Oct. 26, 2004 The territory received good news from the Federal Emergency Management Agency Tuesday its Hurricane Marilyn loan from the agency is being forgiven.
In a news release issued Tuesday, Gov. Charles Turnbull said FEMA has canceled the entire $185 million balance on the loan it gave the V.I. government when Marilyn devastated the territory in 1995.
"This is most welcome news for all Virgin Islanders, particularly in the present economic climate," Turnbull said. "FEMA's action vindicates our strategy, first set in motion five-and-one-half years ago, for reducing our debt and setting the stage for financial responsibility and accountability."
Turnbull said with FEMA's action, the territory's federal debt has been reduced by $1 billion under his administration.
If FEMA had not canceled the debt, the territory's debt service would have amounted to more than $22 million annually based on a 10-year payment of the entire loan. This would have put a "serious squeeze on the government's tight cash flow," Turnbull said.
This is the second time under the Turnbull administration that a FEMA hurricane relief loan was canceled. In late 2001, FEMA canceled the $46 million Hurricane Hugo loan after having granted the government a one-year forbearance in April of 1999.
The governor had first approached FEMA director James Lee Witt in February of 2000 seeking forgiveness of both the Hugo and Marilyn loans. (See "Turnbull Asks FEMA For Debt Forgiveness").
Tuesday Turnbull commended Office of Management and Budget Director Ira Mills and his staff, members of the U.S. Congress, Washington lobbyists and other members of his administration who had aided in the cancellation of the loans.
Editor's note: The Source initially reported the FEMA debt to be $135 million. It was actually $185 million.
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