Gov. John deJongh Jr. asserted any holdup on dredging East Gregerie Channel puts more than a dozen cruise ship calls and millions of dollars in revenue at risk, in a statement in advance of a special legislative session he called for Wednesday for the Coastal Zone Management permit.
DeJongh cited a V.I. Bureau of Economic Research analysis conducted over the last few days at his request, saying the loss of 13 ships could represent a direct loss of nearly $10 million to the economy. The analysis found a loss of 13 ships would represent more than "38,298 cruise passengers and 14,654 crew, amounts to $9,751,045 using the visitor exit study average of $224 per cruise passenger and $80 per crew member expenditures as estimated for the St. Thomas /St. John district,” deJongh said in his statement.
According to BER, that amounts to more than $18 million in potential economic impact, due to the multiplier effect of that cash being spent in the community again and again, as those who sold to tourists then spend their earnings in stores and so forth.
DeJongh recently called the special session to approve a Coastal Zone Management permit for dredging for cruise ships and for bond funding of V.I. Port Authority projects. Senate President Shaun-Michael Malone requested the governor withdraw the request because the same legislation would be on the agenda at a session a few days later on July 28. (See Related Links below)
In a statement at the time, deJongh said he called the session at the request of VIPA Chairman Robert O’Connor Jr. The CZM permit was on the agenda for session scheduled July 21, but that session was canceled on July 18.
The permit in question would allow VIPA to dredge the East Gregerie Channel in Crown Bay and a section of the area along the northern portion of the pier at the Austin "Babe" Monsanto Marine Terminal. Cruise lines asked for the dredging, V.I. Port Authority Director Carlton "Ital" Dowe told the Rules and Judiciary Committee, which recommended approval.
Dowe said VIPA submitted a joint CZM and Army Corps of Engineers permit application in April of 2013. They have received approval from the CZM commission and expect the rest of the permitting process to be completed before the end of summer. If that happens, dredging should begin in September and be completed in November, Dowe said.
DeJongh is also submitting a proposal to remove language from an existing act authorizing VIPA to issue bonds for work on Crown Bay, Gallows Bay and the Ann Abramson Pier. The language change would let VIPA refund the bonds without returning to the Legislature for approval. The current law that requires them to return for approval is "unlike what is required of other semi-autonomous agencies," according to Government House.
This is the second special session in as many weeks. DeJongh called a session for July 16 for legislation to make it possible for the government to borrow money to cover part of its current budget deficit and other purposes.
"We delayed the session scheduled for July 21, 2014, because our legal counsel’s office needed additional time to adequately prepare for the regular session after already being called into special session earlier this week by our governor on July 16," Malone said in a statement when deJongh called the session.
DeJongh emphasized the short timeframe for the work and the high cost of any delay.
“We must face the reality that we stand to lose more than $18 million in economic impact to our economy should the VIPA not be able to complete the project by the November deadline,” deJongh said. This has a direct impact on jobs that relate not only to when a cruise passenger or crew member spends, but also indirectly to the spending of that employee paid with those dollars which then circulates locally.”
"We cannot afford to wait," deJongh said. “If we don’t want them, another port will take them. An approval by the senators only allows to begin the process towards the November 2014 deadline, as a federal permit is still required and a contractor must be selected," deJongh said.
DeJongh also signed legislation approved at the July 16 session that changed a 270-day borrowing bill the Senate passed in June to partly fill this year’s budget deficit and help the territory’s hospitals, allowing the government to convert it to long-term debt.
In June, Government House sent down bonding legislation to address the government’s budget shortfall, to bolster the territory’s hospitals and to pay tens of millions of dollars in overdue utility bills for the hospitals and the Bureau of Corrections. During session June 19, the V.I. Legislature tabled deJongh’s long-term bond bill. Senators instead special ordered a bill onto the agenda "to reissue a working capital loan in the amount of $50 million prior to the end of (Fiscal Year) 2014."
It says the "notes must mature no later than 270 days after issuance," meaning the full loan must be repaid in less than one year.
That bill authorizes $12 million in new funding for the Gov. Juan F. Luis Hospital; $10.5 million to Schneider Regional Medical Center; and $12 million to pay the two hospitals’ and the Bureau of Corrections’ past-due utility bills. It also funds several small appropriations. It was approved on a floor vote without testimony or debate.
Finance Commissioner Angel Dawson testified to the Legislature July 16 that it would not fully fund this year’s budget shortfall, saying if nothing is done there will be a sharp shock later in the year when cash runs short. (See Related Links below)
Also Dawson said no bank will finance the loan. He presented a letter from FirstBank Senior Vice President Joseph Hosie rejecting the loan. Hosie said the bank’s concern was that “it changes the short term nature of the credit facility to meet occasional cash flow needs of the government to a loan to cover deficit financings with no clear understanding of a source of repayment."
The Legislature approved the amendment to the loan bill 14-0.
