June 18, 2001 – The administration has completed its application to the Federal Emergency Management Agency to have over $161 million in principal and interest owed on a Hurricane Marilyn disaster loan forgiven, Gov. Charles W. Turnbull said Monday.
"We have filed the necessary paperwork to begin the process to cancel the outstanding balance on the Hurricane Marilyn Community Disaster Loan," the governor announced at his press conference. "This process will take several months, if not longer."
According to records of FEMA – which had threatened to cut off aid to the territory because of its failure to repay previous loans – the Virgin Islands has repaid $7.4 million of the money owed from Marilyn. Including the accumulated interest, it should be paying off the balance to the tune of just over $9 million per year.
One of the application requirements for canceling the Marilyn loan is the submission of the official financial statements of the territory for the three fiscal years after the year of the disaster, Carol Hector-Harris, a regional FEMA officer, said.
FEMA and other federal officials have expressed their dissatisfaction with the financial reports prepared by the government, questioning the accuracy of the fiscal year accountings of the government's finances. According to one FEMA document, "It is questionable whether the financial statements being prepared are the 'official' financial statements of the territory" for fiscal years 1996 through 1998.
Turnbull's announcement that the territory has asked for forgiveness of the Marilyn loan comes five days after the Appropriations Committee of the U.S. House of Representatives approved $3.5 million to cover the costs in canceling an outstanding balance of $46 million the territory still owes on a similar loan received after Hurricane Hugo ravaged the islands in 1989.
If the Senate Appropriations Committee concurs in that action, the Virgin Islands could have to repay as little as $1 million to wipe out the Hugo loan, Turnbull has said.
At his press conference Monday at Government House on St. Thomas, the governor said the congressional action last Wednesday was "unprecedented." If the Hugo debt is thus reduced, he said, it would the first time any territory or state has managed to have a loan from FEMA forgiven.
"This action is unprecedented in the annals of Congress. It has never been done," he said."
