ST THOMAS, USVI -- On Monday, Governor John de Jongh called the US Virgin Islands legislature into special session on Wednesday to address critical financial needs of the government, including an infusion of working capital to the two territorial hospitals. The proposed legislation also seeks to amend existing law as regarding borrowing funds and the development of the Paul E. Joseph Stadium on St Croix.
Governor John de Jongh
In a letter to Senate President Shawn Michael Malone on Monday, de Jongh wrote that, based on the discussions with the holder of the current cash-flow note and projections for the government’s financial position in Fiscal Year 2015, it is imperative that the government has the flexibility in the borrowing that was earlier authorized by the Senate.
“Local financial institutions are unlikely to provide short-term financing to the government without suitable provision for the eventual repayment of such financing upon maturity. As Act No. 7631 (Bill No. 30-0427) was silent on the subject, and since our projections indicate limited resources would be available upon maturity in 270 days, the proposed amendment provides the necessary flexibility to structure a financing that would meet the approval of local lending institutions. The amendment authorizes either the issuance of bonds or notes in anticipation of issuing bonds, or one or more loans with a provision for a term-out or conversion upon 270 days, with a maturity not to exceed 20 years from the date of the original borrowing,” de Jongh wrote.
The governor explained to Malone that he has approved authorizations for the territorial hospitals, payments to the VI Water and Power Authority and the Sea View Nursing Home; however, that approval is contingent on the ability of the government to obtain the necessary funding.
“Both hospitals have expressed the urgent need for this funding, particularly the Governor Juan F. Luis Hospital, which has indicated its inability to meet the next payroll and purchase badly needed medications, and Schneider Regional Medical Center's pressing need to address some tax obligations. WAPA has also expressed its concern for the potential impact that the outstanding receivables from the hospitals have on their cash flow as well as their bond rating. Additionally, the Commissioner of the Department of Human Services has indicated the potential for the disruption of long-term nursing care services without some assistance for Sea View, the only certified nursing home in the Territory,” he wrote.
De Jongh told the Senate that its approval of this proposal will give the administration the negotiating flexibility to meet with the banks and other financial institutions to try and meet these critical needs.
Additionally, the governor’s proposal authorizes funding of a design/build contract for the Paul E. Joseph Stadium project, inclusive of little league field and festival village, for which negotiations with a contractor are currently in process.
De Jongh said on Monday, “The measure provides the government the flexibility to pledge either Matching Fund Revenues or Gross Receipts Taxes to secure such financing, with the Community Facilities Trust Fund being applied, as security for repayment of any Matching Fund Revenue Bonds issued, or as an offset to the General Fund in an amount equal to the debt service allocable to the Paul E. Joseph Stadium Project and/or the Mars Hill Project, if Gross Receipts Taxes Bonds are issued.”