State of the Territory: Mapp Defines Scope of the Recovery

Gov. Kenneth Mapp presents his fourth 'state of the territory' speech Monday. (James Gardner photo)
Gov. Kenneth Mapp presents his fourth ‘state of the territory’ speech Monday. (James Gardner photo)

In his fourth “state of the territory” address Monday night, Gov. Kenneth Mapp relayed a long list of projects to be undertaken towards the Virgin Islands’ recovery, projects that will require billions of dollars in federal aid and include replacing all the territory’s major health care facilities, building six new schools, and demolishing and rebuilding entire public housing communities.

Mapp did not indicate in his speech what actions the V.I. government will take to make up for a projected loss of $1.5 billion over the next three years as a result of Hurricanes Irma and Maria, an amount larger than the federal loans so far approved to keep critical services running. For Fiscal Year 2018, the territory is facing a projected budget shortfall of at least $200 million beyond the gaps filled by community disaster loans approved by Congress.

Mapp said that 138 days after the first of two category five hurricanes pummeled the Virgin Islands, the state of the territory is “good and hopeful” but with “heavy burdens” to carry.

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More than 50,000 eligible customers of the V.I. Water and Power Authority – 96 percent – have had their power restored since the storms, Mapp said, while about half of the weekly airline seats to the territory available before the storms are being offered once again. More than 300,000 cruise line guests have visited the Virgin Islands since October.

Mapp used the word “opportunity” several times while describing the work to be completed after 2017’s remarkable hurricane season, and the challenges that will confront the islands in the coming years.

“The opportunities which lay before us, if we are prepared to do the hard work, can transform us into a powerful beacon of light in the Caribbean,” Mapp said.

Approximately $516 million in federal disaster relief has already been expended in the V.I. through the Federal Emergency Management Agency. That amount does not include the $371 million made available to the territory through community disaster loans approved to keep the local government operational. So far, $250 million has been approved for the central government, $75 million for the V.I. Water and Power Authority, and $46 million for the territory’s hospitals. These loans, Mapp stressed, are to make up for revenues lost due to the hurricanes, not to fund new initiatives. Borrowing from other sources is not a possibility since the territory was shut out of credit markets in 2017.

Repairing the territory’s mangled and battered infrastructure will have a higher price tag than keeping the government running at the austerity levels already planned for FY 2018 before the storms. $7.5 billion is the total amount that Mapp has requested from the federal government to assist in the territory’s complete recovery over the course of several years.

Mapp listed the price of complete repair of WAPA’s infrastructure alone at $1.2 billion.

Mapp has requested $860 million to rebuild the territory’s public school system, which lost 11 schools. Mapp wants to replace those losses with six new schools, three on St. Croix, two on St. Thomas, and one on St. John.

Another $800 million is being requested to replace the Governor Juan F. Luis Hospital, the Schneider Regional Medical Center, the Myrah Keating Smith Community Health Center, and the Department of Health facilities at the Charles Harwood Hospital with new facilities. Mapp said the new hospitals and clinic will be smaller than the ones destroyed in the storms, which he characterized as too large for the territory’s needs.

“We have demonstrated to the U.S. Congress and to FEMA that we want smaller, smarter and stronger healthcare facilities going forward,” Mapp said. “Both the Luis and Schneider hospitals have had extensive hurricane repairs in the past, already costing the U.S. Government more than they initially provided to build these facilities.”

Public housing communities to be rebuilt include Ludvig Harrigan, Nicascio Nico, and John F. Kennedy communities on St. Croix, and the Tutu High-Rise community and the Lucinda Millin facility on St. Thomas.

Mapp said Monday the 750,000 cubic yards of vegetative debris collected in the territory, which prompted a debate about the merits and risks of burning versus composting in the aftermath of the storms, will be removed from the territory via barges if his request is met by FEMA.

With post-hurricane recovery the dominant theme of Mapp’s address, some issues that had been central to his previous state of the territory speeches, and which remain pressing, were little mentioned Monday night. Among these issues was the looming insolvency and more than $3 billion unfunded liability of the Government Employee Retirement System, which Mapp pledged in 2016 to take decisive and comprehensive action on.

Although Mapp said Monday that the collapse of the system “is not, and cannot be an option” he mentioned no policy shifts other than to add new members to the GERS board and implement unspecified strategies recommended by an advisory firm commissioned to study similarly struggling pension programs.

A five-year fiscal plan to reduce the V.I.’s structural deficit that was touted by Mapp during 2017’s state of the territory address likewise received little attention Monday, although Mapp suggested it was likely made infeasible by new post-hurricane realities.

“I have asked our financial team to update the five-year plan, given our current challenges and new opportunities,” Mapp said. “Our original plan, if fully implemented, would have eliminated the structural deficit by 2021. I want to stay the course to fiscal stability, but modifications are necessary given our changing priorities and increased opportunities.”

Finance Commissioner Valdamier Collens told senators last year that the administration’s five-year plan would have likely brought the annual deficit of the V.I. government down from $170 million to approximately $56 million, rather than erasing it entirely, after five years.

Mapp’s 2018 state of the territory is the final one of his current term as governor. He has indicated that he will seek a second term.

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