The V.I. Water and Power Authority voted to reinstate its water system capital projects’ line of credit, increasing it from its previous cap of $750,000 to a new limit of $2 million, at a special meeting of the WAPA governing board Wednesday.
"It’s a timing matter," said WAPA Executive Director Hugo Hodge Jr. "Our capital line of credit is about to expire. This will reestablish it with additional credit availability," he said.
The line of credit is to take care of unforeseen repairs and emergencies in the short run, as opposed to long-term bond debt for capital projects.
Several board members, including Gerald Groner, asked about the status of the old line of credit and what the increase means.
"We have a zero balance" on the line of credit, said WAPA Chief Financial Officer Julio Rhymer. "We have not used the line of credit in awhile," Hodge said. "The full amount is available. This just makes a larger amount available.”
Rhymer said it is “not to address repairs or anything negative. We are just going to have more resources," he said.
"So it is to get through rough spots with cash flow?” Groner asked.
"Correct," Hodge said.
The board voted to reinstate the water system capital line of credit with First Bank, with a cap of $2 million. The line has a tax exemption and the interest rate is set at the 90-day LIBOR rate plus 1.5 percent, with a floor rate of 4.25 percent.
Voting yea on the motion were Groner, Donald Francois, Cheryl Boynes-Jackson, Juanita Young, Noel Loftus and Licensing and Consumer Affairs Commissioner Wayne Biggs. There was no opposition. Elizabeth Armstrong, Planning and Natural Resources Commissioner Alicia Barnes and Energy Office Director Karl Knight were absent.
After addressing the line of credit, the board moved in to executive session to discuss a "legal matter." Afterwards the board reported out that it discussed the matter and took no action in executive session. It then adjourned.
