The Virgin Islands Port Authority Board approved a few financial items on Wednesday during their monthly board meeting, including raising the bonding limit from $100 million to $500 million.
Port Authority Director Carlton Dowe addressed the board about the need to raise the bond limit.
“From the inception of the authority, way back when, we’re talking about 20-odd, 30 years ago, there was a bonding ceiling that was set. So what we’re asking for is the authorization. I want to be abundantly clear, not saying we have any intent to borrow to that extent, but just the authorization,” said Dowe.
According to Catherine Hendry, legal counsel for the Port Authority, who referenced Section 551 of Title 29 of Chapter 10 in the Virgin Islands Code, the $100 million limit was set in 1988. Prior to that, it was $65 million.
“VIPA is now on the precipice of the next generation infrastructure development. In order for VIPA to continue that growth and prepare our marine infrastructure, VIPA will need to go to the bond market and acquire funds to repair and modernize our facilities,” said Hendry. “Keep in mind that there are very few grants available to fund marine facilities.”
She added that the authority currently has an outstanding bond obligation of approximately $23 million with a remaining capacity of $77 million.
“I believe the capital needs will exceed the available bond capacity of $77 million,” she said.
While all members present approved the increase, prior to voting, member Joseph Boschulte inquired about the need for such a significant increase.
“Why the need to go five times what the existing amount is,” questioned Boschulte. He inquired if there are $400 million worth of projects “ready to go.”
Hendry replied, “We feel based on what’s to come, that the 500 million is adequate. It’s not to say we will reach that capacity. To have up to $500 million is a practical number.”
Dowe clarified that “We only could borrow based on what we can afford to repay. We’re just asking for the authorization to set that ceiling.”
Additionally, the board unanimously approved lease agreements for Alpha Risk Management Inc. and AON Risk Services. Alpha Risk Management will provide assistance and services for the management, coordination of risk management resources, oversight of claims preparation, and substantiation, and documentation for the VIPA Hurricane Losses.
“They have played an integral role in the aftermath of hurricanes Irma and Maria, along with our broker AON and its Rapid Response Team, in obtaining a $114 million insurance settlement with our various underwriters,” said Anise Hodge, deputy executive director.
The board approved a three-year agreement, with annual fees increasing yearly, beginning at $83,400 in 2025 and increasing to $86,400 in 2026 and $88,400 in 2027.
The board also approved the renewal of a contract with insurance broker AON Risk Services for three years, expiring on June 30, 2027.
“The fee of $239,223 is for the period commencing June 30, 2024, and ending June 30, 2025, to be billed in quarterly installments,” said Hodge. “The parties hereby agree that compensation will be negotiated and mutually agreed for the periods ending June 30, 2026 and ending June 30, 2027.”
Board members Joseph Boschulte, Leona Smith, Derek Gabriel, Willard John, Gordon Rhea, and Kevin Rodriguez were present.
