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IG Finds Money Problems in Taxi Commission


Sept. 6, 2005 — Lack of adequate staffing and regulatory policies has resulted in several failures for the Taxi Commission — including thirteen missing medallions and the misuse of commission funds designated for purposes under the Department of Licensing and Consumer Affairs.
According to the results of an audit released Tuesday by the Inspector General's office for the years 2000 and 2001, the Taxi Commission also has not been following procedures set up by law for inspection of taxis, as well as the collection of revenues through fees received for those inspections.
Failure to maintain accurate records relating to such issues has further impaired the commission, resulting in discrepancies between its records and the report put together by the I.G. For example, while commission officials claimed that taxi operators are issued license plates with the same number as their medallions, the audit report said this procedure has not been implemented. Instead, files were found with missing and outdated information relating to both medallions and license plates issued by the commission.
As the commission did not undertake efforts to "safeguard" its medallion and license plate inventories, auditors were also not able to match their count of unused medallions with that of the commission's. Instead, based on a physical count done by the I.G.'s office, twelve medallions on St. Thomas and one medallion on St. Croix have been identified as missing. However, discrepancies in the commission's medallion inventories seem to have auditors puzzled — while the medallions are not accounted for in records from 2001, they are listed in records for 2002.
"Considering the fact that taxi medallions are valuable assets that sell for in excess of $25,000 and are used as collateral by the various lending institutions, every effort should be made to locate the thirteen missing medallions," the audit report said.
The report also said DLCA Commissioner Andrew Rutnik has informed the I.G. of steps being taken to improve the situation. In addition to conducting a physical inventory of medallions, the DLCA has informed the various lending institutions about those that are missing. Furthermore, Rutnik said summer students were hired to update medallion and licensing registries, with data being stored in an electronic database instead of on paper. Finally, medallions and unused license plates are now being kept in a locked safe — instead of being kept in a box in a corner of the DLCA's offices as the report first indicated.
Auditors also encountered problems when inspecting money withdrawn from the Taxicab Fund — revenues generated from services the commission provides for the taxicab industry. While the V.I. Code stipulates money in this fund be used strictly for taxicab purposes, auditors found funds being used to pay for DLCA expenditures. This includes:
— $25,000 for expenditures relating to the use of cellular phones by DLCA employees;
— $18,081 to defray electricity and telephone costs incurred by the entire Licensing department; and
— $6,901 for repairs on a commission vehicle that was involved in a collision on St. Croix. In this instance, the driver of the vehicle was a commission employee who was not on commission business when operating the vehicle. Although he accepted full responsibility for the cost of repairing the vehicle, the report said there is evidence to indicate the commission charged the Taxicab Fund for repairs. Rutnik stated that the $6,901 may be uncollectible because the individual is serving time in prison for an embezzlement conviction.
Rutnik also said a system has been developed to properly ensure funds expended from the Taxicab Fund be properly allocated when used for DLCA purposes.
The commission's duty to provide biannual inspections on vehicles for taxicab operators is also not being fulfilled—resulting in a $30,000 annual loss in revenue. The report states that while taxicab operators are opposed to two inspections per year, records show that fees "are not even being collected for one inspection."
According to Rutnik, the $15 inspection fee has been a point of contention for taxi drivers ever since its establishment in 1988. According to drivers interviewed for the report, the cost incurred in preparing vehicles for inspection is exorbitant, and to incur such expenses twice per year does not "justify" the $15 fee. In addition, the law does not specify a certain amount of time must pass between inspections, so drivers may prepare their vehicle for inspection and have two inspections within a short amount of each other so that the vehicle is still in passing condition.
While Rutnik told auditors that he has devised a compromise to remedy the situation, attempts to meet with the various taxi associations to present his proposal have been futile. Instead, Rutnik said that biannual inspections will be completed for 2006.

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