The V.I. Water and Power Authority’s governing board failed to adopt an operating budget for the coming fiscal year Monday, opting instead to temporarily extend the current year’s budget plan amid board members’ concerns about the utility’s continued deficit.
The vote to extend this year’s budget came after a failed motion by member Maurice Muia to table the matter and the board’s subsequent failed attempt to adopt the 2026 budget. Members Cheryl Boynes-Jackson and Kyle Fleming voted in favor, and members Hubert Turnbull and Muia voted against. WAPA’s chief executive, Karl Knight, noted in response that “there’s not much for me to work on.”
“I’ve presented a very realistic spending plan that captures what I believe is public knowledge: that the authority still has its fiscal challenges and does not collect sufficient revenues through its rates to cover full operating expenses — as catalogued in our presentation today,” he said, adding that the fiscal picture improves once federal reimbursements are taken into account. “But… certainly, the management team remains at the whim of the board to reconvene to discuss this item at the board’s choosing.”
During Monday’s board meeting, which was rescheduled after a cancellation last Thursday, WAPA Chief Financial Officer Lorraine Kelly told board members that the 2026 budget anticipates $287.2 million in electric revenues at a cost of $313.9 million. Water revenues are expected to bring in $38 million against $34.1 million in outflow. Asked to describe other projected costs, Kelly listed: advertising and promotions; engineering services; U.S. Environmental Protection Agency expenses; legal fees; maintenance; materials and supplies; office supplies; and others.
“And the total of that has a magnitude of approximately $26.1 million,” she said, which currently amounts to seven percent of the utility’s budget.
After the board failed to adopt the 2026 budget and before it voted to extend the utility’s current one, Knight reported that WAPA’s deficit is shrinking.
“Our rates do not cover our full expenses as a utility,” he said. “That has not changed with this budget proposal, although the budget deficit has shrunk by more than 50 percent since the beginning of the last fiscal year. So the budget deficit is closing, but there’s still some work to be done.”
After adjustments, he said, the deficit could be around $18.4 million.
“It doesn’t change our revenue forecast,” he said. “What it does mean is that some of the funding gap can be filled with federal dollars, whereas when we began the process of drafting the budget… those approvals had not yet been received, and so the budget — conservatively — was drafted without the anticipation of those budget approvals. Now that those are realized, that allows us to shrink what we had forecasted as a potential shortfall.”
During Monday’s meeting, the board also approved a largely federally-funded $864,550 trio of seawater intake screens to mitigate the impact of sargassum on St. Croix, an up to $16 million, two-year contract for debris removal and disposal with Hoagland VI, and a $225,000, six-month extension with West Peak Energy for work on the utility’s Wartsila generators.
Maxwell George, WAPA’s director of project management, said the extension was needed as the utility is “slowly getting to confident that we’ll be getting the Wartsilas back next month.”
The board also voted to close out advertising a request for qualifications to provide liquid propane gas for the Randolph Harley and Richmond power plants on St. Thomas and St. Croix, respectively.
Knight said the utility’s evaluation committee “is of the opinion that the solicitation process failed to meet the objectives of the RFP, and so that is their recommendation — that we close out the process with no award being made.”