Aug. 1, 2001 – The saga of the government's $25.9 million debt to the Water and Power Authority is all over but the shouting, at least on paper.
On Wednesday afternoon, WAPA delivered to Government House a memorandum of understanding sealing terms of payment the two entities agreed upon at a July meeting.
"We're very happy the governor is working with us, and we are hopeful he will sign it before he goes off island," Laurie Christian, a WAPA public information officer, said.
Although it has not been announced, Gov. Charles W. Turnbull is expected to attend the 2001 National Association of Governors Conference next week in Rhode Island.
The document delivered Wednesday "puts in writing what we agreed to," Christian said, and it "formalizes the talks held earlier."
Turnbull and his advisers met on July 10 with Joseph R. Thomas Jr., WAPA executive director, and Carol Burke, WAPA board chair, to work out details for payment in full of the longstanding debt. The agreement calls for $17.1 million to be paid by Aug. 15, and another $5.3 million by Nov. 15.
The meeting came about after Thomas had announced a deadline of Aug. 10 for the government to meet its obligations — some dating back more than seven years — or face disconnection of all but essential agencies.
Christian said WAPA officials held "numerous meetings with a variety of government agencies" to validate the utililty's billing figures. These meetings went well, and the agencies were "very responsive," she said
Thomas has said the government's payment of its debt is necessary in order for WAPA to avoid a rate increase in the coming fiscal year and for it to meet its own short- and long-term debt obligations that are coming due.
In July, he said that a payment plan was "most important in boosting the credibility the authority will have for our financial standing." He noted then that "the financial health of a community's utility speaks volumes" to potential investors.
A WAPA press release distributed on July 10, when the utility delivered "demand for payment" notices to government agencies, said the total amount past due for electricity and water amounted to $25.9 million. However, it said, WAPA in turn owed the government $3.5 million for the construction of a water plant. It also has a debt of $5.3 million owed to the Federal Emergency Management Agency from Hurricane Hugo.
Balancing out these two obligations would leave the government owing the $17.1 million that is to be paid by Aug. 15. However, the FEMA amount will enter into the equation only if the administration fails in its efforts to get its Hurricane Hugo debt forgiven. If the debt is forgiven, as expected, "WAPA would expect these funds to be returned," the release said.
In response to challenges of the accuracy of the utility's $25.9 million debt figure, WAPA accounting officials carried out a reconciliation of a sample of government delinquencies representing nearly 60 percent of the total past-due amount. The results supported the earlier accounting "virtually to the penny," WAPA officials said.
