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Charlotte Amalie
Thursday, October 6, 2022
HomeNewsArchivesGOVERNMENT STILL IN HOCK TO WAPA FOR $14 MILLION

GOVERNMENT STILL IN HOCK TO WAPA FOR $14 MILLION

Correction: It was incorrectly reported that the Roy L. Schneider Hospital owed the Water and Power Authority $2.76 million. It is the Juan Luis Hospital that owes that amount.
The matter was clarified Wednesday morning by WAPA's acting Chief Financial Officer Maurice Sebastien. The story has been changed to reflect the corrected information.
Nov. 25, 2003 — The Water and Power Authority’s Governing Board elected a new chairman Tuesday, but discussion frequently turned to the utility’s largest and most delinquent customer – the local government.
According to WAPA's Executive Director Alberto Bruno-Vega, the government currently owes more than $14 million in outstanding water and electric bills despite previous agreements to repay the arrears. According to an internal financial report presented to the board at Tuesday's meeting, the government appears to once again be falling behind.
Although no concrete figures were provided to the media, the agencies falling behind in paying their utility bills include Roy Lester Schneider Hospital, which currently owes $2.76 million.
Bruno-Vega said he recently met with Finance Commissioner Bernice Turnbull and Office of Management and Budget Director Ira Mills to discuss the outstanding bills. He said he was informed that the government would be able to pay their bills for fiscal years 2003 and 2004 once a new budget was passed. Although that happened Monday, Bruno-Vega said Mills and Turnbull have warned that the central government may not be able to cover the millions owed to WAPA from previous years.
"The fact is that we were informed by the Finance Department that they were trying to stay current with this fiscal year, given the current [budget] deficit," Bruno-Vega said. "They are at least trying to stay current."
That response was not enough for some board members, who once again discussed cutting off nonessential services to the government until a bulk of the debt is paid. Although WAPA officials have frequently contemplated cutting off services to the government in the past, the board has never mustered the consensus to pull the plug.
Board member Alphonso Franklin expressed concern that bills for rate payers have risen in large part because the government has failed to pay its utility costs, while WAPA continues to struggle to meet growing demand and rising fuel costs it has yet to pass on to customers. Franklin said rate payers have continued to suffer the consequences, and the government continues to delay payment — with no penalties for late payments.
"My concern is that those monies that are owed that are not current, there are no interest charges or penalties," Franklin said.
Bruno-Vega said he was unsure what policy, if any, WAPA has taken in regard to interest on late payments from the government.
Board Chair Carol Burke said that because of a recent bond issue, WAPA must ensure the government meets its obligations. If the government falls behind on its payments, WAPA could face an uncertain future with bond insurers.
"We want to make sure that they remain current" Burke said.
The impact of an agreement between WAPA and the government to settle some outstanding accounts has been essential to WAPA's financial health. According to a 2002 fiscal year report issued by auditors KPMG, the government's payment of outstanding water bills increased the utility's water system's unrestricted cash flow by over $14 million – or 300 percent – in fiscal year 2002.
According to the financial report, the government's debt was cut by more than 50 percent in fiscal year 2002 as a result of the payment of several old bills. The payment was also instrumental in a bond issue that WAPA obtained earlier this year to complete several capital projects and infrastructure improvements.
However, the VI government's outstanding bills still total more than $14 million, Bruno-Vega said Tuesday.
He told the board that November's heavy rains have cost the utility more than $800,000 in damage, and that will likely climb higher.
"We are in a quandary right now because we do not know the impact of all the water that we have had," Bruno-Vega said.
He said that water desalination plants have shut down, and sales of metered water will likely be very low for the foreseeable future.
The board voted unanimously to elect Darryl Lynch as the new chair of the WAPA board effective Dec. 1. Claude Molloy will serve as vice president and Andrew Rutnik will once again be secretary.
Although the new Board officials were approved unanimously, Rutnik and Franklin were absent for the vote.
Lynch will replace Burke, who has resigned from the board to take another job within WAPA. Lynch said he will work for some changes to the board, including holding caucuses before meetings and pressing board members to attend meetings more frequently.

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