CHARLOTTE AMALIE — The outlook for the U.S. Virgin Islands is healthy, reported Gov. Kenneth Mapp, in his fourth State of the Territory Address at the Earle B. Ottley Legislative Chambers on St. Thomas, Monday evening.
Mapp, who has been chief executive through back-to-back Category 5 hurricanes in September, said that while he was sad over the loss of life and devastation from the storms, he was both joyful and optimistic about crossing the “watershed of opportunities for a future filled with great promise.”
“The State of our Territory is good, it is hopeful; but the demands and burdens on our shoulders are heavy. If we do our work and make the right decisions, the prognosis for our future is bright,” Mapp said. He added, “We are stronger, because we are closer to our faith, and stronger because our national government and our nation can see we are a resilient people – competent, responsible, and making our case that American citizens living in the Virgin Islands must be treated as American citizens living anywhere.”
The Governor recalled that his Administration had faced daunting challenges upon assuming office, but has overcome despite numerous hurdles over the past three years. These ranged from unfunded labor agreements and the low morale of public sector workers to a contraction in essential personnel. Even so, during the Administration’s second year, the U.S. Department of Commerce reported that in 2015, the Virgin Islands economy had finally resumed growth, while government spending was down for the first time in a decade.
“At times, we struggled against the self-interest of a few to achieve what was best for the greatest number of people in our community. We persevered and prevailed without late payrolls, missed payrolls or sending workers home,” the Governor recalled.
“During our most difficult challenges, we found friends and allies in this Body to come together to make progress for our community. We found friends in the private sector who invested in our economy. We entered into public/private sector partnerships that solved old disputes and provided us with funding, new private sector jobs, new investments, including growing opportunities for our people. We worked as a team and increased the minimum wage for private sector employees.”
“We paid the unfunded public-sector labor agreements we were handed in 2015. We expanded the Medicaid Program and provided coverage for an additional 19,000 Virgin Islanders. We reopened our Senior Citizens’ Centers and expanded programs under the Department of Human Services, such as the Title IV Grant program for children. We hired over 1,800 new government employees since January 2015. We sent our youngest Police Officers to the New York City Police Academy, where they graduated after six months of intensive training with 36 matriculated college credits, and a larger salary as a reward. We sent 33 school principals and assistant principals for leadership and (school-based) management training to Harvard’s Graduate School of Education. We established personal relationships with the CEOs and leadership teams of our airlines and cruise line partners. We accomplished these things, and more, because two branches of government found common ground to work together to move the best interest of our Territory forward,” he explained.
Mapp noted that the successful outcomes of his team’s leadership included the settlement of old business with the Hess Corporation and HOVENSA. “Our settlement resulted in a storage terminal facility, now employing over 650 Virgin Islanders; the Government’s treasury received over $250 million in direct payments, took ownership of 120 homes, a technical school, and more than 330 acres of land. Today, those homes produce over $2.3 million a year in income.”
For the three years of the administration, the government has also been aggressively addressing both short-term liquidity and long-term financial concerns by increasing collections, cutting spending, spurring economic growth and creating new revenue streams. Limetree Bay Terminals, for example, has now invested more than $200 million and has filed permit applications to expand the storage terminal facility by another 15 million barrels, and plans to invest over $125 million in the Krause Lagoon channel to accommodate the larger two-million-barrel fuel tankers.
The administration also launched a determined effort to collect $126.3 million in delinquent taxes in the last three years in addition to the collection of delinquent property taxes, which brought in an additional $23 million in 2017. Scheduled property tax auctions were canceled because owners stepped up to the plate and resolved the delinquent taxes owed.
The Governor admitted that it was a persistent challenge to keep up with the distribution of income tax refunds, which is tied directly tied to cash flow. In spite of this, the Mapp-Potter Administration, without borrowing a penny, laying off a worker or cutting a salary, has paid over $142 million in such refunds since taking office in 2015. “I am pleased to announce that I have authorized the Director of the Bureau of Internal Revenue and the Commissioner of the Department of Finance to begin distributing tax refunds twice monthly going forward. This mandate began (on) Friday, January 19 and will continue as long as we can stay the course or until we become current in the distribution and payment of tax refunds,” the Governor announced.
In a reassuring message to bondholders and the financial markets, Governor Mapp reminded Wall Street that in 37 years, the Virgin Islands has never paid late nor missed a single payment on its bonded indebtedness of over $2 billion dollars in debt: “Given the opportunities provided by Hurricanes Irma and Maria, I can say to the bondholders and to the financial markets tonight with absolute confidence: We won’t be breaking this record.”
He assured bondholders that their investments in Virgin Islands’ securities are safe, secure, and valuable. “Both of our rum producers are operating and shipping rum products to the U.S. mainland. Our Gross Receipts Revenue Bonds are more secure and valuable (despite) the devastation caused by two Category 5 hurricanes. Consumer buying power, consumption, construction, and employment will remain robust for the foreseeable future as we rebuild our lives and businesses as well as repair and construct numerous public facilities throughout the territory.
Meanwhile, Mapp called on the the 32nd Legislature, the Executive branch and the community to focus on pension securities for retirees and announced that his team is looking for good, qualified persons to join the GERS Board of Directors. “I am looking for financial acumen to help lead us in taking corrective action, and moving us away from bad investments, away from bad decisions where the System will not even lend money to its own members. I am looking forward to the analysis from Capital Markets Advisors LLC whom we have commissioned to look at similarly situated public pension programs that have been able to achieve greater solvency … collapse of the GERS is not, and cannot be, an option.”
Mapp said that he feels the opportunities that lie before Virgin Islanders can transform the territory into a powerful beacon of light in the Caribbean. “Our future is filled with stronger homes and businesses; stronger, smarter and more resilient schools, hospitals, energy infrastructure, roads, and ports; stronger with more of our people being employed, going into business; stronger, because each resident has had an opportunity to see their elected leaders perform under trying circumstances.”
During the address, he highlighted storm recovery progress, including the fact that children are back in their classrooms and they are learning; 96 percent of Virgin Islands Water and Power Authority’s (WAPA) eligible customers (50,025) have power; 7,000 existing street light fixtures across the territory have been repaired and re-energized; and 1,680 new street lights have been installed and restored to electricity.
He thanked the heroic efforts of 51 hardworking WAPA line and transmission workers, more than 60 local private contractors, and nearly 850 off-island linemen, while reporting that more than 750,000 cubic yards of plant debris had been collected for transport out of the territory.
Addressing airlift to the Territory, the Government has helped to restore 13,000 of the 26,000 weekly airline seats that were coming into the Territory before the hurricanes. The destination has now hosted more than 305,000 cruise ship passengers since ships began their return. “We are working daily with the airlines, cruise lines and the Virgin Islands Port Authority to restore additional flights and additional berths into our islands,” he assured.
In radio advertisements timed to run just before Mapp’s State of the Territory address, gubernatorial candidate Warren Mosler urged the governor to “secure” non-stop flights between New York and St. Croix “in advance of the next tourist season” as it would “generate tens of millions of dollars in revenues just like they did before Hurricane Hugo hit in 1989.”
The governor highlighted the new “Still Nice” tourism campaign and the new 150-day marketing plan developed by the Department of Tourism to help the world know that the U.S. Virgin Islands is open for business. “The storms have afforded us another great opportunity to rebuild, rebrand and refresh our tourism product – so we can once again establish ourselves as a leading visitor destination in the Caribbean,” he said.
Mapp reported he has authorized $6 million for the construction of two new facilities – one on St. Croix, one on St. Thomas – for the Bureau of Motor Vehicles (BMV), which was severely impacted by the hurricanes.
Mapp also revealed that the Federal Emergency Management Agency (FEMA) has approved an initial budget of $600 million to fund the Sheltering and Temporary Essential Power (STEP) program to provide roofs for approximately 12,000 homes throughout the Territory. This program is expected to generate, at a minimum, another 2,500 jobs throughout the islands while placing permanent roofs on the homes of Virgin Islanders. Homes that did not qualify for FEMA’s Blue Roof program may be the first eligible for assistance under the STEP program.
To rebuild the territory, Mapp has asked the Federal government for a total of $7.5 billion to fund repairs to homes, schools, hospitals, government facilities, the energy grid, roads, docks, ports, and telecommunications infrastructure. “To help us manage these changing priorities, we have retained two of the country’s leading disaster relief consulting firms: Witt O’Brien’s and Ernst & Young. These two firms are assisting the Government of the Virgin Islands with identifying, expediting, maximizing, tracking, and documenting federal disaster relief and funding,” he reported.
Mapp said that moving forward there will be a strong focus on resilience and modernization, and the public will be invited to share feedback and suggestions at town hall meetings to be held in various communities.
Thanking many people for their staunch commitment to the islands’ recovery, including Cabinet members, members of the Legislature, heads of agencies, local administrators, members of Congress, present and former U.S. and international government leaders, the National Guard, first responders, nonprofit organizations, as well as the local business community, the Governor took a moment to express his particular gratitude toward native son and basketball legend Tim Duncan, who helped mobilize $3 million in donated supplies. “Tim Duncan not only gave of his his time and his money, he also manned distribution centers on St. Thomas and St. Croix, giving aid, comfort, love and smiles to his fellow Virgin Islanders. Tim Duncan, you did what you always do! Being a great human being, with a big heart. You set a fine and wonderful example for others to follow. We are proud of you and say, thank you, thank you, thank you again. God bless you!”
The governor acknowledged: “We owe a debt of gratitude to the people and organizations around the world who have mobilized to help us, not least of which is our federal partners, led by President Donald J. Trump. No response will ever be perfect, however, no country in this world responds better and more effectively to its citizens at times of disasters than our country, the United States of America.”
Mapp said the “resiliency and grace” of the U.S. Virgin Islands community was an inspiration to him. “I applaud each of you for your preparation, your bravery, your generosity, your patience, and your strength. With few exceptions, the people of the U.S. Virgin Islands have risen to meet every challenge. We are moving forward on the road to recovery, but the road ahead is long and arduous. Yes, today is better than yesterday, and tomorrow will be better than today. So, let us persevere!”
He stated, “I have never been more proud to be a Virgin Islander and never more honored to serve as your Governor.”
Mapp’s full address can be read here.
GLADHANDER IN CHIEF: Gov. Kenneth Mapp stretches out his hand to press the flesh of Senators standing around the dias before the speech. To Mapp’s right, Sen. Nereida Rivera-O’Reilly of St. Croix. (photo courtesy: GOVERNMENT HOUSE)