USVI governor sends borrowing bills to legislature

The governor has also submitted legislation to expand investments in energy conservation programs at the territory’s public schools and hospitals, while generating jobs and business opportunities in the economy.

In recent letters to Senate President Ronald Russell, de Jongh requested the two bills, which authorize borrowing and address outstanding issues involving government bonds, be added to the upcoming Senate session’s agenda. 

“As you and your colleagues are well aware, if we are to secure a broad based and sustainable economic recovery for the financial liquidity problems of this territory in these austere times, we must find and institutionalize long-term solutions for our people,” de Jongh wrote to Russell. 

The first bill authorizes the Virgin Islands government to issue bonds that will provide $20.5 million for capital projects across the territory and well as authorize the acquisition of police vehicles. The bill would also allow for the restructuring of outstanding government bonds to provide debt service savings. The bill also provides clarifying language allowing the long-term financing of the territory’s high-speed Internet development project through issuance of bonds backed by either Gross Receipts Taxes or Matching Fund Revenues.

The second bill authorizes funding for the payment of past due workers compensation claims and provider services. “Without such amendments, we will be unable to pay our injured and incapacitated employees at their time of greatest need,” de Jongh wrote.

A third proposal from the administration would authorize government borrowing to expand investments in varied energy conservation programs. The bonds issued through the Public Finance Authority would fund projects to “promote and deploy energy conservation and renewable energy at public facilities and other large power consumers” in the US Virgin Islands, de Jongh wrote, ultimately saving the territory money and creating jobs.

De Jongh urged passage of the bill, explaining that the costs incurred with the borrowing would be offset through annual savings to the General Fund, guaranteed by the Energy Services Company (ESCO) performing the work. “Failure to produce the guaranteed level of savings will require the ESCO to compensate the Government of the Virgin Islands for the amount of any shortfall.” 

The proposed bonds would be secured by either Matching Fund Revenues or Gross Receipts Tax Revenues, ensuring the government borrows money at the lowest cost possible.

Last October, the Virgin Islands Energy Office, part of the Office of the Governor, completed the pilot energy savings project with $6.7 million in American Recovery and Reinvestment Act funding.

That pilot project implemented energy and water conservation measures in 11 US Virgin Islands schools, with Energy Systems Group as the ESC selected to undertake the work. The project, which included the use of local suppliers and workforce, was completed on time and on budget, without any disruption at the schools. Because of the project, the Education Department will save more than $2.6 million in energy and water costs over the next three years, and some $12 million over the next decade. 

The proposed bonds will allow expansion of the installations to 23 Department of Education facilities and to the territorial hospitals. 

Continuing the investments in energy conservation will save money for the Virgin Islands government, and support investments in plant upgrades and maintenance of facilities. The projects will also create jobs and training for local workers in related fields, according to de Jongh. “I ask that the members of the 29th Legislature give this proposal serious consideration as part of our joint efforts to stabilize the economy of our Virgin Islands and mitigate the high on-going energy costs that we are experiencing at our public schools and hospitals.”

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