81.7 F
Charlotte Amalie
Saturday, June 22, 2024
HomeNewsArchivesMAPP DETAILS HOW PFA BONDS BEING PUT TO WORK

MAPP DETAILS HOW PFA BONDS BEING PUT TO WORK

June 12, 2002 – Making an official appearance in the chambers where he spent three and a half terms as a legislator, Kenneth Mapp as Public Finance Authority director of finance and administration reported to the Senate Finance Committee Wednesday on the PFA's fiscal and operational status.
He explained how the authority has raised money and how it has put and is planning to put that money to work.
Mapp, who also was lieutenant governor in the Schneider administration, reported the completion of three major projects funded by 1998 bonds:
– The Mangrove Lagoon sewage treatment plant, at a cost of $15.6 million.
– Lockhart Elementary School rebuilding, at $12.5 million.
– Peace Corps Elementary School rebuilding, at $13.1 million.
Both schools, as well as Bertha C,. Boschulte Middle School, were destroyed by Hurricane Marilyn in 1995. The Federal Emergency Management Agency provided disaster assistance funding to rebuild all three.
The BCB work is running behind schedule and at a considerable cost overrun, Mapp said. It is now 90 percent completed at a cost of $20.5 million. He said he expects it to be done by the start of the 2002-2003 school year.
Last August, Mapp's predecessor, Amadeo Francis, told the Senate Finance Committee that the costs for BCB had risen dramatically beyond projections, while construction was "woefully behind schedule." Francis said construction costs initially pegged at $20.5 million had already reached $28 million. He said costs had risen on all construction materials and it had been necessary to implement change orders. Debate raged earlier this year over whether the BCB gymnasium should be air conditioned or have a wooden floor. Last month, the PFA approved an additional $425,000 for air conditioning.
In a written statement, Mapp explained the history and mandates of the PFA. The agency was created by the Legislature in 1988 as a public corporation and an autonomous government instrumentality whose primary responsibility is to raise capital for essential public projects.
The authority is authorized to borrow money and issue bonds, and to lend the money borrowed or the proceeds from its bonds to the government or private enterprises, subject to legislative approval. It also can establish revolving loan funds, enter into contracts and agreements with the local and federal governments, and acquire, sell, lease, mortgage, pledge or dispose of property or encumber any interest therein.
A board of five directors, with the governor as chair, exercises the authority's power. The commissioner of Finance and director of the Office of Management and Budget occupy the other two government seats, and there is one private sector member from each district.
Approval of private activity bonds
Mapp said the PFA in May approved several other projects that are to be financed by private activity bonds. These are bonds issued by the PFA that are to be repaid by the private sector recipients with no financial risk to the PFA. Approved were:
– $12 million for Botany Bay development on St. Thomas. The developers have agreed to renovate and improve the existing government-owned sewage treatment plant in Estate Bordeaux, so as to bring it up to federal Environmental Protection Agency standards. The plan calls for a dock which would be available for emergency use by government agencies and a reverse-osmosis plant where the water produced will be available to Bordeaux area residents.
– $10.7 million for Hovensa, for use in solid waste disposal facilities.
– $15 million each for the V.I. Housing Authority and the Housing Finance Authority, to assist in the future development of low- and moderate-income housing.
– $425,000 for air conditioning for the BCB gym.
Sen. Carlton Dowe and BCB Principal Carver Farrow lobbied for the air conditioning for several months. Dowe took the opportunity Wednesday to thank Mapp for his "energy and quick work getting the gym appropriation approved."
Not one to let an opportune moment slip by, Dowe appealed to the governor (via the Senate television transmission, which Dowe says Turnbull is always watching) to act on his legislation for improvements including a new gym at Addelita Cancryn Junior High School. Dowe suggested the government could float bonds for the project, just as it did for improvements to the Golden Grove Correctional Facility on St. Croix, "and maybe keep some youngsters from going there."
Sen. Adlah "Foncie" Donastorg wanted details on the BCB construction overruns, but Mapp said he wasn't at liberty to discuss the matter in detail, "We have issues with the contractor," Mapp said, adding that the PFA is assessing the contractor daily penalties on the overrun. And "we are still quarreling" about the project completion date, he said.
In answer to Donastorg, Mapp said the $20 million doesn't include the $425,000 for the air conditioning.
Donastorg also asked about the status of former PFA finance and administration director Amadeo Francis. Turnbull fired Francis last December, but in February the PFA board voted to bring him back to smooth the transition for two individuals the board was to choose to take his place — one as finance director and the other as administrative director. In March, Turnbull announced that he had approved the contracting of Mapp to hold both posts, as Francis had done.
"Did you retain Francis?" Donastorg asked Wednesday. "No, we did not," Mapp replied. He said, however, "I would like to publically thank Mr. Francis for his assistance in spending several days with me."
Mapp said the PFA's, 2002 debt service payments on 1998 bonds come to $40.4 million, and such payments on 1999 bonds total $22.4 million. The bonds have maturity dates of 2026 and 2029, respectively.
He told the senators that the PFA acquired the King's Alley Hotel complex on St. Croix last year for its sole bid of $4.6 million, which represents the amount owed to the authority for managing the property.
Mapp also described the Tobacco Settlement Financing Corp., an independent instrumentality of the V.I. government created to issue bonds on the principal amount of the territory's share of the national settlement.
The tobacco settlement will bring the Virgin Islands nearly $50 million over a period of 25 years. In order to benefit from a more immediate and economical use of the funds, the PFA in November successfully floated $21.7 million in bonds backed by the territory's share of the settlement proceeds.
Mapp said $18.4 million in net proceeds was received for disbursement. By legislative mandate, the territory's two hospitals each get 32 percent of the tobacco funds and the Health Department gets 36 percent. Thus, from the bond proceeds, each hospital is getting $5.9 million and the Health Department, $6.6 million.
Greater St. Croix presence planned
Going over the PFA's proposed $3.65 million Fiscal Year 2003 budget, Mapp said the figure includes professional service contracts for a staff of five, which he may increase; accounting and auditing services; bond counsels and other legal advisers; trustee and bank custody fees; insurance; and office rental. He said the authority is looking for new office space on St. Thomas.
Responding to a question from Sen. Alicia "Chucky" Hansen, Finance Committee chair, Mapp said one of the PFA's 2003 goals is to establish a presence on St. Croix, and that he intends to open an office on the island within the next 45 days. Also, he said, the authority is providing financial support for the administration's St. Croix Development and Strategic Marketing Plan.
The plan includes development of a destination building; completion of a new Tourism Department headquarters at the Oscar E. Henry Customs House; beach and upland improvements at Fort Frederik Beach, Veterans Park and theVincent Mason Pool in Fredriksted; renovating and cleaning Fredriksted and Christiansted; and providing ren
t abatements for retail operations at King's Alley Walk and Fredricksted Mini Mall.
A further project, Mapp said, is to assist in raising the necessary capital for the construction of new wastewater treatment facilities. He didn't say how this would fit in with the mandates of the governor's proposed new Waste Management Authority.
Hansen objected to the current makeup of the PFA board, saying it "favors St. Thomas." She said the board should be "restructured," as it has only one St. Croix member now — private sector representative Paul Arnold, who is running for lieutenant governor on a ticket with John deJongh. Should the ticket win, there would be no St. Croix member, Hansen said.
However, since by law the board must include a private-sector member from the St. Croix district, if Arnold were to step down, the governor would need to nominate another St. Croix resident to take his place.
Committee members Douglas Canton Jr., Donald "Ducks" Cole, Donastorg, Dowe, Hansen and Norma Pickard-Samuel attended the hearing. Sen. Norman Jn Baptiste was absent. Sen. Roosevelt David, not a committee member, also attended.

Publisher's note : Like the St. Croix Source now? Find out how you can love us twice as much — and show your support for the islands' free and independent news voice … click here.

Print Friendly, PDF & Email
Keeping our community informed is our top priority.
If you have a news tip to share, please call or text us at 340-228-8784.

Support local + independent journalism in the U.S. Virgin Islands

Unlike many news organizations, we haven't put up a paywall – we want to keep our journalism as accessible as we can. Our independent journalism costs time, money and hard work to keep you informed, but we do it because we believe that it matters. We know that informed communities are empowered ones. If you appreciate our reporting and want to help make our future more secure, please consider donating.

UPCOMING EVENTS

UPCOMING EVENTS