March 5, 2007 — In a meeting that notably started on time Monday at 10 a.m. and ended at 10:30 a.m., the Public Finance Authority board voted unanimously to authorize extension of a $104 million private-activity-bond allocation that will go to finance upgrades to the solid-waste and sewage facilities at Hovensa's St. Croix plant.
Every year, the federal government authorizes governmental financial agencies within the states and territories to issue tax-exempt, private-activity bonds to aid private businesses with infrastructure improvements. Private-activity bonds have not been issued by the authority for the past two years, leaving $104 million in bonds available for use. The amount also includes $94,264 left over from 2004.
The issuance of the bonds, which the PFA actually makes a little money on, was set to close by Dec. 30. But Hovensa missed the deadline because of the voluminous amount of paperwork involved, said Hovensa Vice President Alex Moorhead, in attendance at the meeting.
"When it became obvious we weren't going to meet the deadline, we sent a letter (to the previous administration) asking that the deadline be extended to June 30," Moorhead said. The outgoing administration was not able to address the request before its departure.
Thus Monday's meeting became the first PFA meeting called by Gov. John deJongh Jr., who by virtue of his position serves as chairman of the board. DeJongh, who is in Washington, D.C., for a governors' conference, convened the meeting via telephone.
Hovensa will pay an issuance fee to the PFA of about $1 million and all of the authority's administrative costs, and is fully responsible for repayment of the bonds and interest on the bonds, Moorhead said. The $90 million wastewater project is already underway.
Hovensa has received private-activity bonds before, Moorhead said in a phone interview Monday afternoon. He also said that, as far as he knew, no other private enterprises have applied for them.
The bonds must be used for specific types of capital projects, he said, and if they are not used within three years they must be returned.
Though the board members in attendance approved the extension until June 30, Moorhead said he expected the bonds to be issued much sooner than that — sometime this month.
Hawkins Delafield and Wood of New York City were appointed as the bond counsel.
In attendance Monday were board members Paul Arnold, Austin Nibbs, Debra E. Gottlieb, along with deJongh via telephone.
Several people in attendance remarked that it was the first time in memory that a PFA meeting — the only board chaired by the sitting governor — has started on time.
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