The Public Finance Authority Monday authorized the issuance of $250 million in Grant Anticipation Revenue Vehicle (GARVEE) bonds to finance infrastructure projects. The projects include a St. Croix-to-St. Thomas ferry, upgrades to Veterans Drive on St. Thomas and St. Croix road improvements.
Last week, the 35th Legislature approved the bond issuance. The government plans to use the money from GARVEE bonds to pay for projects and then pay them off when federal grant money is received.
Public Works Commissioner Derek Gabriel told the Senate that the GARVEE bonds would speed up projects, eliminating delays caused by yearly funding allotments.
To facilitate the bond sales, the authority board members also authorized Director of Finance and Administration Nathan Simmonds to engage Duane Morris as legal bond counsel to oversee the issuance of the bonds with an estimated principal amount of $130 million. Duane Morris has more than 900 attorneys in offices across the United States. It has been involved in the territory with refinery issues and power purchase agreements for alternative energy developers.
Gov. Albert Bryan Jr., who chairs the PFA, has said this bond proposal “will probably be this decade’s most significant economic initiative undertaken by the U.S. Virgin Islands.”
In another effort to keep money flowing through the territory’s economy, the board ratified an electronic poll vote taken on Nov. 19 authorizing the authority to negotiate, prepare, and execute a term sheet with FirstBank Puerto Rico in preparation for a line of credit maximized at $150 million. This line of credit provides funding for vendor payments and retroactive wage payments and addresses other critical needs of the territory. It is also to help advance disaster-related recovery projects where federal funding may be slow to arrive in the territory’s coffers.
In the executive session, the board heard from its subsidiary, the Next Generation Network, about a proposed project in the negotiation stage. The board also discussed a health insurance proposal.
Gabriel testified in the Senate that the GARVEE bonds would be used as follows:
- $54 million to refinance existing GARVEE bonds
- $20 million toward the St. Croix-St. Thomas ferry
- $48 million for the next phase of the Veterans Drive project
- $28 million for St. Croix road improvement projects
- $6 million for deposit in a “Debt Service Reserve Fund” and to cover issuance costs.
