Press Releases

Default text size Larger text size Even larger text size   print
RSS feed
< Back to Main

WAPA Board Approves 2013 Audit

(Tuesday, December 31, 2013)

December 30, 2013

WAPA Board Approves 2013 Audit

In an emergency meeting held Monday, the Virgin Islands Water and Power Authority Governing Board voted to approve the Authority’s 2013 audit of the financial statements for both the Water and Electric Systems.  The external audit, conducted by BDO USA, LLP, covers the last two fiscal years, ending June 30, 2013 and 2012.

As stated in the Electric System’s audit report for 2013, the Authority’s net position (all revenues minus all expenses plus the previous year’s net position) decreased by 15%, or $9.9 million, as a result of prudent fiscal year 2013 operations; current assets increased to $87.2 million as a result of increases in accounts receivables and fuel oil, but was offset by decreases in cash due from the  water system  for general obligation notes of $0.5 million and materials and supplies of $1.3 million; the deferred fuel balance increased by $0.6 million as the levelized energy adjustment clause (LEAC) factor  permitted by the PSC did not allow the Authority to recover its cost of fuel during the year.

The Water System’s report shows a net position increase of 8% as a result of 2013 operations; total operating revenues increased by 9% due to increases in water sales to customers of $3.2 million, offset by a decrease in fuel escalator revenues of $1.1 million; operating and production expenses decreased by $2.1 million due to decreases of $2.6 million in production cost of water distributed and increases of $0.3 million in operation and maintenance expenses and $0.2 in customer expenses, offset by an increase of $0.2 million in administrative and general expenses. Water production by the more economical reverse osmosis method and federal and local capital grants were major factors in improving the financial position of the water system.

In his statement to the board, Executive Director Hugo V. Hodge, Jr. said he was elated to be able to present this audit “on time”. “It’s been a few years since the Authority has been completely current on our audit,” said Hodge, “we’ve been behind since about 2006.”  He noted last year’s audit was about six months late, and mentioned the factors that contributed to the late audits in the past included the increase in deferred fuel costs and the change in the federally required Governmental Accounting Standards Board (GASB) regulations as it concerns Other Post-Employment Benefits (OPEB), which Hodge says has been a challenge to many municipalities in recent years.  Hodge also noted that with belt tightening measures, the Authority was able to end up in the black for operating income in FY2013.  Chief Financial Officer Julio A. Rhymer, Sr. also noted that for the first time in over 5 years, the water system has met its debt service ratio coverage on its bonds at 1.74x.

Board chairman Attorney Gerald Groner thanked Hodge and Rhymer, for getting the Authority’s audits back on track. “It’s difficult when you get to the point where the audits are behind,” said Groner, “climbing back to the point where the audits are timely is an arduous task, and not something that can be done in one year.” Hodge thanked the Board for their part in dealing with OPEB, and expressed his appreciation to Mr. Rhymer and his financial staff as well as the Authority’s audit staff for their diligent work to bring this process to completion.

To review the Authority’s audit reports, visit www.viwapa.vi/News/FinancialReports.

The Board also voted to extend the maturity date of the 2008 Series C Note Water System Working Capital Line of Credit with Banco Popular for one year to November 13, 2014.  The $1.875 million note, is a capital line of credit which provides continued funding that allows the Authority to acquire capital assets of water and electric production, distribution systems and related facilities. The working capital line of credit provides continued funding that allows for funding of key operating and maintenance expenditures. Rhymer explained that the extension will allow the Authority to reduce the water system’s debt and restore a full line of credit.  This will allow more flexibility in securing bonds in the future for system improvements as outlined in the capital improvement plan.

Board members in attendance were Chairman Atty. Gerald Groner, Vice Chair Juanita R. Young, Secretary Noel Loftus, Donald Francois, Cheryl Boynes-Jackson,
Elizabeth Armstrong, Licensing and Consumer Affairs Commissioner Wayne Biggs, and Planning and Natural Resources Commissioner Alicia Barnes.  Planning Committee Chair, VIEO Director Karl Knight was excused.

For more information about WAPA’s upcoming projects, visit poweringvi.vi or vies.vi.

 

###