Governor Albert Bryan Jr. has submitted legislation proposing $85 million for the territory’s hospitals, $40 million for the V.I. Water and Power Authority and a combined $30 million for income tax refunds and retroactive wages as part of a $250 million bond-financing package. Bryan sent the transmittal letter to Senate President Milton Potter on Friday. The proposal requires approval by the 36th Legislature before the financing can proceed.
The hospital allocation would provide $45 million to Schneider Regional Medical Center on St. Thomas and $40 million to the Governor Juan F. Luis Hospital and Medical Center on St. Croix. Another $40 million would go to the V.I. Waste Management Authority, bringing the proposed assistance for the hospitals and the two authorities to $165 million.
Bryan’s transmittal letter also identifies $30 million for repayment of the government’s FirstBank line of credit and $10 million for outstanding government vendor payments. The remaining $15 million would be divided equally among legislative branch capital funding, judicial branch capital funding and the Virgin Islands Economic Development Authority, with $5 million allocated to each.
The letter provides financing terms and itemized allocations for the proposal the Consortium reported on October 19. Neither the letter nor Friday’s release specifies how the combined $30 million for tax refunds and retroactive wages would be divided between those obligations or when payments would reach recipients.
Government House said the assistance is intended to address longstanding financial pressures while strengthening the institutions’ ability to maintain essential services. The administration cited the hospitals’ annual burden of tens of millions of dollars in uncompensated care, along with WAPA’s costs of maintaining electricity and water systems, meeting outstanding obligations and investing in service reliability.
“These are obligations and financial pressures that already exist, and continuing to carry them without a comprehensive solution has a cost of its own,” Bryan said. “Our goal isn't just to meet the immediate financial need. It's to make an investment today that puts these institutions in a stronger position tomorrow, with the resources and accountability they need to serve our people effectively.”
According to the transmittal letter, the V.I. Public Finance Authority, or a subsidiary or affiliated corporation, would issue the bonds, with repayment backed by gross receipts tax revenues. The proposed bonds could run for no more than 25 years, with interest capped at 8 percent for tax-exempt bonds and 10 percent for taxable bonds.
The $250 million represents the listed project allocations, rather than necessarily the full amount of borrowing. The letter says bond proceeds could also cover reserves, issuance costs, capitalized interest, credit enhancement and, at the authority’s discretion, refinancing outstanding gross receipts tax obligations. The proposal would leave intact an existing requirement to set aside the first $250,000 in gross receipts tax collections each fiscal year for the Moderate Income Housing Fund, which supports moderate-income housing projects.
The financial assistance would come with conditions for the Government Health and Hospital Facilities Corporation, WAPA and the Waste Management Authority. Each would have to submit a five-year financial sustainability plan, a workforce plan and targets for reducing reliance on government subsidies, according to the letter.
The institutions would also be required to bring all delinquent audits current within 24 months, publish financial statements and quarterly reports, and certify compliance annually. Their plans, reports and certifications would be submitted to the Office of Management and Budget, the Public Finance Authority and the Legislature, which would serve as oversight entities.
An institution that falls out of compliance would have 60 days to correct the deficiency or submit a corrective action plan. Continued noncompliance could lead to independent monitoring, loss of eligibility for additional government financial assistance, required restructuring or withholding of discretionary subsidies. The letter specifies that such noncompliance would not affect the validity of the bonds or their security.
The proposal was developed through the Financial Solutions Task Force Bryan established in July. Government House identified its participants as OMB Director Julio Rhymer; Sens. Novelle E. Francis Jr., Marvin Blyden and Avery Lewis; Finance Commissioner Kevin McCurdy; PFA Executive Director Nathan Simmonds; and Personnel Director Cindy Richardson.
