DeJongh proposes $169M borrowing plan
Published: June 10, 2014
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ST. THOMAS - Gov. John deJongh Jr. unexpectedly sent a $169 million borrowing proposal to the V.I. Senate late Monday afternoon.
The proposal is a last-ditch effort to cover the $30 million V.I. government budget shortfall, as well as new spending for hospitals, landfills, capital projects and the V.I. Water and Power Authority.
"I am requesting authorization for the issuance of bonds, notes, and other evidences of indebtedness by the Virgin Islands Public Finance Authority," deJongh wrote in his letter Monday to the Senate.
The letter specifically was written to Senate President Shawn-Michael Malone, who could not be reached Monday evening for comment.
"The need and request for this borrowing comes after a number of initiatives implemented by the Administration to conserve our limited cash resources and further reduce our costs have been effectuated," deJongh wrote.
The initiatives included, he said, the release of cover-over receipts, implementing pro-rated four percent across-the-board reductions in allotments to executive branch departments and agencies, and the continuation of a limited hiring freeze.
In his January State of the Territory address deJongh said that the islands were on "the cusp of our long-sought economic revival."
"We have not yet achieved balance in what we spend and what we take in. And, just as we must all do at home, we can only spend the money we have - our credit card is maxed out," he said in the address.
On Monday, it was a different story, as the governor is trying to balance a budget that, under the V.I. Code, was due to the Senate on May 30.
Most recently, deJongh said in a letter to the Senate that he expected to submit a balanced budget by June 16.
The new legislation proposes a few fixes to the currently distressed budget:
The legislation would authorize borrowing $30 million for working capital for the General Fund to make up for the current $30 million shortfall.
An additional $30 million would go to Juan Luis Hospital and Medical Center and Schneider Regional Medical Center. Another $11.5 million would go toward the payment of outstanding electric and water payments due to WAPA, including $10 million owed by the hospitals. The same money would cover the V.I. Bureau of Corrections' outstanding bills to WAPA of $1.5 million.
The legislation would authorize capital projects funding of $4.09 million. More than $905,000 would go toward the completion of the White Lady White Bay Road project on St. Croix, the Smith Bay Cemetery project, and Hurricane Earl debris removal. Public Works Commissioner Darryl Smalls could not be reached Monday evening to comment on the details of each of the projects.
Approximately $1.19 million would go toward the completion of the Ivanna Eudora Kean School Track, which has been under construction for about seven years and thus far has cost about $4.5 million, according to Finance Commissioner Angel Dawson.
Another $2 million would go toward the relocation of the fire station at Fort Christian.
The financing authorized in this measure will provide $23.84 million for costs projected for the closures of V.I. Waste Management landfills planned for fiscal years 2014 and 2015.
The authority executed consent decrees with the U.S. Environmental Protection Agency requiring the eventual closure of the landfills located at Estate Anguilla on St. Croix and Estate Bovoni on St. Thomas.
These projects have an estimated total cost of $67 million, deJongh said.
The legislation also would provide $30 million in funding to the Melvin Evans Highway Project from West Airport Road to Hannah's Rest on St. Croix. The highway has not been improved since its opening in 1980, deJongh said.
The legislation also would also provide $40 million for the Veterans Drive Project, which is expected to entail expanding out Veterans Drive from the Long Bay Road and Lover's Lane intersection to Vendors Plaza on St. Thomas. The project is part of a larger effort to improve the island's waterfront.
"The GARVEE Bonds would be repaid utilizing approximately 50 percent of the anticipated annual federal highway revenues and will not impact the General Fund," deJongh wrote to the Senate.
Both projects are ready to proceed upon receipt of the funding necessary to move forward, according to deJongh.
In deJongh's letter, he also mentioned - without noting the price tags - the need for funding for both Paul E. Joseph Stadium Project, and projects funded by the Community Facilities Trust account.
The St. Croix stadium, which Dawson estimated is going to cost about $17.5 million, initially was to be funded by the CFT account.
"This legislation would allow the funding to come from the Gross Receipts Tax revenue or the Matching Fund," Dawson said.
The Matching Fund is from the rum cover-over revenue, Dawson said.
As for the projects funded by the CFT account, Dawson said that the governor was merely reminding the Senate of an already existing bill addressing numerous projects.
Bill 30-0338, sponsored by Malone, details how the Senate might want to divvy up the current $5.2 million balance in the CFT account.
Included suggested investments are a radio tower site enhancement project, a police surveillance camera project, a road paving project, a cemetery clean-up and several others.
- Contact Jenny Kane at 714-9102 or email email@example.com.