June 14, 2008 — The V.I. Water and Power Authority's "cash position is deteriorating daily," according to Nellon L. Bowry, WAPA's chief financial officer.
Bowry, speaking at an emergency Governing Board meeting Saturday, gave figures that board members did not find reassuring. WAPA's oil bill this month was equal to its total collection in a month — leaving no money for payroll, maintenance, equipment purchases or anything else Bowry said.
After the presentation by Bowry, the board approved a resolution to increase its overdraft capabilities with FirstBank from $2.5 million to $5 million and its line of credit from the current $2 million to $20 million.
Board member Gerald Groner said that this appeared to be a "stopgap measure" and a short-term solution. Bowry did not argue against that assessment but said it was part of an overall strategy being devised by WAPA.
"This just changes the case from terminal to critical, but you are still in the ICU," said Board Chairperson Juanita Young.
The board gave WAPA approval to seek the financial measures at a May 29 meeting. WAPA then went to FirstBank, Banco Popular and Scotia Bank to obtain the $20 million dollar line of credit. He said Scotia Bank declined to participate. WAPA's plan is to now split the line of credit with FirstBank and Banco Popular. Of the $20 million, $12 million will go to pay off existing debt, according to Bowry.
The resolution stated the necessity of the extended credit because "the continuing rapid increase in fuel oil prices is causing the Virgin Islands Water and Power Authority payments for fuel to exceed its cash receipts."
WAPA has been falling behind in its payments to vendors and suppliers, Bowry said.
He said five years ago WAPA's total oil bill for the year was $58 million while this year the June bill alone was $24.8 million.
Another part of the WAPA financial strategy, according to Bowry, is to go back to the Public Services Commission and ask for another increase in the Levelized Energy Adjustment Clause (LEAC).
The PSC approved Monday a 22.9-percent increase in the LEAC, about half of the increase requested by WAPA.
Also attending the meeting were Noel Loftus, St. Claire Williams and Brenda Benjamin.
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