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HomeNewsArchivesCrime, Hovensa, Top Topics in deJongh's Seventh State of the Territory Address

Crime, Hovensa, Top Topics in deJongh's Seventh State of the Territory Address

Gov. John deJongh Jr. delivers his seventh State of the Territory Address Monday evening (photo courtesy of Government House).Gov. John deJongh Jr. urged judges to cut back on pretrial release of violent offenders and dispelled concerns the territory could run out of oil and gas if negotiations with the shuttered Hovensa refinery turn sour, during his State of the Territory Address on Monday night. [2013 State of Territory Address]

As always, deJongh also covered the full spectrum of issues facing the territory, from good news like increasing graduation rates to bad news like the dire financial straits of the Government Employee Retirement System. To succeed, the territory must address the three "pillars" of economic development, education and public safety, deJongh said.

He received his biggest applause of the night from the throng of notable Virgin Islanders packing the Earle B. Ottley Legislative Chambers on St. Thomas when he castigated judges for letting too many violent offenders out before trial.

"How is it that one judge can release a defendant pending trial on the condition that he obey all our laws, and when the defendant is re-arrested and probable cause is found, that defendant is let out on the street again before ever having to stand before the judge who let him out in the first place?" deJongh said to loud applause.

In the last three years just on St. Croix, "we saw over 100 cases where someone was arrested, then released on bail pending trial before the first offense had even been brought to trial," he said. Some were arrested for murders and other violent crimes, he said.

"Our judges simply must give greater weight to the fact that many of the defendants they are releasing are a danger to the community and these offenders should be kept in jail pending trial," deJongh said to yet louder applause.

Recalling U.S. President Barack Obama’s recent focus on gun regulations in the wake of the mass murder at Sandy Hook Elementary School in Connecticut, deJongh said V.I. laws are stricter than most stateside jurisdictions. But the federal government needs to step up in controlling the flow of weapons into the territory, he said.

"We need the Postal Service to reinstate the postal inspectors it transferred to other jurisdictions," as Delegate Donna Christensen has requested, he said.

"Border protection is most certainly a federal responsibility he said, acknowledging that local vigilance and cooperation are an important ingredients." And in this regard, we have substantially improved our relationship with the Bureau of Alcohol, Tobacco and Firearms, which is once again a presence in the territory," deJongh said.

While negotiations with Hovensa about the future of the shuttered refinery are hard-fought and ongoing, the governor stressed gasoline and other fuels will continue to flow to the island and insisted there is no risk Hovensa will deny use of its facilities to bring in fuel.

"This will not and cannot happen. The owners of Hovensa have threatened no such action, and I am confident that they would never carry out any such action, as it would be gratuitously vindictive to a community where they have enjoyed a long and profitable history," deJongh said.

"Moreover, I am sure they have been advised by their attorneys –– as we have by ours –– that any such disruption would directly and immediately threaten the public health and safety and would not survive the instantaneous legal challenge it would provoke. Hovensa and the government have openly discussed the need to keep these delivery systems open and operating, and the government will ensure that they are," he said.

Similarly rumors that Hovensa has threatened to walk away from its obligations to clean up the environmental damage to the property are completely unfounded, according to deJongh.

"I am sure that the owners would like to minimize their obligations and costs, but that is a business decision, nothing more," deJongh said.

Ultimately the administration’s position is that Hovensa must either sell the property to someone who will reopen it as a refinery or some other heavy industrial facility, or clean up the property to a pristine condition, so it can be used for other purposes, he said.

If the company were to go into bankruptcy, the territory would be "the largest creditor," and first in line to be paid, deJongh said, because of "the breach of contract claims we would assert for the central government as well as on behalf of WAPA."

He said if "we cannot reach a compromise that achieves our interests, which are substantially positive for St. Croix and the Virgin Islands, we will pursue our claims aggressively and hold Hovensa and its owners to their obligations under the law and our agreements.” DeJongh said he is "comfortable with the research our lawyers have done and the outcome we can anticipate at the end of the bankruptcy process."

With the Government Employee Retirement System facing potential bankruptcy in less than a decade if it does not receive much higher contributions, deJongh said his GERS task force will submit recommendations in the coming months and he will work with the Legislature and the task force "to fashion a plan and suggest legislation."

DeJongh said he had hoped to address it at the outset of his administration by directing new rum revenues toward GERS, but the global recession forced the territory to use those funds to keep the schools, health care system and police department functioning.

Energy costs remain a major hurdle for households and businesses, and while that will not change right away, he said, costs should drop substantially in less than two years.

"WAPA is on a path to convert to a flexible generating capacity so that it can always use the lowest cost available fuel – be that diesel, propane or natural gas – within 18 months," he said. "The change to propane is projected to reduce electricity costs by one-third, while the longer-term conversion to liquefied natural gas should enable further reductions in electricity costs," he said.

While the territory is seeing severe stress due to the world economy and the Hovensa departure, there are bright spots in the local economy – from rebounding tourism to a bumper crop of companies applying for Economic Development Commission tax breaks and hoping to set up in the territory, deJongh said.

The Gross Territorial Product rose in 2010, but was still down 7 percent from its 2007 peak, to roughly $4.5 billion, he said. And government revenues remained 19 percent below their 2008 peak. This was before the Hovensa closure, he said, so the numbers are likely worse now. And indeed, the government’s budget is showing declining revenues.

"In the current fiscal year our operating revenues remain $50 million below expenditures and there remain substantial obligations that are not funded," deJongh said.

Tourism is on the rebound, with the total number of cruise ship passengers near pre-recession levels and air visitors now higher, but total visitor expenditures remain down significantly, he said.

Government capital projects and increasing interest in the EDC program is softening the damage from these economic woes, he said, pointing to capital projects at Crown Bay and the West Indian Company, as well as requests for proposals to rebuild Frederiksted’s Paul E. Joseph Stadium, among others.

"The EDC today has a larger number of new applicants moving through the process than in recent years," he said. There are new companies in emerging fields like mortgage services, financial analysis and high-tech manufacturing that have all moved in and are hiring, he said.

"And what makes the approval of these applications different is that, unlike past practice, now an approved applicant has to start operation within 12 months of approval versus the five years that was previously allowed," deJongh said.

Attracting smaller companies like this "is the model of our economic future," he said. "Gone is the era of one employer with a thousand employees, but instead we will have tens if not a hundred new smaller companies with five, 15 or 50 employees forming the base of a dynamic and adaptable economy."

After several years with tense, sometimes combative relations with the Legislature, the tone of this year’s address was conciliatory and cooperative. And the speech came on the heels of a closed-door meeting between the governor and senators on Sunday that appeared to generate some good will among the legislators.

DeJongh ended the address with a call for unity, saying that although there are great challenges, "we shall prevail."

"Now, more than ever, we must move forward together. Let us move forward as one," DeJongh said.

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