Productive was the word used by Gov. John deJongh Jr. Wednesday to describe the Public Finance Authority’s monthly board meeting on St. Thomas.
The meeting wrapped up after about four hours with approvals for several funding requests and resolutions giving the green light to a now $95 million bond issue and as much as $250 million in short term financing for the government.
What’s been dubbed as the "borrowing bill" was signed into law last month by deJongh. It gives the government access to money to cover operating expenses in the wake of budget shortfalls projected for fiscal years 2009 and 2010. The bill requires the government to borrow internally before turning to the banks, and PFA head Julito Francis said after the meeting that about $50 million would be coming from public fund accounts.
That money will be augmented by a $250 million line of credit from the banking syndicate — a group of banks that jointly lend money to a specific entity — formed by First Bank and Banco Popular. From that, $50 million would be used to repay what was borrowed in public funds, leaving another $200 million available to help plug the budget gaps. For the first three years the government will be paying off interest on the line of credit using money from the General Fund, and will then will work with the banks to figure out how to pay off the rest of the debt using either gross receipts taxes or rum revenues.
The PFA expects to close on the line of credit by mid-to-late August, Francis told board members Wednesday.
The PFA board also approved a resolution authorizing the PFA to float as much as $95 million in bonds for capital improvement projects ranging from school repairs to road work. The proposal, which cleared the Senate at $87 million, has been combined with a previous bond authorization for the construction of wastewater treatment plants, which will now be added to the capital projects list, Francis explained later.
DeJongh, who serves as the PFA board chairman, urged the PFA to try to close on the bonds sometime next month.
Looking at other potential revenue sources for the territory, the board approved a $1 million advance from the authority’s Public/Administration Fund to the Office of Economic Opportunity — the entity set up under the PFA to manage and track federal economic stimulus funds awarded to the territory. The $1 million will be reimbursed with a portion of the approximately $71 million State Fiscal Stabilization Funds the government expects to receive through the federal American Recovery and Reinvestment Act.
Once the money comes in, another $1 million in stabilization funding will go to the OEO, whose overall budget is $3.7 million. The remaining $1.7 million would go toward financing the government’s broadband initiative, which is geared toward increasing the territory’s broadband capacity and developing a strategy to make it available in areas such as local homes, public schools and community centers. Funding for the initiative is also being made available through the American Recovery and Reinvestment Act, and board members approved a resolution Wednesday allowing Francis to negotiate with Stratum Broadband to help the PFA develop the application needed to tap into a possible $1.8 million to $5.8 million in mapping grants, which are due in by Aug. 14.
Another company will be hired to take on the mapping effort, designed to pinpoint the territory’s existing infrastructure and what areas are underserved.
Earlier in the meeting, board members also approved a $517,065 funding request from the Bureau of Information Technology (BIT) to develop the 311 component to the new emergency 911 system, which Francis described as an "information clearing house for the government."
"This was intended to come at a later stage, but since we have the professional services here now, we figured why demobilize and bring them in again later," deJongh explained during the meeting. "This system will take calls about anything that’s happening and re-route them."
The money would come from the authority’s Project/Administration Fund, which will be repaid through either the new bond issuance or line of credit.
PFA board member Keith O’Neale Jr. requested that BIT officials provide the PFA with an accounting of what has been spent on the system and how much more will be requested in the future.
The board also approved a $137,000 funding request to finish the furnishing the Old Danish School House on St. Croix, which is being renovated into office space for the executive branch. The money would come from dividends paid up to 2004 by the West Indian Co. Ltd., a subsidiary of the PFA.
Finally, board members approved the reprogramming of $416,315 from two projects on St. Croix to Property and Procurement for renovations to their offices on St. Thomas. Property and Procurement asked for the reprogramming, since the two projects have been stalled due to lack of funding and are currently unable to move forward, Francis said. The reprogramming is funded by 2003 gross receipts tax bond proceeds.
WICO head Edward Thomas Sr. started out Wednesday’s meeting with his annual report to the board, and said later that he had also come to ask the PFA for "some relief" in paying the company’s annual contribution to the General Fund, which currently stands at $700,000. WICO was unable to make the payment in FY 2008 because of a lack of revenues, he said after the board went into executive session to discuss the matter.
Francis said later that the board had not yet come to a decision on Thomas’ request.
Present during Wednesday’s meeting were board members Angel Dawson Jr., deJongh, Debra Gottlieb, O’Neale and Pablo O’Neill. Board member Roy D. Jackson was absent.
