A Report on the
STATE OF THE ISLANDS

Chapter 5: VIRGIN ISLANDS

5.1 The United States Virgin Islands

The USVI is a United States territory with a locally-elected government. Residents born in the USVI are citizens of the United States and they elect a Governor, unicameral (15-member) Legislature, and Delegate to Congress. The USVI is an organized territory because Federal legislation - an organic act - has established the institutions of local government. It is an unincorporated territory because not all the provisions of the U.S. Constitution apply to the USVI. The territorial court system has jurisdiction for all local legal issues.

The USVI is located in the eastern Caribbean Sea, approximately 1,000 miles southeast of Miami and 45 miles east of Puerto Rico. The USVI is comprised of three main islands, St Croix, St. John, and St. Thomas, and many small cays and out islands. The capital, Charlotte Amalie, is located on St. Thomas. The estimated 1995 population of about 100,00 is based on preliminary data and subject to revision.

5.2 Political Developments and Federal Relations

On January 2, 1995, the Honorable Roy Schneider was inaugurated as Governor of the USVI, while his running mate, Kenneth Mapp, became Lt. Governor. They campaigned as independents and were elected to their four-year terms in a special November 22, 1994 runoff election, defeating the Democratic Party candidates, then incumbent Lt. Gov. Derek M. Hodge, and Alfred O. Heath.

In the same runoff election, Victor O. Frazer, who also campaigned as an independent, defeated Democratic Party candidate Eileen Peterson, a former territorial judge, for the position of USVI Delegate to Congress. Frazer, serving a two-year term, is an independent in the House of Representatives.

The runoff contests were required because none of the candidates for these major offices had received the necessary majority of votes during the November 8 general election. In that vote, however, a majority of St. Croix voters approved casino gambling in a poll. That initiative was the basis of legislation that successfully legalized casinos on St. Croix early in 1995.

A major issue in USVI-federal relations is the disposition of Water Island, a federally owned property off the south shore of St. Thomas. The 500-acre island is the fourth largest in the USVI. The December, 1992 expiration of a 40-year lease of the island has focused the Federal Government's efforts to dispose of the property. Congressionally mandated surveys have either been completed or are underway. Decisions regarding final disposition are pending, awaiting the outcome of litigation between the master leaseholder and the DOI.

Political status is not a current issue in the USVI, though it was the subject of a vote two year ago. On October 11, 1993, a referendum was held to determine the islands' future political status. Of the 39,046 eligible voters, 10,732, or 27.5 percent of the electorate, voted. The options were statehood, incorporated territory, free association, independence, commonwealth, compact of federal relations, and status quo. The results were to form a basis for status discussions with the Federal Government. Of those who voted, 8,629 (80.4 percent) voted for Continued or Enhanced Territorial Status with the United States; 1,421 (13.2 percent) selected Complete Integration with the United States; while 525 (4.9 percent) chose "Removal of United States Sovereignty." Because a 50 percent plus one majority is required for a binding vote, the referendum left the status issue undecided.

5.3 Current Economic Conditions

General Labor Market Trends

Following record performance in FY 1993, the labor market slowed dramatically during FY 1995, with recovery still elusive through FY 1995. Employment in 1995, at 45,710, remained more than 4 percent lower than the preceding year. Due to unprecedented construction activity and record tourism levels, 4,200 jobs were added to the U.S.V.I. economy during FY 1993, the biggest annual increase in modern territory history. As construction subsided and tourism (particularly on St. Croix) slowed, civilian employment dropped over 6 percent during FY 1994. FY 1995 labor market conditions cooled further during the last month of the fiscal year when Hurricane Marilyn hit the territory, creating considerable job dislocation. Territory unemployment increased from a low of 3.5 percent in FY 1993 to 5.7 percent in FY 1995, the territory's highest rate of unemployment since 1985.

Tourism

U.S.V.I. cruise passengers arrivals totaled 1,203,000, down 3.0 percent in FY 1995 largely due to a 10 percent over- the-year drop in the last quarter of the fiscal year. The year's total was about 90,000 passengers fewer than the record level achieved in FY 1992.

Air visitors also declined during the fiscal year, dropping 4.4 percent to 653,300. The drop followed a 4.1 percent decline in FY 1994. Arrivals fared worst in the fourth quarter, dropping 17 percent versus the same period one year prior. Due to longer hotel stays and a greater propensity of air visitors staying in hotels, room nights occupied increased slightly in FY 1995 despite the air visitor decline. Room nights occupied, at 1,125,000, increased one-half of a percent in 1995.

Largely due to the impacts of Hurricane Marilyn, total visitor expenditure dropped nearly 11 percent falling from $920 million in FY 1994 to $821 million in FY 1995!

Manufacturing

Employment in manufacturing fell 8.6 percent during FY 1995 after averaging more than 2,900 during FY 1994, the best year for manufacturing employment since 1981. The drop in industry employment was due primarily to the loss of 390 jobs associated with the VIALCO alumina processing plant. The company has put the facility on "stand-by" status and phased out 390 of 450 plant jobs by March of 1995.

Construction

Hurricane Hugo, the Hess "cat-cracker," a major government capital improvement program and several other large private developments all spurred booming V.I. construction growth in recent years. Industry employment grew rapidly at an annual average rate of nearly 20 percent from FY 1989 to 1993. During FY 1993, employment reached an all-time high, averaging about 5,900 workers or more than 11 percent of territory jobs. Subsequently, the industry cooled considerably following the completion of the cat-cracker in September of 1993. Construction jobs averaged just 2,420 during FY 1994 before dropping further to 1,640 in FY 1995. The industry lost more than 4,300 jobs since construction activity peaked in FY 1993. Construction is expected to rebound strongly during FY 1996 due to the massive re-construction effort necessitated by Hurricane Marilyn.

5.4 Government Administration

Despite recent employment declines, the government remains the largest single source of U.S.V.I. jobs. Federal and local government accounted for 12,730 jobs or about 28 percent of all territorial civilian employment in FY 1995. Government employment dropped 1.9 percent during FY 1995.

The majority of local government is supported by revenues collected from its General Fund. Reflecting the sluggish economy, General Fund taxes and revenues fell nearly 3.2 percent in FY 1995 to $332 million. Individual income taxes collected in FY 1995 were $177.0 million compared to $191.8 million in FY 1994. Business gross receipt taxes collected decreased 3.1 percent from $79.2 million in FY 1994 to $76.7 million in FY 1995. Corporate income taxes, however, increased 10 percent from $31.5 million in FY 1994 to $34.6 million in FY 1995.

Federal expenditures, in addition to directly supporting federal activity in the territory, are also an important source of support for local government as well as territorial business and individuals. Direct federal expenditures in the territory totaled $386 million in FY 1994, an increase of 1.6 percent versus FY 1993. Nearly half (49 percent) of these expenditure came in the form of grants to local U.S.V.I. government entities. Federal grant funding increased 5.1 percent, from $97.2 million in FY 1994 to $102.2 million in FY 1995.

5.5 Infrastructure

Water System

Because of low annual rainfall, water conservation is of critical concern and requires constant attention. Water is obtained by three systems: catchments with cisterns, saltwater conversion, and wells. The WAPA is responsible for the desalinization plants and distribution system. Production costs for saltwater conversion are significant, consequently system integrity and the efficiency of the meter operations are of paramount importance.

Water distribution rehabilitation and replacement projects are in progress as part of a $20 million water program on St. Thomas and St. Croix. The DOI has contributed $8.7 million in capital improvement grants since 1987 for water distribution improvements.

Saint Thomas

A significant portion of the population rely on roof catchments and water cisterns for potable water. When rainfall is scant or cistern capacity is small, trucks obtain water from the WAPA or wells and haul it to the desired location. The demand on the WAPA distribution system ranged between 3.0 to 3.5 MGD and supplies the town of Charlotte Amalie and the east end of the island. Expansion of the water production facilities was completed on St. Thomas during 1992 with the addition of 1.4 MGD to the system.

Desalinization produces 4.45 MGD using sea water and waste heat from the electric power plant for the conversion. The distribution system consists of 3,400 metered connections on fifty (50) miles of water mains. The lines have seven (7) booster pump stations and approximate storage capacity of 50 MG. Funding has been provided for plant expansion through the issuance of water bonds.

The old saltwater flushing system used by the town of Charlotte Amalie has seriously deteriorated. This has resulted in electrolysis along the potable water lines, causing disintegration of the pipes. According to the recent "Water Loss Reduction Program Study " the 65 percent system loss in 1988 has been reduced to about 45 percent with system leakage identified as being accountable for 90 percent of actual loss. Due to the corrosive nature of the soils on St. Thomas, all piping systems are being replaced with Poly Vinyl Chloride (PVC) material.

Saint John

A desalination plant completed in 1990 provides 155,000 GPD and eliminates the past practice of barging half of St. John's water supply from St. Thomas. An elevated storage reservoir with an attendant pump station complement this new facility by providing increased service potential. Water service has been provided to the residents of Coral Bay. Storage capacity has been doubled in 1995 from 0.6 to 1.2 million gallons.

Saint Croix

Groundwater and desalinization are the main potable water sources on St. Croix. The daily water demand is approximately 3.2 MGD. The production is 4.2 MGD with about .5 MGD coming from groundwater (when all well fields are activated).

The distribution system has 140 miles of mains, 6 primary booster pump stations, and 23 million gallons of storage capacity.

Waste Water System

All three islands have waste water treatment plants (WWTPs) and sewage collection systems. The extent of the systems vary by island. Many private residences and hotels have their own disposal systems which are not connected to the public system. The former use individual septic systems, while the latter use small private treatment plants. All of the WWTPs discharge effluent to either an inland stream or the ocean. The towns of Charlotte Amalie on St. Thomas and Christiansted on St. Croix use saltwater sewage flushing systems as a potable water conservation measure. The Department of Public Works (DPW) is responsible for operations and maintenance of the public sewer systems on all three islands.

The GVI entered into an Amended Consent Decree with the U.S. EPA on January 19, 1996. New treatment plant construction scheduled and existing treatment plant operational improvement schedules for compliance are included. Failure to meet these dates or interim effluent discharge limits and mass loading limits will result in stipulated penalties and sewer connection bans, respectively.

St. Thomas

Most of the private residences on St. Thomas rely on individual septic systems. There are 8 sewage treatment facilities on St. Thomas, 7 secondary plants, and an anaerobic pond at the airport. The plants do not always attain secondary treatment discharge requirements. The Nadir plant is also treating effluent from the Bovoni plant.

The U.S. EPA awarded a grant for the construction of a regional Waste Water Treatment Plant (WWTP) at the solid waste landfill site which is located on the eastern end of the island. When built, it will initially eliminate five existing plants, and later, the plant at Vessup Bay.

The Mangrove Lagoon Regional Waste Treatment Plant design contract was executed on April 2, 1996. This new secondary treatment facility will serve the Donoe, Old Tutu, Nadir and Bovoni housing areas. Five existing package plants, which do not meet effluent limits, will be replaced and effluent will be discharged through ocean outfall. The Vessup Bay area package plant although out of the study area is proposed to be connected to this facility later. A compliance schedule for this project is included in the Decree. An EPA Construction grant in the amount of $10 million is awarded for this project. An additional $15 million is needed.

The aerated waste water lagoon located at the Cyril E. King Airport serves the town of Charlotte Amalie and surrounding areas. The facility meets effluent limits as proposed in the Section 391 (h) waiver approved by EPA in 1988 (the modified permit has not been issued by EPA yet). However, Marilyn damaged the aeration system which is in the process of being repaired. Aeration system upgrades will be included to address odor problems resulting from long sewer detention times and low oxygen levels.

The Decree includes interim effluent limits for the existing facility and a conditional requirement to construct a secondary treatment plant if the waiver is not approved. The V.I. Port Authority (VIPA) has notified the Department of Public Works (DPW) that the Airport Master Plan calls for the lagoon to be relocated per Federal Aviation Administration (FAA) requirements. A site for the new facility at Red Point Peninsular, south of the airport, is proposed. However, funding for the estimated cost of $22 million needs to be identified.

On the west end of the island, one secondary treatment package plant serves the Bordeaux housing area. On the north end of the island, one secondary treatment package plant serves the Brassview housing area. Properties not served by the public sewer system use on site disposal systems or privately owned and operated treatment facilities

Sewer line replacement for the island of St. Thomas is estimated at $20 million, including preparatory cleaning and inspection. Emergency generators are currently being installed in housings constructed at each of the sewage lift stations.

St. John

The Cruz Bay Waste Treatment Plant serves Cruz Bay and surrounding areas. This secondary treatment facility is overloaded, does not meet interim effluent limits, and discharges into the salt pond. A new secondary treatment plant will replace this facility and discharge effluent through an ocean outfall. The ocean outfall was constructed in 1995. A contractor for construction of the treatment plant was recommended to EPA on March 23, 1996. The bid exceeds the available funds by $750,000. These funds need to be identified. A TPDES permit application will be submitted by April 30, 1996.

Sewer lines have been constructed in Estate Contant, Pine Peace and Power Boyd's Plantation in 1995. Emergency generators are currently being installed in housing constructed at each of the sewage lift stations.

St. Croix

The island of St. Croix is served by one primary waste water treatment facility. This plant primarily serves the communities of Christiansted and Frederiksted. The treatment plant has an 8,000 foot ocean outfall.

The sewage collection system consists of 87 miles of gravity and force mains with 3 major sewage lift stations and 12 feeder pump stations. The majority of the system is concrete which is subject to deterioration from hydrogen sulfide gas, which produces sulfuric acid. Because of the long detention time for flows arriving at the WWTP, hydrogen sulfide is sometimes generated from the aged condition of the sewage. This condition has deteriorated the sewer mains to the point of repeated collapse and failure, which frequently requires raw sewage bypass during repairs to mitigate public health hazards and protect the environment.

Sewer line rehabilitation and replacement estimated cost is $30 million, including preparatory cleaning and inspection.

Solid Waste Disposal

The solid waste operations - collection and disposal - on all three islands are under the direction of the Department of Public Works. Additionally, litter enforcement and training are provided by DPW. Solid waste collection is a combination of curbside collection and roadside garbage bins. Improvements to the collection system include construction of convenience centers which will include redemption centers.

Solid waste collected is disposed of via landfill. Land limitations may adversely affect this method of disposal. Presently, planning studies and cost analyses are being performed to establish the most efficient collection and disposal systems and their associated costs. The establishment of tipping fees will be recommended with proposed rate structures.

The landfill on St. John is closed and a transfer station, which is used to transfer solid waste to St. Thomas, has been in operation for over two (2) years. Bulk waste and junked vehicles are removed regularly by barge. A final closure plan has been submitted to the Department of Planning and Natural Resources and EPA for approval.

Recycling programs have been established through redemption centers funded through the Anti-litter and Beautification Commission fund. DPW has recently recommended a program entitled "Management Plans for Scrap Metal (junk vehicles) and used oil. Also, compacting facilities were also proposed, but funding could not be identified. Diverting components of the waste stream that make up significant percentages will maximize the remaining useful life of the landfills and reduce the financial burden for collection and transportation.

Training and public education, which includes conferences, seminars, courses, public campaigns and educational curriculum, are among the solid waste services provided by the DPW.

Power Generation and Distribution

The System

The WAPA serves approximately 47,000 electricity customers on the island of St. Thomas, St. John, Water Island, Hassel Island, and the Island of St. Croix. Major generating facilities are located on St. Thomas and St. Croix, while a standby facility is located on the Island of St. John. Transmission and distribution of power is typically 13,800 volts, 3 phase, 60 Hertz throughout the islands. Billing, collecting and providing customer service are the additional functions carried out by the WAPA organization. WAPA has been commended by the Operations Maintenance and Improvement Program (OMIP) program for its strong management and dedication of its personnel.

St. Thomas

The Krum Bay generating plant has a combination of 4 combustion gas turbines and 2 conventional steam turbine-generators. Total output is approximately 450 million kilowatt-hours (MKWH) annually with a total of 123 million watts (MW) of installed capacity. The demand for power is increasing steadily. Preparations are presently underway for the installation of a new 36 MW unit in an attempt to keep up with the demand.

Power distribution is by a combination of overhead and underground high-voltage feeders. Typically these operate at 13,800 volts; however, a 34,500 volt feeder is in service to a major substation overlooking the harbor area. Sub-feeders extend to major load centers on the east end of the island and also to a cable termination structure which feeds St. John Island via a submarine cable. Construction is almost completed on a thirty-four (34) KV substation on the east end of St. Thomas.

St. John

St. John has a demand of approximately 7 MW and is served by 2 submarine cables, each rated at 18 MW. A standby diesel-electric generator, rated 2.5 MW, is maintained for use in emergency situations. Management, generation, maintenance, and distribution functions are handled by the St. Thomas staff.

Plans have been completed and funding has been requested for the installation of a 34 KV to 15 KV substation on St. John which will allow operation of the cable at 34 KV.

St. Croix

Power production at the Richmond Plant consists of 2 steam turbine generators and 4 combustion turbine-generators. In total, these have the capacity to generate 115 MW.

Seaports

The Virgin Islands Port Authority (VIPA), a semi-autonomous governmental agency, owns, operates and maintains 6 seaports and 2 airports in the territory.