V.I. Water and Power Authority board members on Wednesday authorized the creation of a new escrow account to pay for the storage of a new heat-recovery boiler for the territory.
As a condition of its contract with Hamond Delta, the company hired to redesign or refurbish parts of the new boiler and the existing boiler for St. Thomas, WAPA is required to deposit an initial $200,000 as collateral.
At an emergency meeting in October, board members approved the contract with Hamond Delta that would allow the new heat-recovery boiler for St. Thomas to be stored stateside for up to 12 months while some of the parts are being redesigned.
The boiler was recently purchased and shipped from California to Minnesota, where it was supposed to be stored in a facility owned by Hamond Delta. The company told the authority last month that the space they had set aside for the boiler was no longer available, forcing WAPA to either ship the boiler back to the territory or find another storage space on the mainland.
WAPA officials have said that shipping the boiler back now would cost approximately $1 million, but the real issue is finding a climate-controlled place to store it until the redesign is finished. And since the existing Unit 21 boiler is already being stored by the company while also waiting a redesign, officials have said it made more financial sense to bring everything back one time.
The resolution passed by the WAPA board in October authorized the authority’s executive director to negotiate a contract with Hammond Delta at a cost not to exceed $508,101 for handling, inspection, repackaging, and storage of the new boiler for up to 12 months, or the time needed to finish the redesign
At its emergency meeting Wednesday on St. Thomas, the board also approved creation of the escrow account to begin the process.
The board also authorized its executive director to enter into an extension agreement with Banco Popular that pushes back the maturity date on a $1.8 million general obligation note for the water system.
The agreement – $1.8 million with Banco and $1.1 million with First Bank – gave WAPA a $3 million line of credit for its water system, and allowed them to purchase equipment for water production, distribution and other related facilities, and cover maintenance costs.
Board members said Wednesday that they had already received approval from Banco Popular for its request to extend the maturity date from Nov. 13, 2014 to Nov. 13, 2015.
Attending the meeting Wednesday were board members Elizabeth Armstrong, Wayne Biggs, Donald Francois, Gerald Groner, Karl Knight, Noel Loftus and Juanita Young.