Aug. 24, 2001 – The V.I. government will pay about $2.9 million more in principal and interest on its outstanding bonds in Fiscal Year 2001 than it did in FY 2000, according to Amadeo Francis, director of the Public Finance Authority.
Francis told the Senate Finance Committee Thursday that interest paid on the bonds was $47.1 million in FY 2000, with payments of principals amounting to $15.9 million. Payments of principal and interest during FY 2001 will amount to $65.9 million, he said.
As of Sept. 30, 2000, the end of the last fiscal year, Francis said, the PFA had a total of $819,985,000 in V.I. government bonds outstanding on the municipal bond market. The figure includes the $300 million bond issue of 1999, the proceeds of which were used for income-tax refunds, overdue payments to vendors and an early retirement incentive plan for government employees, bailing the government out of a fiscal crisis at the time, he said.
The authority disbursed about $43.7 million in FY 2000 to the V.I. government and its vendors for capital projects, another $17.7 million during the first six months of FY 2001, and $10 million more in the last four months, Francis said.
Major PFA-funded projects include:
On St. Croix: the Golden Grove Prison expansion, the Christiansted boardwalk, the Mon Bijou flood control project, the Henry E. Rohlsen Airport expansion and the Government House renovation. Francis noted that the contractor for the Government House work has filed a claim for an additional $1.7 million but said he believes the claim has no merit.
On St. Thomas: construction of the new Lockhart and Peace Corps Elementary Schools, which Francis said will be ready for the opening of school next week; the Savan and Turpentine Run gut flood control projects, for which all the funds have not been drawn down; and a mental health facility next to the Eldra Schulterbrandt facility on the East End of St. Thomas, for which the $1.2 million funding has not been drawn down. Francis expressed disappointment at agencies not acting on their available funding.
He construction work is behind schedule and over budget on the new Bertha C. Boschulte Middle School. There project has two phases, he said: One phase, which had a Feb. 28, 2001, completion date, still is not done, he said, and is "woefully behind schedule and over budget." The other project, inititially slated to be finished by Nov. 7, 2000, also is not ready.
Initially forecast to cost $20.5 million, the school now is projected to exceed $28 million and isn't expected to be completed until late in FY 2002, Francis said. He said the additional costs were incurred because of changes added to the initial project.
At a press conference Thursday, Edication Commissioner Ruby Simmonds said the new BCB is expected to be completed by December. She said some classes would continue to meet until then in the temporary modular units provided by the Federal Emergency Management Agency in the aftermath of Hurricane Marilyn, which severely damaged the old school in 1995.
Francis cautioned the lawmakers of a potential threat to the territory's Molasses Subsidy Fund, which stabilizes the cost of processing molasses by Virgin Islands Rum Industries Ltd. to ensure competitive prices for V.I. produced rum.
He read a report from the PFA's auditors which said in part: "Given the economic situation of the V.I. government, it is uncertain that such subsidy will continue in the future." If the subsidy should be discontinued, the report said, "The rum producer could experience a decrease in its operations," which in turn could mean a reduction of federal excise taxes returned to the territory.
Francis stressed that the revenue stream collected from the returned rum taxes is of "critical importance to the health and welfare of the V.I." He said the molasses subsidy and rum promotion need be appropriated each year, especially in light of new competition from rum producers from elsewhere in the Caribbean and in other countries entering the U.S. market.


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