March 23, 2004 – Gov. Charles W. Turnbull's request for the Senate to authorize the issuance of another $180 million in bonds mainly to cover the construction of waste treatment and education facilities received a lukewarm reception by the Legislature from the time it convened on Tuesday morning.
The idea of the government borrowing yet more millions of dollars on the bond market did not sit well with many of the lawmakers.
And as the deliberations dragged on toward midnight, there was discussion led by Sens. Louis Hill and Emmett Hansen II of having another legislative session to consider reprogramming existing bond proceeds for those purposes.
Meanwhile, around 11:30 p.m., the lawmakers approved a motion by Hill to refer a second bill submitted by Turnbull — of various amendments to the recently passed act creating the Waste Management Authority — to the Planning and Environmental Protection Committee, which Hill chairs. The motion passed 12-3, with Sens. Norman Jn Baptiste, Usie Richards and Celestino A. White Sr. casting the negative votes.
The senators also voted to send a third bill submitted by the governor — one not listed on the week's Legislative Calendar — to committee. The measure calls for the expulsion of students who bring weapons to school or are found to be in possession of such weapons on school grounds. Following debate over what constitutes a weapon, the lawmakers voted to send the governor's bill to the Education and Youth Committee.
From the start on Tuesday, the senators wanted to know why the administration would float another bond issue so soon after the $268 million issue of last December which covered parts of many of the same projects. (See "Successful bond issue brings infusion of funds".)
Officials said at the time that $141.5 million of those bond proceeds would go for capital projects, including $16.5 million for two new wastewater treatment plants, $15 million for school repairs and renovations and $5 million for emergency road repairs.
Turnbull called the Legislature into special session Tuesday to authorize up to $180 million in Internal Revenue Matching Funds revenue bonds, to be allocated as follows:
– $70 million to complete the financing of the estimated $52 million cost of the new treatment plants — one on St. Croix and one on St. Thomas — and for the repair, replacement and improvement of the territory's sewage collection system.
– $70 million to replace Addelita Cancryn Junior High School on St. Thomas and Central High School on St. Croix, and to construct a new high school on St. Thomas.
– $5 million for the Anguilla and Bovoni landfills.
– $10 million for road repairs and construction.
– $25 million for debt-service reserves.
Turnbull said two firms, VWNA Caribbean, a subsidiary of US Filter Operating Services Inc., and Veolia Water S.A. have been awarded contracts for the design, construction and operation of the wastewater treatment facilities. Most of the senators presented with thick binders containing the contracts complained that they had had little time to peruse the voluminous contents.
Kenneth Mapp, Public Finance Authority director of finance and administration, said the bond issue would be funded by additional rum tax revenues which "would not impact the government's revenue stream."
Mapp appeared along with Nathan Simmonds, director of the Office of Fiscal and Economic Recovery Implementation and head of the governor's financial team; Ira Mills, Office of Management and Budget director; Public Works Commissioner Wayne Callwood; Sonya Nelthropp, Public Works solid waste manager; Education Commissioner Noreen Michael; Keith Richards, Capital Projects director; Assistant Attorney General Michael B. Law; Lawrence C. Soule, Banc of America vice president; and Guy Morley, attorney with the law firm of Winston & Strawn.
Support only from Jones
All senators acknowledged the necessity of complying with the many consent decrees regarding the territory's dysfunctional sewage system, but almost all took issue with the idea of funding compliance projects with another bond issue. The territory is facing federal deadlines of Nov. 30, 2005, for completion of the new St. Croix treatment facility and Nov. 30, 2006 for completion of the St. Thomas one.
Senate President David Jones was alone in saying he would support the new bond issue. "The question is whether we are going to the well, and are we willing to take out the wallet to pay," he said. "These things are necessary; they are not a luxury."
His colleagues said they wanted answers to many more questions before making any decision.
Sen. Lorraine Berry objected to the Legislature being put in the position of having to make a hasty decision for something that has been in process since last year. She wanted to know why it had taken so long to submit the request to the Legislature. Simmonds' answer was that the negotiations were lengthy and complicated.
Berry questioned Mapp's statement that the bonds wouldn't take away from the government's revenue stream. She said that part of the rum tax goes into the General Fund, and "if it is used for bond repayment, where will the General Fund's share go?"
Hansen took umbrage at the whole bond issue idea. He questioned Soule, who had earlier said that the government, even with increasing revenues, remains "under financial stress."
"If we're still under that 'stress,' why would you float bonds that are revenue neutral, as Mapp has called them, rather than something revenue generating?" Hansen asked, calling the bond issue as proposed "unsound."
Later in the day, after determining that there is still money left from the December bond issue, Hansen said he would propose reprogramming the proceeds from those bonds. "They didn't consult us about the MOU [memorandum of understanding], and we are not bound by that," he said. "Nothing says we cannot reprogram the previous funding."
No comment on query about a new MOU
White tried to get Simmonds to acknowledge that the governor has submitted to David B. Cohen, deputy assistant secretary of the Interior Department in charge of the Office of Insular Affairs, a memorandum to supersede the 1999 MOU Turnbull and then Interior Secretary Bruce Babbitt signed. A November 2002 audit of the territory's compliance with the 1999 MOU gave the administration mixed reviews. (See "MOU compliance audit: successes, shortcomings".)
Saying that the governor had sent the Legislature a copy of the 1999 agreement as a courtesy, White asked, "Where is this one?"
Simmonds refused to say the governor had signed anything.
"We want to know what the governor wanted changed in the MOU," White said. "Maybe he wanted Addelita Cancryn changed back to Wayne Aspinall, the congressman it was named for before. We don't know what he said."
White and several other senators appeared surprised when administration officials said they had no drawings or plans to show them for the many proposed new projects. White asked Michael where the new schools are to be built. After a pause, she said the site plans aren't final. "No site has been situated but Bournefield, or an area near Muller school, or the Island Block location," she said.
Turning to Mapp and Keith Richards, White asked whether any of the capital projects have been started. Richards replied that they are in the design stage.
Hill questioned the wisdom of going "to the bond market too often, noting that "We just went last year." Mapp said what is now proposed is a different type of bond.
Sen. Ronald Russell agreed with Hansen, saying: "I think we should reprogram the earlier funds
before we do this again."
The Senate broke for lunch about 2 p.m. and took another break around 10 p.m. All senators attended the session.
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