April 19, 2004 – Authorization for a $105 million bond issue to finance sewage system projects passed by the Senate last month on the narrowest of votes has been signed into law by Gov. Charles W. Turnbull, Government House announced on Monday.
Turnbull, who had sought authorization for $180 million in new bond issuance, did not have an easy time convincing the lawmakers to approve the measure. The Legislature deliberated until after midnight in a March 23 special session called by the governor, finally approving the lesser amount by a vote of 8-7.
The $180 million request was to fund new wastewater treatment plants on St. Thomas and St. Croix, territorywide sewage system and road improvements, and cleanup of the Anguilla and Bovoni landfills. (See "New bond issue finds little favor in Senate".)
A number of senators opposed issuing more bonds so soon after the $268 million issue of last December, which has money earmarked for some of the same projects.
Meantime, the governor has asked for $75 million in new federal funds for waste management projects. Last Dec. 10, he submitted to the U.S. Department of Interior a draft of a proposed new memorandum of understanding to supersede the one signed by him and then-Interior Secretary Bruce Babbitt in 1999.
In the draft new MOU, Turnbull asked for $104 million in federal assistance over the next five years, most of it to fund wastewater and solid waste management infrastructure projects. He requested "no less than $15 million per year for the next five years, beginning in fiscal year 2004" for improvements to the territory's solid waste, wastewater and transportation systems to bring it into compliance with federal agreements and court orders dating from 1985.
David B. Cohen, deputy assistant secretary of the Interior for Insular Affairs, said last month that the governor's draft was just that, a draft. Speaking by telephone from Washington, D.C., on March 29, he said he was aware of the Senate's authorization a week earlier for the new $105 million bond issue earmarking $70 million for treatment plants and sewer repairs.
"I would not put too much emphasis on the amounts in the first draft," Cohen said of the proposal presented by Turnbull. "These amounts are really a statement of need, rather than an actual expectation that the federal government can provide."
Cohen said then that he would respond to Turnbull's draft in the "next two weeks, may be sooner." James O 'Bryan, Government House spokesman, could not be reached Monday evening to comment on whether the governor has received Cohen's response.
The $105 million bond issue the governor has now signed includes $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 repair, replacement and improvement of the territory's sewage collection system It also earmarks $5 million for repair and construction of public roads on St. Croix, another $5 million for the same thing for St. Thomas and St. John and $5 million to fund any necessary reserves, plus money for costs associated with the issuance of the bonds and loan notes.
Turnbull said in his legislation seeking the bonding authorization that two firms, VWNA Caribbean, a subsidiary of US Filter Operating Services Inc., and Veolia Water S.A. had been awarded contracts for the design, construction and operation of the waste treatment facilities. On Aug. 7, Veolia Water's parent company in Paris issued a release stating that it had received a $123 million, 20-year contract to design, construct and operate one wastewater treatment plant on St. Thomas and another on St. Croix. (See "Sewage plants contract for $123M and 20 years".)
Attorney General Iver Stridiron confirmed in a Senate Planning and Environmental Protection Committee meeting last week that the governor had signed the contract with VWNA Caribbean, a subsidiary of Houston-based Veolia Water North America Operating Services Inc. According to the Veolia release, it is the V.I. government's "first-ever design-build-operate contract."
Kenneth Mapp, Public Finance Authority director of finance and administration, said at the March 23 Senate session that the bond issue would be funded by additional rum tax revenues which "would not impact the government's revenue stream."
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