Feb. 6, 2020 – By a unanimous vote, the Water and Power Authority's governing board has agreed to pursue $60 million in capital improvement funds from the bond market.
The vote was taken at a special meeting of the board Tuesday.
"They have been considering going to the bond market since last year," company spokeswoman Cassandra Dunn said of the board Wednesday. "We have to improve the reliability of water and power."
Dunn said obtaining the bonds is part of WAPA's 10-year capital improvement plan. She also said that recent payments by the V.I. government on its $24 million debt helped to improve the utility's financial profile and its chances for obtaining the bonds.
"Payments from the V.I. government helped us with our stability," she said.
According to a WAPA release, "While the bond proceeds will be used to refinance the outstanding line of credit, provide for the debt service reserve funding and pay the costs of bond issuance," their principal purpose "is to restore the authority's water and electric infrastructure to a high level of reliability." A part of the proceeds also will go to "upgrade the authority's communications, customer service and financial systems," the release stated.
WAPA executive director Joseph Thomas said the projects will address concerns raised "about the reliability of the territory's infrastructure" with regard to the University of the Virgin Islands' planned research and technology park, as well as hotels and other businesses.
Specifically, bond money will be used to conduct maintenance, buy new equipment and lay new water lines — and to build a new kilovolt distribution bus to replace the aging unit at Krum Bay on St. Thomas. Failures with the existing bus led to power outages that left St. Thomas and St. John in the dark last month.
WAPA currently has an outstanding debt of $140 million. Dunn said the cost of financing the bonds has not been determined yet.
In the release, WAPA's chief financial officer, Robert Vodzack, said the utility plans to approach the bond market in the second quarter of Fiscal Year 2002 and "has an aggressive schedule" for completing its Fiscal Year 2003 budget, which he described as "key to preparing a rate case study needed for issuance of the bonds."
While the bond issuance process is under way, the release stated, the WAPA board will hold special meetings in addition to its regularly monthly sessions in order to focus on facilitating the bond financing process.