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Government House, WAPA Agree to Settle Debt Issues

Nov. 04, 2005 – The Virgin Islands government has significantly reduced what it owes to the Water and Power Authority by swapping debts with the utility.
The debt swap cancels out an equal amount of over-due costs from both the Virgin Islands government and the electric company. Now WAPA officials says it must remain diligent so the government does not pile up over-due bills again.
On Thursday, WAPA's governing board voted unanimously to approve the plan that offsets amounts the utility owes the V.I. government against amounts due to the company by several government agencies.
In 1998 the Virgin Islands Legislature passed a law to have a percentage of WAPA's net profits, or payment in lieu of taxes (PILOT), paid to the government annually in order to raise revenues. According to Alberto Bruno-Vega, WAPA's executive director, PILOT is an indirect tax on the utility. The cost to the utility is $500,000, or 10 per cent of the company's annual net income from both electric and water revenues whichever is greater.
However, up to this year, WAPA has not paid the PILOT, alleging that government agencies owed the utility more than the total debt that WAPA owed. WAPA's accumulated debt to the government totals approximately $3.2 million.
In September an agreement was reached between James O'Bryan Jr., St. Thomas and Water Island administrator, and Bruno-Vega, on behalf of seven government agencies to offset or swap the debts.
The offset substantially reduces the outstanding accounts of the following agencies: Virgin Islands National Guard, $116,900; Property and Procurement, $210,000; Housing Parks and Recreation, $118,578; Juan F. Luis Hospital, $658,924; Police department, $514,348; Public Works Department street light settlement, $500,000 and the Department of Education, $1,091,148.
In October the Legislature passed Omnibus Act of 2005, which included $1.5 million from the general fund to pay outstanding bills to WAPA incurred by executive branch departments and agencies.(See"Omnibus Bill Included Laundry List of Other Provisions").
Bruno-Vega said the government would have to determine which agencies would benefit from the funds.
The payment does not completely clear the government's debt to the agency, Bruno-Vega said. A statement released from WAPA on Friday said that government autonomous agencies owed the company more than $8 million. Board Chairman Daryl "Mickey" Lynch said in the press release that the Juan F. Luis Hospital is complying with its payment plan to reduce its $3.7 million debt and recently paid more than $300,000. The payments will be complete in April 2010.
The Housing Authority's original debt was $4.1 million and their payment schedule would be complete in March 2006.
"I believe the government has done a significant effort to bring the accounts up to date and with the new budget approved, they should become current," Bruno Vega said in an interview on Friday.
He added that the utility would continue to monitor the government accounts so they don't fall behind. He said the WAPA board has set a strict mandate to perform disconnections on delinquent departments and agencies if they fall behind.

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