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WAPA Will Pull the Plug if Government Doesn't Pay

March 10, 2005 – Members of the V.I. Water and Power Authority Governing Board are fed up with the government's failure to pay its bills in a timely manner.
At a board meeting Thursday, which started two hours late because of an inability to form a quorum on time, the WAPA board voted 4-1 to adopt a resolution to disconnect utility services to V.I. government agencies that default on their payment-plan agreements.
Board Chairman Daryl "Mickey" Lynch, and members Roy Anduze, Cheryl Boynes-Jackson and Alphonso Franklin voted in the affirmative. Board member Ira Hobson, who also serves as the commissioner of the Housing, Parks and Recreation Department, was the only dissenting voice. Claude Molloy, Andrew Rutnik and Yolanda Samuel-Deterville were absent.
The resolution also prohibits the utility from opening new accounts or upgrading electrical and potable water to existing accounts for any government customer that is behind 30 days or more in its payments to the authority, unless it first makes arrangements to pay its debt to WAPA.
The government's payment plan must also be in writing and the agency must maintain current payments on the debt and new consecutive monthly invoices, according to the resolution.
"The [Finance] committee felt that it was only fair to protect the authority," Lynch said of the resolution before the board.
Hobson said, "I vehemently disagree with this, because this resolution holds the government hostage."
Hobson told his colleagues two weeks ago he tried to get electrical service at the McBean Park on St. Thomas for a little league ballgame and was told he had to be "up-to-date" on his payment. Hobson said he had to "find" $1 million to make the department's bill current.
"Our government needs to learn to pay its bills," Boynes-Jackson told Hobson.
Anduze agreed.
"What the government of the Virgin Islands needs to realize is WAPA has to be No. 1 on the priority list," Anduze said. "Because if this utility were to fold, the whole community would suffer."
Hobson complained about the line-item allotment to pay utilities that each department was given. He said if they got lump-sum budgets they could "steal" from one area to pay WAPA.
Anduze told him the departments needed to pay WAPA first then worry about money for other things. Otherwise, Anduze suggested departments should keep spending within the line-item allotments.
"Why should the government ride on the back of the poor citizens of the community?" Anduze asked, adding that if WAPA had not insisted on taking action against the government, Hobson's department would probably never have come current on its debt to the utility.
WAPA chief executive officer Alberto Bruno-Vega said, "This is the initial procedure to get the attention of the government to keep their obligations." He added they would move into "Phase II" if the government did not pay its past balances.
The central government and its instrumentalities currently owe the utility approximately $16 million, with the Juan Luis Hospital carrying the heaviest debt.
Lynch said newly appointed JLY Board chairwoman, Francis Molloy, has made a commitment to the utility to remain current on utility bills until April, after which the hospital will enter a Memorandum of Understanding Agreement with WAPA to pay its arrears. Lynch said the JLH Board has indicated they may tap into their line of credit to address all previously due bills.
In other action, the WAPA board, after much discussion, voted to increase the amount of money Bruno-Vega could spend in individual transactions without requesting the board's approval to $200,000 from $75,000.
Board members argued over the necessity of raising Bruno-Vega's spending levels.
Hobson said he was "concerned" about giving additional discretion to the executive director.
"People in the community are already looking at the director and saying he is controlling," Hobson said, adding they should be careful. Hobson said they met once a month and had enough time to approve purchases.
Anduze said he was thinking of quitting the board for this very reason – it spends too much time on "fruitless" actions that could be handled by Bruno-Vega. (See "Roy Anduze Announces Resignation From WAPA Board").
"If the executive director cannot be trusted for expenditures less than $250,000, we need a new CEO," Anduze said, adding that increasing the spending levels would "free up" the board, which finds it difficult to meet, hence the late start Thursday.
Bruno-Vega was asked how much leverage he would need. He said between $200,000 and $250,000.
"Why ask him to come up with a number when we're not going to use it?" Boynes-Jackson said. "We don't have time to be sitting here micro-managing every step this man makes. We're playing games."
Anduze agreed.
"If you want to run WAPA as a business, then take the advice of business people," Anduze said, adding that if they wanted to run the utility as a "hobby" and "something they do in their spare time" then they could remain with the $75,000 spending level. Boynes-Jackson and Anduze are both private citizens with businesses.
The board voted 3-1 to increase Bruno-Vega's spending to $200,000. Anduze, Boynes-Jackson and Hobson voted in the affirmative. Lynch voted against and Franklin abstained. The resolution will take effect July 1.
The WAPA board also voted to extend the deadline of its contract with its bond counselors, Hawkins, Delafield and Wood, to Dec. 31, and gave the company a $75,000 increase. The board also heard a report from Ernst & Young on its fiscal year 2004 audit, which the company's representative deemed a "clean and unqualified audit."

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