Aug. 24, 2007 — Suffering from a cash-flow crisis, the V.I. Water and Power Authority’s governing board looked to millions of dollars in unpaid government-agency electric bills at its meeting Friday on St. Croix.
The meeting came in the wake of a decision Thursday by the Public Services Commission telling WAPA it may not charge customers enough to pay for the oil they buy to generate electricity. (See “PSC Nixes New LEAC Hike, OKs Summer Cut in Ferry Service.”)
During the discussion of the authority’s financial reports, Maurice Sebastien, WAPA’s acting chief financial officer, reported that at least 73 percent of the authority’s outstanding government accounts receivable come from three agencies: the V.I. Housing Authority, Juan Luis Hospital and Roy Schneider Hospital.
High oil prices have hurt WAPA’s finances because the PSC will not allow WAPA to raise the LEAC, the rate they charge for the oil they burn. Also, earlier LEAC increases — while not enough to recoup the higher cost of fuel — resulted in millions of dollars in past-due bills from government agencies. The two sources of loss have strained WAPA’s reserves for some time now. (See “Unpaid Bills Leaving WAPA Strapped for Cash, Officials Say.” and “WAPA Officials Frustrated by Slow Pace of Government Payments.”)
Alphonso Franklin, chairman of the WAPA board’s debt-collection committee, said the committee has recently spoken with government officials about outstanding government accounts receivables. According to Franklin, Gov. John deJongh Jr. appointed his chief of staff, Louis Penn, as the contact person to arrange a meeting to discuss and resolve the issue.
In his letter to Franklin, the governor said, “This executive branch is committed to diligently addressing these obligations, as demonstrated by the submittal of several supplemental budgets to address this debt, the Office of Management and Budget’s continuous communication with WAPA representatives, the allotment of supplemental appropriations to address the debt and the transmittal of payments by the Department of Finance.”
Franklin, who chaired Friday’s meeting, commended WAPA’s staff for its performance during Hurricane Dean.
The authority’s external auditors, Ernst & Young, opened the board meeting with an overview of the 2007 financial audit plan. WAPA’s financial accounting and reporting have improved, said Ernst & Young Senior Manager Alex Rodriguez. The 2007 audit will focus on government accounts receivable, investment portfolio, inventory, property and insurance, the deferred fuel balance and the debt-service coverage for the water system. The auditors assured the board that, as in the past, they will verify the government accounts receivable balances reported on the authority’s financial statements.
In other business, the board amended its bylaws to allow video-conference attendance at committee meetings and certain regular meetings.
The board also approved the following: a contract with Deltak for the replacement of boiler tubes for the waste-heat recovery boiler at a cost of $1.5 million and a contract with Tampa Tank to refurbish and upgrade water-storage tank No. 3 on St. Thomas. It also approved a contract with Comprehensive Security Concepts for security-guard services in the St. Thomas-St. John District for $615,875.
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