ST. THOMAS — While gubernatorial candidate Warren Mosler has been a public figure in the territory, his running mate Ray Fonseca is a bit of a political unknown.
Fonseca, who grew up in the Savan section of Charlotte Amalie but attended Ivanna Eudora Kean High School on St. Thomas’ East End, brands himself as part of a history of influential politicians with roots in the neighborhood.
He retired from government service — he’s a Tier 1 pensioner with the Government Employees’ Retirement System — from the Health Department after reaching the executive director level of the Virgin Islands Housing Authority.
“I’m what you call a Savanero,” he said. “There’s a long line of governors that consider themselves Savaneros.”
Fonseca has worked as a contractor in the wake of the brutal 2017 hurricane season, and has repaired houses on St. Thomas, St. Croix and Puerto Rico following the storms. At one point during an interview at The Daily News, he interrupted himself to sketch out something he was talking about on a piece of paper.
“I’m one of those guys who was a straight-A student,” he said.
The territory is currently underserved by banks from the United States, Fonseca said. Banks like JP Morgan Chase and Bank of America don’t have a presence here, in part because the bankers have been told — by the federal government — that the territory is too risky a lending environment to guarantee profits, Fonseca said.
Fonseca said one of his first actions would be to seek out federal allies to recommend the territory as a positive lending environment.
“Basically, we believe it needs to be challenged,” he said. “We are under the Interior Department, and the Secretary of the Interior has common interest with the Virgin Islands. If we do well, he looks good, that’s what we want.”
The Interior Department could in turn exert pressure on the Federal Deposit Insurance Corporation to influence the banks, Fonseca said.
“The FDIC has to say, ‘Hey listen, you can’t redline the V.I., they’re a U.S. territory,’” he said.
“Redlining” is the practice of systematically denying services to a certain area.
The British Virgin Islands has lower mortgage rates than the U.S. Virgin Islands, Fonseca said.
Fonseca said he wants to use government funds to back insurance policies in the Virgin Islands through the mechanism of reinsurance.
Reinsurance is the practice of taking out insurance policies on insurance policies, essentially vouchsafing the payment of the policy in the event of a disaster.
The practice would allow for faster payments, as well as offer greater transparency and a bellwether for consumers, Fonseca said.
“If you’re an insurance company writing policies in the Virgin Islands, we want the government to have a general policy where we would insure you in case of, you know disaster, so you would be reinsured, and of course that would be published,” he said. “So if you’re shopping around and you’re buying insurance, you can say, ‘He’s not on the list that’s reinsured,’ so we think that would help.”
The same disparities in mortgage interest rates are reflected in insurance rates, Fonseca said.
“We got to look into why our rates here are higher than the BVI,” he said. “The insurance companies need to be caught up on that.”
In general, the public could be better educated about how the claims process works, Fonseca said.
For example, professional estimates of storm damage should always be obtained, Fonseca said.
“The public needs to be educated,” he said. “The lieutenant governor after the storm needed to let the government employees know that the government position is to get a professional to do your assessment and your estimate.”
A professional damage assessment can be the difference between a $5,000 payout for a claim and a $30,000 payout for a claim, Fonseca said.
While Fonseca largely kept to solutions furnished in greater detail by his running mate, he offered an additional proposal for the retirement system Mosler had not immediately covered.
“We want to create a Tier 3, where we would allow private sector employees to voluntarily pay into the GERS,” he said.
Tier 1 employees — like Fonseca — paid 11 percent of their paycheck and after 30 years of government service earned 75 percent of their salary. Most Tier 1 employees have already retired, though a few remain in government service, Fonseca said.
Tier 2 employees pay 11.5 percent, but receive the same 75 percent after 30 years, Fonseca said.
The ticket’s envisioned Tier 3 system would pay 12 percent and after 30 years would receive 65 percent, Fonseca said.
“So they’ll pay a little more and they’ll get a little less,” he said. “However, there will be thousands of people opting in.”
Demand for a pension plan was especially high among retailers and hospitality sector workers, who might not receive a pension through their private employers, Fonseca said. The increase would divide the cost of existing pensions among a much larger number of future pensioners paying in, he said.
“That’s what the GERS need, an influx of cash paying so that the payees are more than the retirees,” he said.
In addition, the costlier Tier 1 employees will eventually age out of the system, Fonseca said.
Fonseca said he knows firsthand the absurdities of working from the government’s Geospatial Information System from his contracting work.
“Just the other day I was down here doing restoration work,” he said. “They pulled up the GIS thing, and I was laughing. ... The system needs to be updated.”
One way to attack the problem is to bolster hiring in the Lieutenant Governor’s Office, Fonseca said. In some cases it’s as simple as updating the aerial photography, he said. On the other hand, the territory’s physical address system needs to be standardized.
“We have the Danish system and we got the remainder and then we subdivide the lot,” he said. “That one there we’ll have to work on. I think we’ll need to get an assessment, which would be a big, big task.”
That, too, will require public outreach, Fonseca said.
“It would involve some folks changing the deeds around and people think you gonna charge them a fee,” he said. “It will need some public education.”
Fonseca said technology is a way to increase public accessibility to both services and public information.
“We support the public’s right to all information, unless it’s something like a police investigation or something like that, that has to be kept confidential,” he said. “That’s one of the core issues. We believe in accountability.”
In addition to accessibility, technology could allow businesses to get their licensing faster, Fonseca said.
“It’s a lot of manual stuff that’s going on there that needs to be updated and much more efficient,” he said. “People are still physically opening the deed book that goes back to the 18th century. We need to be business friendly.”
What else …
Fonseca said his ticket envisions opening up the government health care plan to the public, in addition to the public pension. Currently, the plan is limited to government employees only, with about 17,000 insured, Fonseca said.
“We’re gonna let the private sector employees voluntarily pay into that system for the insurance,” he said. “What it will do is grow the pool to 35,000.”
More participants would spread the cost among a larger pool of insured, Fonseca said. That would have two potential benefits, according to Fonseca: a larger pool could potentially attract new insurers to drive prices down; and insurance rates could go down because of the increased number of plan recipients.
“Claims will go up, but the benefits will be less because now you have a larger pool of folks,” he said. “Insurance rates are driven largely by the amount of people in your plan.”
Fonseca also offered a suggested change to building codes he said could potentially save millions. In his work as a contractor, he’s come across heavily constructed hatches blocked from the roof by heavy timbers. The hatch’s function was initially mysterious, but Fonseca said it might offer a clue to how previous generations dealt with hurricanes.
“It’s for the hurricanes,” he said. “What a hurricane is is real low pressure,” he said.
Low pressure causes the hatch to open, which equalizes the pressure between the inside and outside of the house, preventing the roof from lifting off the building, Fonseca said.
“We could save millions of dollars,” he said.