ST. THOMAS- Members of the 34th Legislature, led by Senate President Donna A. Frett-Gregory, met at the Capitol Building and voted favorably for Bill No. 34-0188- An Act amending Title 29 Virgin Islands Code by adding Chapter 24 to authorize the sale of the Matching Fund Receipts and create a new entity named the “Matching Fund Special Purpose Securitization Corporation.”
Invited testifiers were members from the Government Employees’ Retirement System Board (GERS), Virgin Islands Public Finance Authority (VIPFA), Virgin Islands Office of Management and Budget, Virgin Islands Department of Finance, Winston & Strawn LLP, Ramirez & Co., Inc., St. Croix Government Retirees, Inc., Duane Morris LLP, Government Employees United for Fairness, and Squire Patton Boggs (US) LLP.
The measure seeks to (1) acquire during the transfer period all of the Virgin Islands government’s rights, title, and interest in the Matching Fund Receipts to be paid to or for the account of the government by the United States Treasury and the Related Rights; (2) issue Matching Fund Securitization Bonds and the Residual Certificate in order to pay the purchase price; (3) direct the Secretary and the United States Department of Interior to pay the Matching Fund Receipts directly into the Deposit Account; to approve the issuance by the VIPFA or other entity of the GERS Funding Note to the government for deposit as an in-kind contribution to the GERS; and (4) ratify the amendments to the rum company agreements; repealing and replacing Act Nos. 8329 and 8330; and for other related purposes. Senator Kurt Vialet stated that this plan provides annual funding to GERS for the next 30 years. It is substantially different because it provides an annual contribution to GERS and a contract with VIPFA.
Prior to dissolving out of the Legislative Session and into the Committee of the Whole, Senator Frett-Gregory stated that it’s important to ensure that the community understands exactly what we are doing and why. Upon the conclusion of receiving testimony, we will rise back into the Legislative Session and take a vote. She continued, “Today we make history. The Matching Fund Special Purpose Securitization Corporation was vetted in the 33rd Legislature and now we are ready to make a collaborative decision today.” Similarly, Senator Novelle Francis, Jr. stated that the bill will benefit retirees, active employees, and the community.
In support of the measure, VIPFA Director of Finance and Administration Nathan Simmonds noted that Segal, the actuarial firm that annually reports on the financial condition of GERS, reported that by October 2024, the retirement system will no longer have assets. However, Bill No. 34-0188 allows the flexibility to reduce debt service costs earlier on. Furthermore, the measure will accelerate funding for GERS and provide additional monies prior to October 2024.
This includes an estimated $500 million during the next several years when funding for GERS is much needed. David Paul of Fiscal Strategies Group, Inc. and Financial Advisor to VIPFA mentioned that Segal vetted the stabilization plan and concluded that it is a viable strategy to bring GERS from insolvency to solvency. Paul indicated that it finally addresses a challenge that has long plagued the community. Although in favor of the bill, GERS Administrator/CEO Austin Nibbs shared recommendations to strengthen the measure. To maintain enforcement, Nibbs stated that GERS should enter into a consent judgement instead of the suggested settlement agreement. Additionally, Nibbs stated that GERS recommends removing restrictions and limitations on its right to transfer the bond.
Ultimately, the full body rose out of the Committee of the Whole and went into Legislative Session to vote for the measure. The bill passed with 14 yeas and 1 absent.
Senators in attendance: Donna A. Frett-Gregory, Novelle E. Francis, Jr., Genevieve R. Whitaker, Kurt A. Vialet, Franklin D. Johnson, Samuel Carrión, Carla J. Joseph, Javan E. James, Marvin A. Blyden, Alma Francis Heyliger, Dwayne D. DeGraff, Steven D. Payne, Sr., Janelle K. Sarauw, Kenneth L. Gittens, and Milton E. Potter.