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PSC Irked by Innovative Bid to Renew Tax Breaks

July 27, 2004 – The Public Services Commission voted on Tuesday to inform the Economic Development Commission that the PSC granted Innovative Telephone rate increases based on the anticipated expiration of its EDC tax benefits last year. In a long and frequently heated meeting, PSC members also said they are incensed at the treatment they have received at the hands of the phone company.
Five months after its certificate as an Economic Development Commission beneficiary expired last September, Innovative Telephone applied for a renewal of its tax benefits, despite having told the Public Services Commission last year that it would not do so.
The PSC granted Innovative rate increases last August based on the fact that the benefits were about to expire and the company's assurances that it would not seek to have them extended. (See "Phone Company Seeking Renewal of Tax Breaks".)
Adding to the controversy, Innovative Telephone's president, David Sharp, failed to appear as expected at Tuesday's PSC meeting to explain his company's actions. It was not the first time Sharp had failed to show up.
Keithley Joseph, PSC executive director, said he had written Sharp repeatedly requesting information on its application for renewal of EDC benefits but received no response. When Sharp failed to appear at Tuesday's meeting, tempers flared.
Valencio Jackson, PSC chair, said, "If Sharp doesn't show, he won't be invited next time. It's a privilege to be here."
Jackson addressed his remarks to Julio Brady, an Innovative attorney who was present to represent the phone company. "I don't mean to beat you up," Jackson said, "but we need Sharp."
Commission member Alric Simmonds, who also is the governor's deputy chief of staff, was livid. "Any time Innovative asked for a tariff adjustment, they would come before this body," he said. "They appeared before the EDC. Does that mean the PSC is being ignored?"
Commission member Verne David said: "I've written to Sharp directly, and he didn't answer. That's why I want him here in front of me."
Simmonds said: "They consistently ignore this body. Anywhere else this occurred, that company would have been sanctioned heavily."
Jackson said: "We got our information from the media. We weren't informed personally. If I were in the street, I would say how I really feel. Sharp must be here at the next meeting — media, take note." He told Brady to carry the message back to Innovative officials.
Attorney Maria Tankenson Hodge said that based on Innovative's benefits expiring last September, the company would owe $7 million in taxes by now. She asked Brady if Innovative had paid the government; Brady said he didn't know.
David said someone from the telephone company conversant with the situation should be present to address such issues. "Somebody isn't doing their work," he said. "It shows no respect."
"Meeting after meeting, you come," he said to Brady. "You're wasting my time, and I want you to take my message back to Sharp."
Brady said: "I'm sorry you don't think I'm competent to represent Innovative. I can't answer these questions. I'm not part of that docket. I can't anticipate what will be asked" [at PSC meetings]. If you feel you don't have the information, someone else needs to be here. It's critical; it's highly important," he said.
Commission member Desmond Maynard asked, "Suppose one wants to ask whether Innovative is paying taxes?" Brady replied that he couldn't "make up answers."
"Nothing galls me more than the insults we get from Innovative," Maynard continued. "If they wanted a rate increase, they would be here front and center."
Brady explained again that he had not been a part of the rate-increase petition process. "It is my assigned duty to be here," he said, to which David replied: "I have great confidence in your ability. I think you know that."
Jackson said he did receive a letter from Sharp, but it didn't address the matter at hand. "It was about the Technical Operations Center," he said. The center had been on Tuesday's docket; however, since Police Commissioner Elton Lewis had to be at the Senate on Tuesday, Jackson said, discussion of the matter was deferred to a later date.
Just about the time tempers abated a bit, copies of an advertisement which appeared in the July 21 V.I. Daily News were distributed. The ad reads in part: "Innovative Telephone, a participant in the Economic Development Program of the Virgin Islands, has a procurement program …" The ad then lists the types of goods and services it "regularly purchases."
Simmonds said Sen. Adlah "Foncie" Donastorg read the ad text at last Thursdays's Senate Finance Committee hearing. "I at first thought it was about telephone lines, but later Donastorg produced a copy of the ad," Simmonds said. "I'm totally floored."
The commission and Brady tossed out ideas about the significance of the ad. "It doesn't say beneficiary; it says participant," Jackson said. "It very well may be they're receiving benefits. I don't know the answer, but I will get one. If they are a participant, we will have to change their rates."
He asked Brady, "Am I right?" Brady replied, "I don't know if they are a participant or not."
Jackson said, "If we don't have an answer, I suggest we get the facts no later than next week."
"An order was issued, and they need to comply," Simmonds said.
David agreed. "It's time to enforce compliance [with] our order," he said. "We want their benefits to be put on hold. The EDC should take no further action until Innovative complies with our order."
Joseph asked hearing examiner Boyd L. Sprehn if the EDC is obligated to give the PSC information. "The PSC cannot order," Sprehn said. "It can request."
The board voted to have Jackson write the EDC informing it of Innovative's obligations under its rate agreement and attaching a copy of the agreement to the letter. The letter is to inform the EDC that Innovative must appear before the PSC before the commission can grant the company new benefits.
The board was scheduled to hear Water and Power Authority matters later in the day.
All seven voting commission members – Jerris Browne, Yvette Canegata-Jones, David, Jackson, Maynard, Simmonds and Alecia Wells – attended the meeting.

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