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Charlotte Amalie
Thursday, March 28, 2024
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Senate Decision Could Jeopardize Broadband Initiative

Despite warnings from officials about the possible loss of $68 million in economic stimulus funds and the "termination" of the government’s ongoing broadband initiative, senators still voted Thursday to send a bill to help finance the project back to committee for consideration.

The vote came down around 8:30 p.m. Thursday, after hours of testimony from members of the government’s financial team. The bill authorizes the issuance of up to $42 million in gross receipts tax bonds to help finance the broadband project, which has pulled in multiple American Recovery and Reinvestment Act (ARRA) grant awards for the territory.

The receipt of the federal stimulus funds also comes with tight deadlines for spending and implementation, which has left Public Finance Authority and V.I. Next Generation Network (a subsidiary of the PFA set up to oversee the project and man the network) scrambling to meet the mandates.

At a recent meeting of the viNGN board, for example, it was said that $150,000—$100,000 of which is ARRA funding, while the remaining $50,000 is part of a local match—had to be spent by the end of this month on equipment and the construction or build-out of various public computer centers, along with $2 million on the network itself.

"We’re negotiating contracts worth over $40 million," viNGN President Julito Francis told senators Thursday, adding that government has to spend $31 million by next quarter. "The contracts need to be entered into before the end of next month, and the cash has to be there."

Asked during the afternoon portion of Thursday’s session what would happen if the government took six to eight weeks more to approve the bill, Francis said he was to give the federal government on Friday assurances of a commitment to provide the local match needed for the project, which includes the bond proceeds and $15 million in in-kind services from the V.I. Water and Power Authority.

"Tomorrow I have a deadline," he said. "We have to provide quarterly and bimonthly updates on this, and I have to submit to the federal government a commitment that shows we do have the cash and in-kind match to do our part in this system. If I cannot give that assurance, they would look to freeze our funds and terminate this program."

Asked by senators why the local government could not just provide the minimum $29.4 million match, Francis explained that it wouldn’t be enough to fund the entire project, just the building of the network.

The viNGN project proposes to lay 244 miles of new fiber cables that connect over 700 pieces of network equipment throughout the territory, Puerto Rico and Miami in an effort to reduce residents’ internet costs and increase connectivity speeds. Also included in the more-than-$100-million project is the construction of more than 50 public computer centers, along with the provision of training opportunities for V.I. residents in educational and economic development.

In a final plea before the Senate Thursday, members of the government’s team said the project would also give territory the opportunity to create a "technologically based economy" that will enhance and benefit future generations. Members of the team were concerned that senators’ objections over Francis’ $170,000 salary was the only issue holding the bill back, and explained that the it would have cost the government more to bring in someone from off-island.

"The issue is not Mr. Francis’ salary," said Nathan Simmonds, head of the governor’s financial team. "It is the opportunity to create this kind of industry that can’t be missed."

Making the motion later to send the broadband bonding bill to the Economic Development, Technology and Agriculture Committee for further debate, Sen. Louis P. Hill said he was "extremely disappointed" in the financial team’s presentation and hoped to get a better understanding of the project and the proposed financing once a new hearing is scheduled.

"It is a significant investment and a significant decision, and I hope we can have some additional discussion on it," he said.

Voting to send the bill to the Economic Development, Technology and Agriculture Committee for a second airing were Sens. Craig W. Barshinger, Hill, Neville James, Shawn-Michael Malone, Terrence "Positive" Nelson, Nereida Rivera-O’Reilly, Usie R. Richards, Patrick Simeon Sprauve and Alvin L. Williams.

Voting against the motion were Sens. Carlton "Ital" Dowe, Alicia "Chucky" Hansen, Ronald E. Russell, Sammuel Sanes, Celestino A. White Sr. and Janette Millin-Young.

Malone, the committee’s chairman, said he plans to schedule a hearing on the bill for April 15.

All senators were present during Thursday’s session.

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