May 26, 2009 — Slumping local revenues and slow-moving federal economic stimulus funds have pushed the government to float $85 million worth of bonds to jump-start critical capital improvement projects.
If authorized by the Senate, the bonds would be floated as soon as possible, putting money on the street by the end of summer, Public Finance Authority head Julito Francis said during a Committee of the Whole hearing Tuesday. The bonding proposal was requested by the governor over the weekend, and comes on the heels of another $400 million bonding request that was debated twice on the floor but never approved by the Legislature.
Those bonds were to be backed by gross receipts tax (GRT) revenues that Francis has said are dwindling due to economic conditions and the Senate's recent mandate to increase the GRT exemption for certain small businesses. While the $400 million proposal is not off the table yet, local matching funds — or rum revenues — will be used to back the new bond issue, officials said Tuesday.
Rum revenues are expected to increase over the next five years once the Captain Morgan Rum distillery on St. Croix gets up and running, Francis said. The switch from gross receipts taxes as the repayment source will allow the bonds to be better received on the market, he added.
About $75 million would be divided up between local schools ($12 million); solid waste projects and facilities ($6 million); emergency management equipment and facilities (more than $9 million); and a slew of road repairs (more than $20 million). Some of the projects were included in the previous $400 million bonding bill, but many are new, according to Nathan Simmonds, the governor's senior policy advisor. The government would also need about $10 million to set up a reserve fund for about $7 million to pay for the government's last debt service payment or to finance other projects and cover the cost of issuing the bonds.
The governor requested $75 million Saturday, and Francis asked that senators amend the total to $85 million.
"Although the 27th Legislature punted on our authorization request presented six months ago, we strongly urge that the 28th Legislature act with post haste and pass this legislation now," Francis said Tuesday. "The economic crisis, though showing signs of positive impact from the ARRA (American Reinvestment and Recovery Act) dollars flowing into the economy, is still far from establishing a beach front from which a sustainable economic recovery can take hold."
The territory's economy is moving into its weakest point of the year, Francis said. Meanwhile, a majority of the projects included in the new bonding bill are currently under way, or can be jump-started quickly, according to Public Works Commissioner Darryl Smalls. And some of the projects just required a little extra funding so they could be wrapped up, he added.
But the money has to come soon; otherwise, Public Works will be burdened with increasing construction costs or additional repairs as road conditions continue to deteriorate, Smalls said.
All projects have been deemed top priorities — including, among others, the completion of Ivanna Eudora Kean High School's track and field, which will play a major role in the school's re-accreditation. Money will also be put toward bringing the Bovoni landfill into compliance with federal environmental protection mandates and getting the territory's new emergency 911 system up and running, officials said.
Throughout the day, senators laid out several other projects they said should have been included in the proposal.
"There are clearly some very valid points raised by senators about other projects not included in the proposal which may be equally important to the citizens, and there ought to be some opportunity, I think, for us to explore those," Senate President Louis P. Hill said later.
Other senators said the government has already received authorizations from the Senate on other bond issues, and should first focus on seeing those through instead of continuing to build debt.
"The whole idea is this — there are other authorizations lurking out there," said Sen. Terrence "Positive" Nelson. "If we're the spending authority — and we are — we have to figure out what's out there, clean it up and then we can move forward. I'm not a big fan of the borrowing — I almost feel like I'm playing monopoly, except this monopoly is with taxpayers' dollars."
It's unclear at this point whether the bonding proposal will brought to the floor during the two-day session scheduled for the end of the week.
Present during Tuesday's meeting were Sens. Craig W. Barshinger, Adlah "Foncie" Donastorg, Carlton "Ital" Dowe, Hill, Wayne James, Shawn-Michael Malone, Nelson, Nereida Rivera-O'Reilly, Usie R. Richards and Patrick Simeon Sprauve.
Projects slated for funding in the $85 million bond issue are:
Education:
– expansion of the cafeteria at Ulla F. Muller Elementary School: $500,000 has already been appropriated for the project, but an additional $200,000 is needed to finish;
– completion of the Ivanna Eudora Kean High School gym: entails construction of a "watertight" facility in two phases. Plans for the first phase — building a envelope that will surround the facility — are being completed, and bids will be advertised next week;
– construction of Kean High's track and field: the IAAF certified track and field facility which includes a football field in the center requires an additional $2.5 million to put in the track and lighting;
– renovations at John H. Woodson Junior High School auditorium: original plans included the installation of new seating, lighting and air-conditioning systems, among other things. Changes to the design were worked in after it was discovered there was a "significant infiltration" of water in the facility, adding another $300,000 to the project;
– electrical/mechanical upgrades to Woodson Junior High: recently developed plans for the installation of the 42 classroom air-conditioning systems (which are on-island) and upgrades to the school's electrical system are expected to cost $1.25 million; and
– architectural and engineering services, estimated at around $800,000 for many of the capital improvement projects currently under way.
Public Works:
– Route 79 (St. Croix): the one-mile of roadway on the western side of Sunny Isle Shopping Center requires "extensive" repairs, which are estimated at $328,328;
– Altona Lagoon (St. Croix): the half mile of roadway east of Christiansted is flat and floods easily, causing rutting and pot holes. Repairing the road is expected to cost $254,365;
– Estate Tulipan Welcome: just over a quarter-mile of roadway has long been plagued with deteriorated roadways that cannot be graded or patched. An overhaul of the area is expected to cost $294,211;
– Estate Mary's Fancy (St. Croix): the approximately one-mile of roadway that connects the Queen Mary Highway with North Shore Road is deteriorated, prompting Public Works to do some in-depth repairs expected to cost $629,788;
– Other St. Croix road repairs include: Hanna's Rest/White Lady ($575,182); Creque Dam road ($558,098); Mahogany Road ($672,057); Ham's Bluff/Route 63 ($1.3 million); South Gate/Route 60 ($672,057); Mon Bijou ($191,062); Cane Bay ($672,057); Estate Lower Love/Midland Road West ($279,082); Mount Pleasant East ($181,342); and Concordia West ($134,716); along with sections of Little Hospital Street, Queen Street and New Street that were damaged during the construction of the Christiansted Bypass ($262,609);
– overlaying of deteriorated roads at Frederiksted Cemetery ($176,167), Christiansted Cemetery ($116,996) and Kingshill Cemetery ($129,535);
– Kongens Gade/Education Street (St. Thomas): the section of Kongens Gade that connects east-to-west bound traffic from Bjerge Gade and Hospital Gade requires re
surfacing, which is estimated to cost $173,993;
– Routes 39 and 394 (Estates St. Joseph and Rosendahl, Wintberg and Mandahl on St. Thomas): subsurface drainage conditions have caused cracks and failures in the 1.8 miles worth of concrete roadway. Repairs, a complete overlay and work on a few drainage features is expected to cost $1.5 million;
– Emile Francis Memorial Drive (Route 38 on St. Thomas): the 1.24-miles of roadway connect the Eastern Cemetery/Sugar Bay to the Red Hook Ferry Terminal, and has been continuously plagued with potholes. Rehabilitating the road, including adding drainage and sidewalks, is expected to cost a little more than $1 million;
– Hull Bay Road (Route 37 on St. Thomas): stretches from the north side of St. Thomas from Drake's Seat to Hull Bay Beach. Repairs to a half-mile of distressed roadway are estimated at $627,813;
Other St. Thomas road repairs include: Schneider Regional Medical Center access road ($275,442); Catherineberg Road/Garden Street, Route 379 ($383,993); Agnes Fancy/Catherineberg Road, Route 379 ($250,000); Adel Gade ($129,176 to replace collapsed or capsized sections of the street); West End Road/Route 301 ($438,515); and Estates Santa Maria, Fortuna, Caret Bay and Crown Mountain ($423,390);
– installation of roadways, sidewalks and drainage structures within the Eastern Cemetery ($450,000);
– Bordeaux Road (St. John): the one-mile section of unpaved road requires the installation of five culverts and several sections of concrete swaling, along with a new road surface that will give Coral Bay residents an alternate route back and forth (estimated cost $1.2 million);
– John Head Road/Route 206 (St. John): runs from Gerda Marsh Drive to North Shore Road, repairs estimated to cost $251,000;
St. John parking: Public Works will be constructing up to 150 parking spaces near Enighed Pond, estimated to cost about $800,000 (work is being done in conjunction with the V.I. Port Authority) ;
– Frank Powell Park Revitalization: an additional $200,000 is required to complete the plans that include electrical work, plumbing, brick tiling and the installation of park benches; and
– $2.5 million for each district is also included to cover any cost overruns or additional work.
Emergency management projects:
– $6.2 million has been included for continuing repairs to the new V.I. Territorial Emergency Management Agency building;
– $1 million for the 911 system;
– $2.2 million for two aerial ladders for the V.I Fire Services.
Planning and Natural Resources, fish market renovations:
– $650,000 for the LaReine fish market (St. Croix);
– $225,000 for the Frederiksted Pier fish market (St. Croix);
– $225,000 for the Frenchtown fish market (St. Thomas); and
– $200,000 for the St. John fish market.
V.I. Waste Management Authority:
– reconstruction of the south slope at St. Croix's Anguilla landfill – $2 million; and
– installation of gas monitoring systems at the Bovoni landfill on St. Thomas – $3.8 million.
V.I. Economic Development Authority:
– $5 million for the authority's development loan program (money would be put toward loans and guarantees for small-to-medium sized businesses, local entrepreneurs, local financial institutions, sureties and insurance companies, along with lines of credit for small-to-medium sized tourism businesses).
Another $15 million has been included in the bill for any other projects deemed critical by the various departments and agencies.
Back Talk
Share your reaction to this news with other Source readers. Please include headline, your name and city and state/country or island where you reside.
