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SENATOR: PHONE HIKES MAY COST GOVERNMENT $700K

Aug. 25, 2003 – Everybody's phone bills are about to go up by more than 17 percent with the rate increases approved this month by the Public Services Commission for Innovative Telephone, but one customer is about to take the biggest hit, and it's one that can ill afford it, Sen. Adlah "Foncie" Donastorg said on Monday.
That customer, he said in a release, is the V.I. government.
"The Virgin Islands government could be paying $700,000 more for its phone service," Donastorg's release said. "Based on projections for Fiscal Year 2004, government agencies anticipated paying just over $4 million for phone service. Rate hikes estimated at 17 percent bring that figure up $700,000 to $4.7 million."
From his vantage point as chair of the Senate Finance Committee, which is winding up Fiscal Year 2004 budget hearings, Donastorg listed the requests that have been submitted by the various government departments, offices and other agencies for phone expenses in the coming fiscal year — expenses based on existing phone rates.
At the top of the list are the Education Department ($540,550), Health Department ($361,882), Police Department ($328,673), Finance Department ($279,500), Public Works Department ($261,555), Human Services Department ($237,420), Internal Revenue Bureau ($220,000) and the Office of the Governor ($203,000).
Those figures include long-distance service, which would not be affected by the Innovative increases, however. For a breakdown of the tariff increases Innovative requested and received, see "How much Innovative wants to hike phone rates".
The PSC could not have been unaware that "the government is in fiscal crisis" when it voted on Aug. 15 to approve the rate increases, Donastorg said, since its members "are almost all government employees with responsible positions."
The voting commission members are the chair, Valencio Jackson, the assistant Finance commissioner; Verne David, a business owner; Jerris Browne, a deputy Police commissioner; Desmond Maynard, an attorney in private practice; Alric Simmonds, the governor's deputy chief of staff; and Alecia Wells, an Education Department employee. There are also two non-voting members, Sens. Shawn-Michael Malone and Luther Renee.
Browne, Jackson, Simmonds and Wells — all government employees — were the members present and voting — all in favor of the phone rate. David was present at the Aug. 15 meeting but absent for the vote. According to a published account, he said afterward that he had gone to the restroom. Malone also was present. Maynard, along with Renee, was absent from the meeting.
"Innovative still runs things at the PSC," Donastorg charged, stating that the commission voted on Aug. 15 both to approve the increase and also to reject a petition to reconsider an earlier vote against reducing the phone company's allowable rate of return.
Donastorg said it might serve the public better if "the commission should be abolished and all utilities deregulated … At least this way the field would be open for competition."
The release stated that ICC pays its "shareholders" 6 percent of its gross earnings as advisory fees that are counted as a business expense before profits are calculated. "These so-called advisory fees are direct payments to its sole shareholder, Mr. Jeffrey Prosser, and this year totaled more than $3 million," the release said.
"According to a 1992 settlement agreement between the PSC and ICC, then Vitelco, the phone company cannot include the millions of dollars paid in advisory fees to Mr. Prosser as a legitimate expense without the approval of the PSC," the release continued.
However, Donastorg said, the PSC members have not enforced this. "They have the power and authority to lower our monthly utility bills, yet for some reason they are afraid to use it," he said.

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