In a move that Governor John deJongh, Jr., said would help the U.S. Virgin Islands fund projects already approved by the senate, the Virgin Islands Public Finance Authority (PFA) sold $49.6 million in bonds at the end of August. Among other projects, the funds will provide working capital to territorial hospitals and the general fund, as well as the payment of Water and Power Authority (WAPA) receivables from the Government of the Virgin Islands.
The PFA was established in 1988 by the Legislature of the Virgin Islands as a means of promoting and sustaining economic and social development in the Territory. A public corporation, the PFA exists to help the government in responsibly and effectively carrying out its duties. The Authority is also able to assist private enterprises that its board believes will provide a benefit to residents of the territory, either through increased employment opportunities or through the general betterment of society.
Due to the recent bond sales, a number of long-term problems will be addressed, including:
- The WAPA experienced a net loss of $10 million in 2013 and its government accounts receivable topped $25 million at year’s end, an increase of nearly $7 million in a year’s time.
- Luis Hospital of St. Croix and Schneider Regional Medical Center on St. Thomas have both struggled financially in recent years, and the Government proposes to utilize some funding earmarked for the hospitals to pay their WAPA bills. Luis Hospital owes $9.1 million and Schneider owes $4.3 million.
- The USVI Bureau of Corrections also owes WAPA just under $900,000.
- The USVI government has a current budget shortfall of $27 million.
The Government of the Virgin Islands has already approved some plans and earmarked specific dollar amounts that will go toward improving the financial footing of various institutions:
- The WAPA will receive $12 million as payment for part of the government’s outstanding utility bills. Just over $5 million will be paid for each of the two hospitals, and the other $1.5 million for the Bureau of Corrections.
- Luis Hospital will receive $11 million to meet payroll through September, as well as $1 million to upgrade its medical records.
- Schneider Regional Medical Center will receive $7 million to cover outstanding accounts payable and about $3 million for capital improvements.
- The VI Human Services Department owes the Sea View Nursing Home $1.5 million, which these new funds will cover.
- The remaining $14 million will be set aside with the intention of addressing the government’s budget shortfall.
Governor deJongh acknowledges that the U.S. Virgin Islands faces some economic challenges, but also points out that investor confidence is high and credits the government’s transparency as facilitating this confidence. Hopefully, the recent sale of PFA bonds will help to address key budget shortfalls and financial hurdles throughout the territory.
BoltNagi is an established and well-respected government relations law firm serving clients throughout the U.S. Virgin Islands.