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Charlotte Amalie
Wednesday, June 19, 2024
HomeNewsLocal governmentSenators Hold WAPA Financing Bill During Special Session

Senators Hold WAPA Financing Bill During Special Session

Senator Kenneth L. Gittens questions WAPA on their request for funding during a special session on Wednesday. (Photo courtesy of the V.I. Legislature)

During Wednesday’s legislative special session, a bill was proposed to the Senate body to grant Gov. Albert Bryan Jr. a $150 million line of credit from the general fund. $45 million of the proposed funding would be allocated to V.I. Water And Power Authority to bail them out of their Vitol contract.

Senators unanimously agreed to hold the governor’s bill in the committee until the next meeting to discuss and create amendments to the bill. CEO of WAPA, Andrew Smith, was permanently in the hot seat with senators as they were concerned by the request for funding due to what they claim is WAPA’s lack of transparency and what they described as its constant failure to submit proper documentation.

According to the language, Bryan’s bill is meant to offer financial flexibility to assist WAPA with a buyout of its infrastructure agreement with propane supplier Vitol, meet other existing or pending financial emergencies, and provide funds for the government to spend on current expenses, capital expenditures, and other obligations of the government.

Senators agreed that amendments must be made to the bill as proposed. It appeared that the language forces them to relinquish legislative control of funding to the executive branch, they said, although they were assured by members of the governor’s financial team testifying Wednesday that it was not the case.

Sen. Franklin Johnson asked WAPA if they had any documentation to provide to the Senate body outlining proof that they owed $45 million to VITOL, to which the CFO of WAPA Jacob Lewis stated that the information is based on the contractual agreement.

“The last payment to VITOL from WAPA for infrastructure was made in December 2022, and previous to December was in May 2021,” said Lewis.

“This is another bailout for WAPA that is going to rest on the back of the ratepayers,” Gittens said. “At the heart of all WAPA’s problems, financial and otherwise, is mismanagement and a lack of accountability. That is the reason for WAPA’s tremendous debt to VITOL in the first place.”

According to testimony given by Jenifer C. O’Neal, the director of the Office of Management and Budget, “The Line of Credit Debt would be secured by a combination of sources including Interest Collections, Gross Receipts Tax Collections, Income Tax Collections, and Federal Grant Funds.”

Senators were not convinced it was a sufficient way to pay back the funding, which led to O’Neal attempting to plead their case on the governor’s behalf.

According to O’Neal, the measure also proposed is an effort to allow the government of the Virgin Islands to jumpstart the numerous capital projects that have been approved by FEMA. The projects require funds for design and other start-up costs to get off the ground while the projects work through the federal approval process. The remaining $105 million would be allocated toward these projects throughout the territory.

Completion of these projects would assist in generating tax incentives, she said. However, during the line of questioning regarding the completion of these projects, it was noted that WAPA was not the only one having contractual issues with agencies, and specifically singled out was the U.S. Department of Housing Urban Development.

Testifiers said that HUD has not approved a grant agreement to use the funds as collateral. O’Neal further said if HUD does not give the OK, they would have to find funding through local sources.

The testimony was not enough to sway senators, who said that amendments would be needed for the next session.

“I can’t in good conscious allocate any more funds to WAPA until there is true accountability,” Gittens said.

In a statement issued after the session, Bryan said, he “was disappointed in the outcome,” as it could potentially delay “WAPA’s ability to deliver effective services … and the government’s ability to move forward with key recovery projects in a timely manner.”

“However, I look forward to working with the 35th Legislature and those members not supportive of this current approach towards alternative solutions to addressing these matters prior to the next scheduled legislative session,” Bryan said.


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