Public Finance Authority board members spent a good portion of their Friday meeting finalizing details for a territory-wide broadband initiative that officials said has to be complete and "sustainable," according to federal guidelines, by July 2013.
In March, the board authorized the issuance of up to $20 million in new bonds needed to help finance the project, which is expected to cost more than $100 million. The government has been applying for federal grants to cover most of the costs and has since received five separate awards — $1.7 million of which was announced Friday — allowing for not only the construction of the network, but conducting public awareness campaigns, expanding job skills and setting up computer centers, among other things.
At this point, the government has $106 million for the construction of the fiber optic network, to include $59 million in federal funds, along with $15 million in in-kind contributions from WAPA and the new bond proceeds, which will be used as a federal match.
PFA board members voted Friday to tack another $12 million onto the bond issue, bringing the total up to $32 million, which would: provide $5 million in working capital for the network over the next three to four years; cover $2 million worth of expenses not covered by the federal grants; and help the government acquire and build out its main computer and network operations centers.
Convening in executive session Friday, board members adopted a resolution that might help them acquire, renovate and build out the structure for at least one facility, but the details of the resolution are still not known.
Meanwhile, board members voted to establish a wholly owned subsidiary of the PFA called the V.I. Next Generation Network that would be charged with "implementing and operating the assets on an ongoing basis once the network has been built," PFA head Julito Francis explained Friday. The PFA would be the subsidiary’s sole stockholder, while a group of seven individuals would sit on its board of directors.
Francis said a list of proposed board members has been sent to the governor for review, and explained that the Legislature would have to approve the use of any funds applied by the network toward any project.
Board members also voted to amend the PFA’s contract with Stratum Broadband, bringing the total up to $1.5 million plus expenses, to cover additional services associated with putting together the federal grant applications. The initial contract was $960,000.
Francis was also authorized to issue two requests for proposals (RFPs) for vendors that would design the construction of the network, and provide environmental assessments that would pinpoint any historical or archaeological risks before any cables are laid.
The new fiber optic network will allow the V.I. Public Finance Authority to offer affordable "middle-mile" broadband service on St. Thomas, St. Croix and St. John. "Middle mile" refers to the internet infrastructure that links retail-level Internet providers and telecommunication services to the massive undersea fiber optic trunk cables that carry regional and global data traffic.
An underground fiber ring network will be built on the islands of St. Croix and St. Thomas and an aerial network on the island of St. John. These networks will be connected through existing fiber cables to each other, Puerto Rico and the U.S. mainland through existing submarine fiber cables.
In other news, the board also approved:
- a $200,000 funding request from the V.I. Territorial Emergency Management Agency that would cover the cost of additional tsunami sirens for the territory (the funding source is the PFA’s project and administration fund);
- a $26,000 funding request for the St. Croix American Legion Post 133 that would cover the cost of air conditioners at the organization’s new building in Frederiksted (the funding source is the PFA’s project and administration fund);
- a $7.5 million budget for the PFA (half of which would come from the Internal Revenue Matching Fund while the other half will be taken from the PFA’s project and administration fund), and;
- an $800,000 budget for the Office of Economic Opportunity, established as a division of the FPA to track and manage federal stimulus funds and grants (the budget would be funded by a General Fund contribution included in the miscellaneous section of the fiscal year 2011 budget and about $333,000 in federal State Fiscal Stabilization funds).
The board also decided to appoint a subcommittee tasked with finding a firm to complete full and single audits for the PFA for two years. PFA accountant Janice Hodge told the board Friday that the office could only use two of the four proposals submitted so far, and that the recommended firm — Ernst and Young — carried a high price tag.
Board members present for Friday’s meeting were Finance Commissioner Angel Dawson, Gov. John deJongh Jr., Office of Management and Budget Director Debra Gottlieb, Keith O’Neale Jr. and Pablo O’Neill.