 5 U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 1.4 HUMAN RESOURCES (“HR”) DEPARTMENT FUNCTIONAL STATEMENT The Human Resources (“HR”) Department is responsible for talent management and workforce development to include staff recruitment, position classification, benefits counseling, and employee and labor relations. OPERATIONAL GOAL(S) Provide an organizational framework to strategically develop and retain a workforce capable of supporting the economic development objectives of the USVIEDA. FISCAL YEAR 2019 OBJECTIVES  Continue to measure and gauge employee satisfaction through the use of online surveys;  Provide professional development trainings to improve leadership, team-building, and communication skills;  Monitor the performance management system; and  Continue to promote health and wellness workplace programs to encourage healthy lifestyles. FISCAL YEAR 2019 ACCOMPLISHMENTS AS OF MARCH 31, 2019  Provided leadership and guidance to re-establish the USVIEDA Employee Relations Committee (“ERC”), which is a “bottom-up” initiative to improve employee morale;  Coordinated Fire Safety and Extinguisher training;  Coordinated the annual biometric screening in the St. Thomas/St. John district;  Began recruitment efforts for the hiring of the Chief Operating Officer, Chief Global Business Officer, Associate General Counsel, Accountant I, and Custodial Workers; and  Planned and executed the annual Employee Appreciation Day activities that involved employee recognition awards and team-building exercises. FISCAL YEAR 2020 OBJECTIVES  Work with the Legal Department to review and update personnel policies and procedures;  Launch a new performance management and appraisal system;  Create a Train, Empower, Accountable (“TEA”) Leadership Program by June 30, 2019;  Coordinate at least one (1) training per quarter at a minimum; and  Conduct an employee satisfaction survey to determine the training levels and requirements of employees. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget Human Resources Year End Financial Summary FY 18 Actual, FY 19 Projected, and FY 20 Budget by Expense Category FY 2018 FY 2019 FY 2020 Expenditures Actual Projection Budget Personnel Services 142,739 145,594 148,506 Fringe Benefits 56,609 50,201 50,424 Supplies 241 1,000 500 Other Services & Charges 22,194 31,087 35,292 Professional Services 0 0 0 Inter-Island Travel 2,733 2,500 2,500 Utilities 884 500 500 Total Expenditures (Direct Cost Only) 225,401 230,882 237,722 2-Key Performance Indicators (KPI) Actual FY 18 Target FY 19 Actual FY 19 (as of 3/31/19) Planned FY 20 Number of internal personnel policies and procedures updated 1 1 0 1 Number of employee trainings conducted 10 10 4 10 U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 1.5 LEGAL DEPARTMENT FUNCTIONAL STATEMENT The Legal Department provides a broad range of legal services that include providing legal analyses, preparing and reviewing legal documents, and conducting background investigations on prospective employees and EDC and EDB applicants. This department also provides legal and policy guidance to the USVIEDA’s Governing Board, drafts legislation, and develops rules and regulations consistent with legislative mandates. OPERATIONAL GOAL(S) Ensure that the organization is in compliance with all applicable laws, institutes measures to prevent litigation and loss of assets, and maintains the USVIEDA’s legal image of integrity, professionalism, and fairness. FISCAL YEAR 2019 OBJECTIVES  Coordinate the drafting of rules and regulations;  Draft and amend USVIEDA internal policies and procedures;  Review and draft statutory agreements necessary to accomplish the mandates of the USVIEDA;  Draft and amend USVIEDA Governing Board resolutions, motions, and orders; and  Draft professional service contracts, leases, and show cause orders for the USVIEDA and its subsidiary entities. FISCAL YEAR 2019 ACCOMPLISHMENTS AS OF MARCH 31, 2019  Drafted and fully executed a wide range of professional service contracts and lease agreements;  Drafted and amended USVIEDA internal policies and procedures;  Drafted and amended USVIEDA Governing Board resolutions, motions and orders; and  Prepared and reviewed statutory agreements necessary to accomplish the mandates of the USVIEDA. FISCAL YEAR 2020 OBJECTIVES  Coordinate the drafting of rules and regulations;  Review and daft statutory agreements necessary to accomplish the manatees of the USVIEDA;  Draft and amend USVIEDA internal policies and procedures;  Draft and amend USVIEDA Governing Board resolutions, motions, and orders; and  Draft professional service contracts, leases, and show cause orders for the USVIEDA and its subsidiary entities. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget Legal Department Year End Financial Summary FY 18 Actual, FY 19 Projected, and FY 20 Budget by Expense Category FY 2018 FY 2019 FY 2020 Expenditures Actual Projection Budget Personnel Services 229,311 252,436 328,679 Fringe Benefits 73,591 114,768 118,519 Supplies 163 1,200 250 Other Services & Charges 7,596 16,675 13,950 Professional Services 0 0 0 Inter-Island Travel 3,731 600 850 Utilities 620 800 1,000 Total Expenditures (Direct Cost Only) 315,011 386,479 463,248 2-Key Performance Indicators (KPI) Actual FY 18 Target FY 19 Actual FY 19 (as of 3/31/19) Planned FY 20 Number of rules and regulations drafted and/or promulgated 8 12 6 12 Number of professional contracts and leases reviewed, drafted and/or executed 10 17 8 17 U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 1.6 MARKETING / PUBLIC RELATIONS DEPARTMENT FUNCTIONAL STATEMENT The key responsibilities of this department are to promote the U.S. Virgin Islands as the best place for businesses to relocate and promote the many services that are being offered to local businesses and the general public to promote economic growth, job creation, and wealth generation. OPERATIONAL GOAL(S) Utilize various marketing tools in order to attract new businesses to relocate to the Territory, and to grow and expand businesses that currently exist in the Territory. FISCAL YEAR 2019 OBJECTIVES  Provide additional local marketing activities to expose USVIEDA’s programs and services to businesses;  Continue promoting the EDC program nationally to attract prospective investors and advisors;  Use data mining techniques to help make marketing decisions thus allocating resources in areas that provide the greatest return on investments; and  Re-evaluate and update the USVIEDA’s Marketing and Strategic Plan to better serve the current objectives of the USVIEDA. FISCAL YEAR 2019 ACCOMPLISHMENTS AS OF MARCH 31, 2019  Redesigned the USVIEDA’s website to send the message that the U.S. Virgin Islands is “open for business”;  Created jump sites to measure the return on investment (ROI) on marketing activities;  Attended three (3) marketing missions: Private Wealth Latin America and Caribbean Forum (Miami, Florida), Americas Lodging and Investment Summit (Los Angeles, California), EXPO Puerto Rico 2019 (San Juan, Puerto Rico);  Drafted a media relations policy and strategic marketing plan to better communicate the products and services offered by the USVIEDA;  Conducted focus group interviews to ensure the new website design and promotional campaigns are received positively by internal and external stakeholders;  Ran a 3-month ad on the Super Screen in Time Square, New York, highlighting the USVIEDA Tax Incentive Program; U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget FISCAL YEAR 2019 ACCOMPLISHMENTS AS OF MARCH 31, 2019, CONTINUED  Strategically marketed the USVIEDA’s products and services nationally and internationally through print and digital media;  Updated the USVIEDA Marketing and Strategic Plan;  Engaged the community and public about the USVIEDA program and services through a diverse social media campaign; and  Boosted local event sponsorship and presence at Paradise Jam, St. Croix Crucian Christmas Carnival, Taste of Two Islands, and Agriculture and Food Fair “AgriFest”. FISCAL YEAR 2020 OBJECTIVES  Increase the number of EDC beneficiaries in the EDC Program by twenty-five (25);  Update the USVIEDA Strategic Marketing Plan to align with current market trends;  Expand promotion of the EDC Tax Incentive Program to Europe, Asia, and Africa;  Promote USVI to Ultra High Net Worth and High Net Worth Individuals; and  Build community awareness through a USVIEDA podcast, sponsorship of community events, and radio advertisements. Marketing and Public Relations Year End Financial Summary FY 18 Actual, FY 19 Projected, and FY 20 Budget by Expense Category FY 2018 FY 2019 FY 2020 Expenditures Actual Projection Budget Personnel Services 70,366 180,524 256,271 Fringe Benefits 28,685 60,479 97,170 Supplies 884 600 600 Other Services & Charges 241,573 375,385 1,478,772 Professional Services 246,381 47,017 0 Inter-Island Travel 1,767 5,000 3,000 Utilities 69 500 500 Total Expenditures (Direct Cost Only) 589,725 669,505 1,836,313 2-Key Performance Indicators (KPI) Actual FY 18 Target FY 19 Actual FY 19 (as of 3/31/19) Planned FY 20 Number of targeted marketing events completed 6 12 7 12 Number of external site visits made by potential EDC beneficiaries and/or advisors 0 20 5 30 U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 1.7 ECONOMIC DEVELOPMENT MANAGEMENT (EDM) FUNCTIONAL STATEMENT The EDM acts as the general fund for the organization, and as such, operating revenues are recorded and all indirect costs are budgeted and expensed in this department. OPERATIONAL GOAL(S) Allows for the efficient management and proper analysis of revenues and expenses to assist management in making financial and management decisions. FISCAL YEAR 2019 OBJECTIVES  Rely more on financial data to help support management decisions FISCAL YEAR 2019 ACCOMPLISHMENTS AS OF MARCH 31, 2019  Realigned cost structure to provide better information for reporting and management analysis FISCAL YEAR 2020 OBJECTIVES  Reduce the level of indirect cost through analysis of expenditures to improve the efficiency of the organization. EDM - Indirect Cost Year End Financial Summary FY 18 Actual, FY 19 Projected, and FY 20 Budget by Expense Category FY 2018 FY 2019 FY 2020 Expenditures Actual Projection Budget Personnel Services 60,553 59,041 0 Fringe Benefits 38,372 38,549 0 Supplies 26,826 19,328 27,500 Other Services & Charges 797,753 661,154 705,551 Professional Services 313,481 261,500 261,500 Inter-Island Travel 11,925 15,000 15,000 Utilities 130,955 126,086 126,600 Total Expenditures (Direct Cost Only) 1,379,866 1,180,657 1,136,151 2-Key Performance Indicators (KPI) Actual FY 18 Target FY 19 Actual FY 19 (as of 3/31/19) Planned FY 20 Percentage of times expenses are posted correctly to general ledger accounts 80% 95% 90% 100% Percentage of indirect cost to overall cost in operating the USVIEDA 30% 20% 21% 18% U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 2.0 USVIEDA DIVISIONS The divisions within the USVIEDA are charged with the responsibility of fulfilling the mandates for which the organization was established. 2.1 V.I. ECONOMIC DEVELOPMENT COMMISSION FUNCTIONAL STATEMENT The Economic Development Commission (“EDC”) is charged with promoting the growth, development, and diversification of the economy of the United States Virgin Islands. The EDC is comprised of the Applications Department, which is the first point of contact for a business seeking to apply for economic development benefits, and the Compliance Department, which monitors and provides customer care services to beneficiaries in ensuring that these businesses are in compliance with the terms and conditions of their agreements and other requirements of law. 2.1.1 EDC APPLICATIONS DEPARTMENT OPERATIONAL GOAL(S) Review and analyze applications for EDC benefits, and to provide support and advice to the USVIEDA’s Governing Board in its consideration of applicants’ requests for EDC benefits. FISCAL YEAR 2019 OBJECTIVES  Begin accepting EDC Applications electronically by the first quarter of the fiscal year;  Coordinate and host USVIEDA Town Hall Meetings relative to the EDC Program;  Evaluate Client Survey responses to improve customer services;  Engage stakeholders by facilitating Workforce Development Initiatives; and  Participate in community outreach programs and seminars, such as: EDC Career Fair, Beneficiary Summit, and Consultants’ Seminar to educate the public on the EDC Program. FISCAL YEAR 2019 ACCOMPLISHMENTS AS OF MARCH 31, 2019  Reviewed and analyzed three (3) applications for economic development benefits: one (1) new, one (1) extension/modification, and one (1) transfer;  Processed twelve (12) Eligible VI Supplier applications;  Presented nine (9) applications and eight (8) petitions to the EDC Governing Board for consideration; and  Continued developing the EDC online application. FISCAL YEAR 2020 OBJECTIVES  Begin processing EDC Applications through the EDC online application portal;  Participate in community outreach programs, informational, and other marketing initiatives; and  Continue to meet and/or exceed the required number of days to process EDC Applications. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget EDC Applications Department Year End Financial Summary FY 18 Actual, FY 19 Projected, and FY 20 Budget by Expense Category FY 2018 FY 2019 FY 2020 Expenditures Actual Projection Budget Personnel Services 243,902 283,593 353,863 Fringe Benefits 100,198 107,995 138,334 Supplies 511 500 500 Other Services & Charges 26,192 29,183 29,173 Professional Services 20,818 15,000 10,000 Inter-Island Travel 4,638 1,500 2,500 Utilities 911 700 700 Total Expenditures (Direct Cost Only) 397,171 438,470 535,070 2-Key Performance Indicators (KPI) Actual FY 18 Target FY 19 Actual FY 19 (as of 3/31/19) Planned FY 20 Average number of days to complete analysis of an EDC application for Public Hearing 29 days 30 days 23 days 30 days Number of community outreach programs participated in 5 6 2 8 U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 2.1.2 EDC COMPLIANCE DIVISION FUNCTIONAL STATEMENT The Compliance Department provides customer care services to EDC beneficiaries to maintain the integrity of the Economic Development Program. Beneficiaries that are not in compliance with their Certificates are brought before the EDC Governing Board, which has the legal authority to assess fines or penalties, and to terminate benefits. OPERATIONAL GOAL(S) Build and maintain good relations with the EDC beneficiaries by providing assistance that enables them to be in good standing and remain a vital part of the community. FISCAL YEAR 2019 OBJECTIVES  Continue towards bringing all Beneficiaries to three (3) year review cycles;  Implement the use of a “Contract Compliance Officer Pool” to expedite the review process;  Monitor the rehabilitation/reconstruction of all major hotels affiliated with the EDC; and  Provide compliance officer training in both districts. FISCAL YEAR 2019 ACCOMPLISHMENTS AS OF MARCH 31, 2019  Completed seven (7) compliance reviews;  Presented two (2) beneficiary petitions to the EDC Governing Board for public hearing;  Presented twelve (12) beneficiary petitions to the EDC Governing Board for consideration;  Performed fifteen (15) beneficiary site visits and thirteen (13) beneficiary orientations; and  Had one (1) beneficiary appear before the EDC Board to show cause for why its incentives should not be revoked, suspended, or modified. FISCAL YEAR 2020 OBJECTIVES  Complete the EDC Beneficiary Compliance Handbook;  Update the EDC Compliance Standard Operating Procedural Manual;  Monitor the rehabilitation/reconstruction of all major hotels affiliated with the EDC Program;  Continue towards bringing all Beneficiaries to three (3) year review cycles; and  Provide “Compliance Best Practice” trainings for staff to enhance efficiency and timeliness of compliance review process. 2-Key Performance Indicators (KPI) Actual FY 18 Target FY 19 Actual FY 19 (as of 3/31/19) Planned FY 20 Number of Compliance Reviews Completed 16 30 7 30 Number of Site Visits 18 45 15 71 U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget EDC Compliance Department Year End Financial Summary FY 18 Actual, FY 19 Projected, and FY 20 Budget by Expense Category FY 2018 FY 2019 FY 2020 Expenditures Actual Projection Budget Personnel Services 416,938 414,663 359,461 Fringe Benefits 174,636 152,733 149,092 Supplies 567 500 500 Other Services & Charges 82,205 83,110 97,230 Professional Services 17,619 8,500 8,500 Inter-Island Travel 9,862 2,500 2,000 Utilities 269 350 350 Total Expenditures (Direct Cost Only) 702,095 662,356 617,133 U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 2.2 ECONOMIC DEVELOPMENT BANK FUNCTIONAL STATEMENT The Economic Development Bank (“EDB”) provides equity infusion to help new minority, small, and medium-sized, and other existing businesses, to grow into mainstream commercial banking customers. The EDB also works with local commercial banks by providing loan guarantees to reduce the risks to the banks. OPERATIONAL GOAL(S) Helps to grow small and medium sized businesses by providing capital, technical, and managerial assistance to facilitate employment growth and opportunities. FISCAL YEAR 2019 OBJECTIVES  Reduce the loan delinquency rate to at least 30%;  Increase the loan portfolio by a minimum of $1.8M;  Provide professional development training for staff in credit administration and collections;  Continue partnering with local banks to promote the State Small Business Credit Initiative (“SSBCI”) Loan Program; and  Continue collaborating with other related government agencies to promote loan programs and services. FISCAL YEAR 2019 ACCOMPLISHMENTS AS OF MARCH 31, 2019  Reduced the delinquency rate to two percent (2%) of the loan portfolio after restructuring and refinancing of troubled loans;  Approved six (6) new loans totaling approx. $1.3M; and  Reviewed seven (7) loan applications totaling $1.6M. FISCAL YEAR 2020 OBJECTIVES  Increase the loan portfolio by a minimum of $2.5M;  Continue partnering with local banks to promote the SSBCI loan program;  Administer Phase II of the V.I. Energy Office’s Solar Energy Program, which provides financing to homeowners and businesses to reduce energy consumption costs;  Continue collaborating with other related government agencies and private organizations to promote the EDB’s loan programs and services; and  Partner with the V.I. Housing Finance Authority to administer a bonding program for small businesses. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget Economic Development Bank Year End Financial Summary FY 18 Actual, FY 19 Projected, and FY 20 Budget by Expense Category FY 2018 FY 2019 FY 2020 Expenditures Actual Projection Budget Personnel Services 324,835 259,723 274,441 Fringe Benefits 119,020 81,321 96,385 Supplies 755 500 500 Other Services & Charges 21,132 32,586 34,056 Professional Services 106,885 150,000 90,000 Inter-Island Travel 3,042 3,500 3,000 Utilities 909 800 800 Total Expenditures (Direct Cost Only) 576,578 528,430 499,183 2-Key Performance Indicators (KPI) Actual FY 18 Target FY 19 Actual FY 19 (as of 3/31/19) Planned FY 20 Loan Delinquency Rate 21% 30% 2% 2% Dollar value of loans and guarantees approved 0 $2.5M $1.3M $2.5M U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 2.2.1 INCUBATOR PROGRAM FUNCTIONAL STATEMENT The Incubator Program is designed to help new companies and start-ups develop into full-fledged businesses by providing management training and other assistance that will enable these businesses to grow and contribute to the economic development of the Territory. OPERATIONAL GOAL(S) Engage, support, and assist entrepreneurs to develop sustainable businesses within the Territory. FISCAL YEAR 2019 OBJECTIVES  Host a Young CEO Camp in both the St. Thomas-St. John and St. Croix districts;  Assist and refer at least ten (10) clients to EDB financing;  Assist and refer at least two (2) clients to EDC for EDC benefits; and  Apply for grants to supplement the Incubator Program and modernization projects. FISCAL YEAR 2019 ACCOMPLISHMENTS AS OF MARCH 31, 2019  Awarded a $50,000 grant from the USDA – Rural Business Development Program;  Applied for a $100,000 grant to conduct a feasibility study for a food incubator on St. Croix;  Assisted and referred four (4) clients to EDB for possible financing; and  Assisted and referred one (1) client to the EDC for possible approval of Small Business benefits. FISCAL YEAR 2020 OBJECTIVES  Apply for grants to supplement the Incubator Program’s operations and initiatives;  Conduct new seminars and workshops every quarter geared toward business industry sectors, to include Aquaponics, Food Production, Manufacturing, and Technology;  Assist and refer at least eight (8) clients to the EDB for funding;  Assist and refer at least one (1) client to EDC for the small business program;  Conduct surveys of EDC Eligible Supplier companies to offer assistance of support services;  Attract and refer at least five (5) clients to the SBA Emerging Leaders Program; and  Integration of Minority Business Development Agency program and services into USVIEDA agency. KEY PERFORMANCE INDICATORS (KPI) Actual FY 18 Target FY19 Actual FY 2019 (as of 3/31/19) Planned FY 20 Number of entrepreneurs assisted 30 20 20 20 Number of new seminars and workshops conducted 0 4 1 4 U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget Incubator Program Year End Financial Summary FY 18 Actual, FY 19 Projected, and FY 20 Budget by Expense Category FY 2018 FY 2019 FY 2020 Expenditures Actual Projection Budget Personnel Services 105,261 82,675 116,484 Fringe Benefits 37,992 36,763 53,010 Supplies 0 2,500 2,500 Other Services & Charges 0 24,500 24,500 Professional Services 0 65,000 65,000 Inter-Island Travel 0 7,000 7,000 Utilities 0 1,000 1,000 Total Expenditures (Direct Cost Only) 143,253 219,438 269,494 U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 2.3 ENTERPRISE ZONE COMMISSION FUNCTIONAL STATEMENT The Enterprise Zone Commission (“EZC”) is responsible for the revitalization of designated blighted and severely distressed areas in the U.S. Virgin Islands that were once social and economically vibrant communities. The EZC provides tax incentives and economic development benefits and helps to reduce fiscal and regulatory constraints that hinder economic growth. In addition, the EZC encourages collaboration between public, private, and non-profit entities in support of economic growth and development. OPERATIONAL GOAL(S) Promote economic growth through revitalizations and business expansion opportunities utilizing public/private partnerships to create jobs, sustain community self-sufficiency and involvement. FISCAL YEAR 2019 OBJECTIVES  Complete eight (8) scrape and paint, two (2) rehabilitation, and four (4) board-up projects;  Conduct the EntrepreNow Program and a community building presentation within each of the schools in the zones;  Conduct an Estate Planning Seminar to provide the latest trends in estate and long-term care planning;  Conduct open house events to provide information about the resources available through the EZC, its partners and stakeholders;  Actively promote the EZC tax incentive program and strengthen the compliance component; and  Conduct a beneficiary conference, USVIEDA Expo, and Business-to-Business events. FISCAL YEAR 2019 ACCOMPLISHMENTS AS OF MARCH 31, 2019  Partnered with the V.I. Council on the Arts to launch a “Made in the USVI” Pop Up Shop showcasing local vendors’ products to tourists and residents;  Continued to broaden awareness of the Enterprise Zone Program through a targeted marketing campaign focusing on the 18-35 year old demographic;  Completed the Agro Processing Feasibility Study;  Hosted EZC Beneficiary and Stakeholder Conferences; and  Continued to strengthen ties with potential financial donors from Denmark. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget FISCAL YEAR 2020 OBJECTIVES  Survey approximately 1,200 buildings throughout the zones;  Graduate at least twelve (12) new Gentlemen of EntrepreNow;  Assist approximately fifty (50) businesses/residents with Enterprise Zone related services; and  Host two (2) Estate Planning Conferences to inform the public of the responsibilities associated with multiple-ownership of real estate. 2-KEY PERFORMANCE INDICATORS (KPI) Actual FY 18 Target FY 19 Actual FY 2019 (as of 3/31/19) Planned FY 20 Number of Gentlemen of EntrepreNow Graduated 6 10 6 12 Number of individuals/businesses assisted with EZC related services 40 50 30 60 Enterprise Zone Commission Year End Financial Summary FY 18 Actual, FY 19 Projected, and FY 20 Budget by Expense Category FY 2018 FY 2019 FY 2020 Expenditures Actual Projection Budget Personnel Services 244,485 254,804 261,633 Fringe Benefits 88,547 91,645 92,780 Supplies 2,795 3,146 3,000 Other Services & Charges 23,021 41,201 36,750 Professional Services 1,179 4,400 15,000 Inter-Island Travel 5,649 2,000 2,000 Utilities 1,180 500 500 Total Expenditures (Direct Cost Only) 366,856 397,695 411,663 U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 2.4 ECONOMIC DEVELOPMENT PARK CORPORATION FUNCTIONAL STATEMENT The Economic Development Park Corporation (“EDPC”) is chartered as a public corporation to acquire and operate industrial parks in the U.S. Virgin Islands, and complements the activities of the Economic Development Commission (“EDC”). The EDPC is supported by revenues it generates from tenants. The EDPC has two locations, one on St. Croix known as William D. Roebuck Industrial Park and the other on St. Thomas located in Estate Contant. OPERATIONAL GOAL(S) Support economic development by offering rental space for commercial use, and to maintain and upgrade the facilities to retain and attract new tenants. FISCAL YEAR 2019 OBJECTIVES  Install and have fully operational, the micro-grid at the William D. Roebuck Industrial Park;  Complete the construction of the main entrance to the William D. Roebuck Industrial Park;  Install generators at both Industrial Park facilities;  Complete the energy efficiency upgrades to the William D. Roebuck Industrial Park;  Complete the reconditioning of the Frederiksted office building;  Install PV street lighting at both Industrial Park facilities; and  Install chlorine injection systems in all Industrial Park building water supply systems on St. Thomas and St. Croix to help meet federal clean water requirements. FISCAL YEAR 2019 ACCOMPLISHMENTS AS OF MARCH 31, 2019  Installed energy efficient lighting at the William D. Roebuck Industrial Park;  Repaired hurricane damaged roof at Bay #3 in the St. Thomas location; and  Entered into lease agreements with two (2) tenants at the St. Thomas location. FISCAL YEAR 2020 OBJECTIVES  Rent 100% of available space at the William D. Roebuck Industrial Park; and  Completely repair all hurricane damaged roofs, install electronic entrance gates, and re-paint all buildings on both William D. Roebuck and St. Thomas Industrial Parks. Key Performance Indicators (KPI) Actual FY 18 Target FY 19 Actual FY 19 (as of 3/31/19) Planned FY 20 Number of capital projects completed 3 4 1 10 Percentage of rentable space occupied 87% 100% 81% 95% U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget Gov't Allotment, $6,882,865 , 86% EDC Transfer, $1,036,462 , 13% Loan Fees, $1,250 , 0% Interest Income, $29,196 , 1% Other Income, $21,748 , 0% USVIED $1,088,656 14% Fiscal Year 2020 Budgeted Revenues from Operating Activities 3.0 FINANCIAL INFORMATION 3.1 REVENUES The USVIEDA’s operating revenue is derived from two (2) primary sources: government allotments and those generated internally by the USVIEDA. Internally generated revenues include EDC activation, application, and compliance fees received from beneficiaries. The amounts collected are deposited into the EDC Industrial Promotion Fund and annually, an amount is transferred from this fund to help support the EDC budget. Other internally generated revenues consist of non-restricted interests from interest bearing accounts and amounts collected in loan originating and loan application fees. Revenues FY 2018 Actual FY 2019 Projection FY 2020 Budget Interest Income $ 39,633 $ 29,196 $ 29,196 Transfer: EDC Industrial Promotion Fund 703,515 703,515 1,036,462 Loan Application / Processing Fee 150 1,550 1,250 Other 297,097 10,810 21,748 Total USVIEDA Revenue $ 1,040,395 $ 745,071 $ 1,088,656 Plus: Government Allotment 4,797,707 5,382,865 6,882,865 Total Revenues $ 5,838,102 $ 6,127,936 $ 7,971,521 U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 3.2 EXPENDITURE COMPARISONS FOR FY18 ACTUAL, FY19 PROJECTED, AND FY20 BUDGETED Actual Actual Projected Projected Budget FY 2018 10/1/18-3/31/19 4/1-9/30/19 FY 2019 FY 2020 Personnel Services Classified Employees 1,595,685 741,524 894,237 1,635,761 1,704,441 Unclassified Employees 1,020,196 542,294 709,591 1,251,884 1,751,774 Lump Sum Payment - 7,500 - 7,500 - All Other 674 2,915 - 2,915 - Total Personnel Services 2,616,555 1,294,232 1,603,828 2,898,060 3,456,215 Capital Outlay Machinery & Equipment 129,043 1,769 53,231 55,000 55,000 Total Capital Outlay 129,043 1,769 53,231 55,000 55,000 Fringe Benefits Employer Contribution Retirement 478,037 217,449 308,462 525,911 577,372 FICA 162,310 80,061 98,771 178,833 214,285 Medicare 37,960 18,724 23,100 41,824 50,114 Health Insurance Premiums 321,977 142,434 180,560 322,994 426,814 Total Fringe Benefits 1,000,284 458,669 610,892 1,069,561 1,268,586 Supplies Office Supplies 35,833 12,004 18,870 30,874 37,705 Total Supplies 35,833 12,004 18,870 30,874 37,705 Other Services & Charges Professional Services 714,807 150,069 403,847 553,917 450,000 Communication 53,052 26,965 35,535 62,500 64,500 Travel 72,476 26,092 39,927 66,019 80,350 Advertising and Promotion 307,226 142,132 288,301 430,432 1,542,822 Printing and Binding 6,855 1,298 11,007 12,305 12,300 Insurance 48,795 - 62,800 62,800 62,800 Repairs and Maintenance 102,562 36,398 38,602 75,000 75,000 Rental - Land/Building 270,996 130,941 142,185 273,126 273,126 Training 25,221 12,988 109,500 122,488 127,000 All Other 362,953 170,027 168,740 338,767 388,518 Total Other Services and Charges 1,964,942 696,910 1,300,444 1,997,354 3,076,416 Utiltiy Electricity 88,230 38,757 37,243 76,000 76,000 Water 3,213 486 600 1,086 1,600 Total Other Services and Charges 91,444 39,243 37,843 77,086 77,600 Total Expense 5,838,102 2,502,828 3,625,108 6,127,936 7,971,521 Appropriation/Allotment 4,797,707 3,141,433 2,241,432 5,382,865 6,882,865 USVIED Revenues 1,040,395 709,270 35,801 745,071 1,088,656 Total Projected (Actual) Revenues 5,838,102 3,850,702 2,277,233 6,127,936 7,971,521 Accounts VI Economic Development Authority General Fund Comparative Expenditure Analysis Financial Summary (FY 2018-FY 2020) U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget Economic Development Bank 6% Applications 7% Compliance 8% Enterprise Zone 5% Legal 6% Human Resources 3% Admin. & Finance 9% Executive Office 14% Board 2% Marketing 23% Incubator Program 3% EDM Cost 14% 2020 EDA Budgeted Expenses by Units 3.3 BUDGET SUMMARY  FY 2020 budgeted revenue is $7,971,521. o Internally generated revenue is $1,088,656. o Recommended appropriation is $6,882,865.  FY 2020 budgeted expenses total $7,971,521. Division / Department Personnel Costs Operating Expense Total FY 2020 Budget Economic Development Bank $ 370,827 $ 128,356 $ 499,183 EDC Applications Department $ 492,197 $ 42,873 $ 535,070 EDC Compliance Department $ 508,553 $ 108,580 $ 617,133 Enterprise Zone Commission $ 354,413 $ 57,250 $ 411,663 Legal Department $ 447,198 $ 16,050 $ 463,248 Human Resources $ 198,930 $ 38,792 $ 237,722 Administration & Finance $ 698,907 $ 23,025 $ 721,932 Executive Office $ 1,041,673 $ 36,425 $ 1,078,098 Board of Directors $ 89,168 $ 76,347 $ 165,515 Marketing Department $ 353,441 $ 1,482,872 $ 1,836,313 Incubator Program $ 169,494 $ 100,000 $ 269,494 EDM - Indirect Cost $ - $ 1,136,151 $ 1,136,151 TOTAL $ 4,724,801 $ 3,246,721 $ 7,971,521 U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget IV. SUPPLEMENTAL INFORMATION This section of the budget presents additional information to assist management, the public, and outside users in gaining a better understanding of the operations of the organization and to provide selected historical data for comparisons. The major components of this section consist of charts, tables, and graphs presenting: revenue, expense, and operating information. U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 3.3 PROFESSIONAL SERVICES BREAKDOWN IN DETAIL Professional Services FY 2018 Actual FY 2019 Projection FY 2020 Budget Audit Fee 44,100 46,305 48,620 Collection Services 52,431 150,000 52,000 Consulting 369,991 130,972 134,752 Information Technology Services 59,053 50,640 50,640 Legal Fees 137,589 120,000 105,000 Stenographer 27,433 20,000 35,000 Website Maintenance 24,210 36,000 23,988 Total Professional Services 714,807 553,917 450,000 Audit Fee, 48,620, 11% Collection Services, 52,000, 12% Consulting Fees, 134,752, 30% Information Technology Services, 50,640, 11% Legal Fees, 105,000, 23% Stenographer, 35,000, 8% Website Maintenance, 23,988, 5% Professional Services FY 2020 Budget Total: $450,000 U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 3.4 PERSONNEL SERVICE COST BREAKDOWN BY DEPARTMENT AND CLASSIFICATION Personnel cost is the single largest component of the Authority’s operating budget, representing approximately fifty-nine percent (59%) of the total operating expenses. Department Unclassified Positions (#) Unclassified ($) Classified Positions (#) Classified Positions ($) Total Positions (#) Total Salary Expense Admin. & Finance 1 120,000 8 367,429 9 487,429 Application 1 109,000 4 244,863 5 353,863 Board 1 64,739 0 - 1 64,739 Compliance 0 - 6 359,461 6 359,461 EZC 1 109,000 3 152,633 4 261,633 Executive 7 693,487 3 111,222 10 804,709 HR 1 80,784 1 67,722 2 148,506 Incubator 1 73,304 1 43,180 2 116,484 Legal 2 217,066 2 111,613 4 328,679 EDB 1 109,000 3 165,441 4 274,441 Marketing 1 175,393 3 80,878 4 256,271 Total 17 1,751,774 34 1,704,441 51 3,456,215 Administration & Finance 14% EDC Applications 11% Governing Board 2% EDC Compliance 11% Enterprise Zone Commission 8% Executive Officer 22% Human Resources 4% Incubator Program 3% Legal Department 10% Economic Development Bank 7% Marketing Department 8% Personnel Service Costs by Department (Percentage) U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget VEHICLE LISTING FOR USVIEDA Presently, the USVIEDA has nine (9) vehicles. All of which were purchased with USVIEDA funds. Year Make Model Assigned Use Fund Source Island 2018 Chevrolet Trax CFO (EDA12) USVIEDA Funds STT 2018 Chevrolet Equinox LT General Use (EDA4) USVIEDA Funds STT 2015 Chevrolet Colorado General Use (EDA14) USVIEDA Funds STT 2013 Chevrolet Traverse CEO (EDA1) USVIEDA Funds STT 2018 Chevrolet Trax General Use (EDA13) USVIEDA Funds STX 2018 Chevrolet Equinox LT General Use (EDA10) USVIEDA Funds STX 2016 Chevrolet Traverse ACEO (EDA2) USVIEDA Funds STX 2015 Chevrolet Colorado General Use (EDA11) USVIEDA Funds STX 2013 Dodge RAM Industrial Park (EDA 9) - STX REAL PROPERTY LEASED BY USVIEDA Lessor Address Sq. Ft. Annual Rent Lease Terms Use St. Thomas Properties Nisky Shopping Center Second Floor, Suite 620 St. Thomas 7,928 $206,000 5 years Office Space VI Economic Development Park Corp. 116 King Street Frederiksted, St. Croix 12,400 $49,465 Month to Month Office Space Crown Holdings 18B-2 Lindberg Bay St. Thomas 2,000 $17,661 Month to Month Storage Space U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget 104 050 060 003 035 040 030 020 002 070 000 110 GL Account # EDB Application Compliance EZC Legal HR Admin & Finance EXEC OFF Board Marketing EDM Incubator TOTAL 4 5 6 4 4 2 9 9 1 4 2 50 Personnel Services 60000 Salaries - Classified 165,441 244,863 359,461 152,633 111,613 67,722 367,429 111,222 - 80,878 - 43,180 1,704,441 60001 Salaries - Unclassified 109,000 109,000 109,000 217,066 80,784 120,000 693,487 64,739 175,393 73,304 1,751,774 Total Personnel Cost 274,441 353,863 359,461 261,633 328,679 148,506 487,429 804,709 64,739 256,271 - 116,484 3,456,215 Fringe Benefit Cost - 60005 FICA 17,015 21,940 22,287 16,221 20,378 9,207 30,221 49,892 4,014 15,889 - 7,222 214,285 60006 Medicare 3,979 5,131 5,212 3,794 4,766 2,153 7,068 11,668 938 3,716 - 1,689 50,114 60020 Insurance 28,151 50,051 51,502 28,151 43,844 12,413 89,140 61,100 6,206 34,335 - 21,922 426,814 60010 Retirement 47,240 61,213 70,091 44,615 49,531 26,650 85,050 114,304 13,271 43,230 - 22,177 577,372 Total Fringe Benefit Cost 96,385 138,334 149,092 92,780 118,519 50,424 211,478 236,964 24,429 97,170 - 53,010 1,268,586 Total Personnel Cost 370,827 492,197 508,553 354,413 447,198 198,930 698,907 1,041,673 89,168 353,441 - 169,494 4,724,801 64550 Office Supplies 500 500 500 3,000 250 500 500 855 500 600 27,500 2,500 37,705 - 15000 Capital Outlay - 55,000 55,000 Other Services & Charges 61000 Business Marketing 5,000 10,000 40,000 4,000 3,000 1,468,822 12,000 1,542,822 61020 Auto Expense 18,000 18,000 61050 Bank Service Charges 300 7,000 7,300 65020 Board Attendence Fee 10,800 10,800 - Employee Bonus/Incentive Program 75,000 75,000 68510 Business Relations 3,000 3,000 61080 Catering - 600 17,500 14,900 7,000 40,000 61110 Contributions / Donation 8,000 8,000 64735 Courier Service 9,840 9,840 61130 Custodial Services 4,000 4,000 68820 Drinking Water 1,800 1,800 61180 Dues & Subscriptions 796 13,123 1,250 1,000 10,500 1,042 1,225 2,370 1,295 500 2,000 35,101 61200 Employee Relations 250 250 350 500 250 26,000 400 400 1,000 150 35,525 65,075 62700 Garbage Disposal 900 900 63020 Insurance - 62,800 62,800 61120 Labor 50,000 600 3,000 53,600 64545 Meeting Space Rental 1,600 - 5,000 6,600 64530 Miscellaneous - 5,000 - - 5,000 64600 Parking 50 50 50 500 650 64720 Postage & Delivery 600 100 80 150 200 200 250 3,000 8,000 500 13,080 64740 Printing & Publication 500 500 - 300 6,000 5,000 12,300 64800 Leadership and Prof. Development 4,000 3,000 5,000 8,000 3,000 5,000 5,000 10,000 30,000 - 54,000 127,000 65000 Professional Fees 90,000 10,000 8,500 15,000 - - 261,500 65,000 450,000 65070 Credit Reports 2,220 2,220 66020 Rent 273,126 273,126 66530 Repairs 75,000 75,000 66720 Software Agreement 11,300 12,000 3,252 26,552 68521 Travel 3,000 2,500 2,000 2,000 850 2,500 2,500 15,000 25,000 3,000 15,000 7,000 80,350 Unemployment 2,000 2,000 Total Other Services & Charges 127,056 41,673 107,730 53,750 14,800 37,792 21,675 30,770 71,347 1,481,772 927,051 96,500 3,011,916 68800 Utility Services Electricity 75,000 75,000 Water 1,600 1,600 Communication 800 700 350 500 1,000 500 850 4,800 4,500 500 50,000 1,000 65,500 Total Utility Services 800 700 350 500 1,000 500 850 4,800 4,500 500 126,600 1,000 142,100 Total FY 2020 Operating Budget 499,183 535,070 617,133 411,663 463,248 237,722 721,932 1,078,098 165,515 1,836,313 1,136,151 269,494 7,971,521 U.S. Virgin Islands Economic Development Authority Fiscal Year 2020 Budget by Department U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget APPROPRIATION AND ALLOTMENT COMPARISON $5,482,865 $5,882,865 $6,882,865 $4,797,507 88% $5,382,865 92% FY 2018 Actual FY 2019 Projection FY 2020 Budget Appropriation and Allotment Comparisons FY 2018 Actual, FY 2019 Projection, and FY 2020 Budget Appropriation Allotment U.S. Virgin Islands Economic Development Authority – Fiscal Year 2020 Operating Budget GLOSSARY OF SELECTED TERMS Budget: An estimate of income and expenditure in the planning, monitoring, and evaluation of financial activities. Capital Outlay: Expenditures made for the acquisition of assets that exceed $500 in cost and has a service life of more than a year. Direct Cost: A cost that can be identified or traced with relative ease and a high degree of accuracy to a particular Unit. Fringe Benefits: The various types of non-wage compensations such as retirement contributions, F.I.C.A., health insurance, and uniform allowance provided to employees. Insurance: Cost to cover the risk of a contingency or uncertain loss and include personal injury, directors’ and officers’ liability and auto. Indirect Costs: A cost incurred in common with other Units that cannot be traced to any one particular Unit. Key Performance Indicator (KPI): A quantitative or qualitative factor that measures program results against planned outcomes. Personnel Service: The gross salary amounts paid to full-time, part-time, and temporary employees. Professional Development: Employer sponsored training to improve or enhance employees’ job- related skills. Costs include airfare, hotel accommodation, and registration fees. Rent: Compensation paid for the use of office or storage space. Repairs and Maintenance: Costs incurred to maintain or upkeep buildings and equipment in good working conditions. Office Supplies: All materials required by employees to perform their daily tasks. Examples include pens, paper, and other stationery items. Travel: Costs of airfare, ferry service, per diem, ground transportation, and hotel accommodations for employee travel between islands. Utilities: This expense includes electricity, water, telephone, cell phones, and internet service costs.