At a meeting Thursday, the V.I. Water and Power Authority’s board of governors voted to end a two-year wage freeze for its employees and to extend its current lines of credit with the goal of consolidating its debt with one bank and paying it down.
The board voted to lift the wage freeze during executive session, so the details of their deliberation are unknown. The move will not result in an immediate raise for WAPA employees. Rather the board opened the door for negotiations to take place with the three unions that represent its workers.
The board voted to extend its $16,750,000 line of credit with First Bank by three years, with a final maturity date of June 25, 2016.
If the board had failed to do so, WAPA would have had to pay the full balance on the account this year.
Under their agreement with First Bank, WAPA can draw up to $10,000,000 in working capital for the electrical system and $1,125,000 in working capital for the water system.
WAPA has tapped the majority of this credit, owing $6,000,000 on the electrical side and $937,600 on the water.
The agreement also allows WAPA to draw up to $4,875,000 for capital projects on the electrical system and $750,000 for capital projects on the water system.
WAPA has maxed out this line of credit on the electrical side but owes nothing on the water.
The bank demanded a .5 percent increase in the interest rate while negotiating the extension.
“Our interest rates have gone up slightly to reflect our risk because the last couple of years we didn’t submit our financial statements on time,” said Chief Financial Officer Julio Rhymer. “Now our floor is 4.25 (percent).”
Voting in favor were board members Gerald Groner, Karl Knight, Noel Loftus, Juanita Young, Donald Francois and Cheryl Boynes-Jackson. Members Alicia Barnes, Wayne Biggs and Elizabeth Armstrong were absent.
The board voted to extend a second line of credit held with Banco Popular for six months.
The line has a maximum of $10,000,000 of which WAPA currently owes $6,000,000. Rhymer explained that the account had previously been paid off, but they tapped the credit line to make their last payment to Hovensa.
Rhymer said that at the end of six months he intended to consolidate WAPA’s credit lines with a single bank and pay it down.
Voting in favor were board members Groner, Knight, Loftus, Young, Francois and Boynes-Jackson. Members Barnes, Biggs and Armstrong were absent.
In other business the board voted to rescind a contract offer to Apex Covantage for the installation of automated meter systems (known as AMI) across the territory.
The AMI project is considered by WAPA to be a major step towards modernizing the authority. The meters will transmit information directly to WAPA, removing the need for meter readers. The “smart” system also promises to help prevent theft and to allow the authority to more quickly pinpoint and correct outages.
Apex was awarded a contract to install the meters on June 26, but according to Lorelie Farrington, general counsel to WAPA, upon further review of their bid by the legal team, it was discovered the company failed to meet a key requirement.
The original request for proposals mandated the bidder procure a “bid bond and performance bond commitment letter,” which would have guaranteed that if the company failed to perform its task, WAPA could collect damages from it.
Farrington said the omission was initially overlooked because Apex’s bid was rushed through the vetting process. She said that the bid had been delivered before the deadline for consideration of May 31, but was lost and not brought to the attention of the contract administration division until June 10.
Farrington said legal council advised that the bid must be included in deliberations because Apex submitted before the deadline, so the proposal was quickly forwarded to evaluation committee and the error was missed.
Executive Director Hugo Hodge said WAPA would issue a new request for proposals and start the bidding process over because the two other bids considered alongside Apex were unimpressive.
After the meeting, Clinton Hedrington, WAPA’s director of transmission and distribution, said there was more than enough time to conduct a second bidding process without having to push back the December 2014 estimated completion date for the AMI project.
He also said WAPA was exploring a second option to have their own staff trained in the installation process and handling it in house.
Voting to rescind the contract offer were board members Groner, Knight, Loftus, Young, Francois, Biggs and Boynes-Jackson. Members Barnes and Armstrong were absent.