PRASA board approves fiscal strategy for next 4 months
The Puerto Rico Aqueduct and Sewer Authority’s board of directors approved Tuesday a plan mapping out its finances through the end of the fiscal year that is anchored on the approval of the bill establishing a new credit-issuing entity that is already facing opposition.
The strategy calls for delaying some $36 million in payments to a reserve account to over guaranteed debt payments through June 30. The plan also includes collecting some $35 million from public corporations and government agencies that owe a collective $60 million in past-due water bills and getting the majority of them to keep up with the $140 million they rack up each month, PRASA Executive Director Alberto Lázaro said.
PRASA has a number of payments coming up through the end of Fiscal 2016, including some $18 million in debt service payments related to about $1.1 billion in loans granted by the U.S. Department of Agriculture, the U.S. Environmental Protection Agency and pending debt associated with the Superaqueduct project.
Furthermore, the public corporation has to put up $17 million to cover a payment on a credit line it has with the Government Development Bank, which facilitated $180 million in 2008 as guarantee for a $1.3 billion bond issue. The agency also owes its contractors about $150 million for projects in the pipeline, including a number of them that have been halted mid-construction due to non-payment.
The agency’s fiscal obligations could be covered by new money that could be raised through the PRASA Revitalization Corp. proposed through a bill currently under review at the House, that would be authorized to issue debt for PRASA, Lázaro said.
“If this bill doesn’t pass, our situation becomes more difficult. We’re happy that the Puerto Rico Electric Power Authority Revitalization Act was approved because it opens the way for our bill,” said Kenneth Rivera-Robles, chairman of the PRASA board.
The agency’s board will revisit its plan on March 31 to assess how events unfold in coming weeks, and make the necessary revisions. If PRASA is able to lock down financing through the securitization vehicle, it could potentially hold back a rate revision through fiscal 2018, Lázaro said.