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WAPA Board Approves the Authority’s Audit Financial Results

(Wednesday, February 04, 2015)

WAPA Board Approves the Authority’s Audit Financial Results

In a special board meeting on Wednesday, February 4, the Virgin Islands Water and Power Authority’s Governing Board approved the Authority’s 2014 Audit Financial Results. Prepared by BDO USA, LLP (BDO), the audit represents the Authority’s financial position, for both the Water and Electric Systems, for fiscal year ended June 30, 2014.

According to BDO’s financial highlights for 2014, WAPA’s Water System’s net position increased by $3.7 million, or 8%, as a result of fiscal year 2014 operations. The operating and production expenses decreased from $36.0 million to $29.9 million, a 17% decrease compared to the prior year. This was due to a decrease of $6.5 million in production cost of water distributed, a decrease of $684 thousand of depreciation expense, increases of $244 thousand in operation and maintenance expenses and $177 thousand in customer expenses, offset by an increase of $625 thousand in administrative and general expenses.

BDO’s 2014 financial highlights for the Electric System report a net position decrease by $2.9 million, or 6%, as a result of fiscal year 2014 operations. During 2014, total operating revenues were $321.2 million, compared to $339 million in 2013. The decrease of $17.8 million is due primarily to a decrease in fuel escalator revenues of $16.5 million and base revenues of $12.2 million, offset by $10.9 million in other revenues. Capital grants and contributions received by the Electric System were $11.5 million in fiscal year 2014, compared to $4.9 million in fiscal year 2013. Of this amount, $267 thousand was used on the street light projects, $377 thousand for the Frenchman’s Bay Road utility relocation, and $485 thousand for the Rothschild Francis Market Square project.

WAPA CEO Hugo V. Hodge Jr., was extremely pleased with the report of the Authority’s financial position. “We’ve had a good 2014,” said Hodge, “and we’ve exceeded all of the coverage requirements for the electric system.” The Authority’s net electric revenues for fiscal year 2014 yielded higher than required coverage ratios. Senior coverage is reported at 225%, over the required 125%; senior and subordinate coverage is 143%, above the required 115%; and total debt coverage is 125%, over the required 100%.

Board member Donald Francois was also encouraged by the audit findings. “These are all favorable points that will definitely improve our previous rating and help the Authority in looking for funding,” said Francois.

WAPA CFO Julio Rhymer Sr. assured the board that the Authority’s financial position will continue to show progress. “As we move forward our financial position is improving,” said Rhymer, “because our management of expenses is improving.”

Board members in attendance at Tuesday’s Special Meeting were Chairman Atty. Gerald Groner, Vice Chair Juanita R. Young, Secretary Noel Loftus, Donald Francois, Cheryl Boynes Jackson and Elizabeth Armstrong.