With a U.S. District Court case still pending that claims St. John real property valuations are flawed, the St. John-based Unity Day Group is mounting a grass roots effort concerning the local government’s loan of $40 million from Banco Popular. The loan is secured using anticipated property tax revenues.
“We are asking residents to contact Banco Popular to voice their objections,” said Lorelei Monsanto, who serves as the Unity Day Group’s president.
Monsanto wondered how Banco Popular could make a loan when any anticipated property tax revenues are in dispute because the court case hasn’t been resolved.
She said the suit, filed in December 2014, is scheduled for a hearing this December.
According to Monsanto, the suit calls for a revaluation of St. John real property so that properties have realistic values. Residents have said that St. John property valuations are too high.
“Residents of St. John want to pay property taxes but we want them to be fair and equitable,” she said.
Should the Unity Day Group be successful in its suit to have real property reassessed, the group expects that property values on St. John will drop. Therefore property tax revenues will also go down.
St. John resident Bruce Long was one of those who wrote Banco Popular. He said St. John property valuations are disproportionate compared to the other islands.
“It’s irresponsible for the V.I. government to request a loan based on tax increases which are in dispute,” Long said.
And he said it was irresponsible for Banco Popular to make a loan when the property taxes are in dispute.
St. John resident Susan De Bonis also wrote to Banco Popular. She said she told the bank that both of her properties are overvalued based on incredibly inaccurate measurements of the structures.
“That is in addition to the inaccurate assessments on St John islandwide,” she wrote.
Monsanto questioned Banco Popular’s business practices, noting that the bank would not make a loan to a business or resident based on anticipated revenues like they did with the V.I. government.
Banco Popular President Ignacio Alvarez was out of the office Thursday. The bank promised a statement but it did not arrive by 8 p.m.
The local government announced Sept. 28 that it had closed on a loan to borrow $40 million from Banco Popular. V.I. Public Finance Authority Executive Director Valdamier Collens said then that the funds will be used for working capital purposes and to cover the projected shortfalls in revenue collection during fiscal year 2015.
The borrowing was done under the authority of a new law allowing the government borrow up to $40 million in each fiscal year, secured by anticipated tax revenues, to smooth out cash flow problems.
