Puerto Rico Aqueduct and Sewer Authority Executive Director Alberto Lázaro said Sunday the chances of an increase in water rates could be pushed back with the approval of House Bill 2786, which seeks to address the public corporation’s funding needs for capital improvements.
The so-called PRASA Revitalization Act is slated to be approved today, delaying the possibility of a rate hike next month, as Lázaro had warned was a possibility earlier this year. The bill will create a financing vehicle for the water authority that will be able to issue debt guaranteed by revenue streams. PRASA has said it needs some $750 million to cover its financial obligations, including payments to contractors.
“With the approval of this law, we will be able to go to markets, which have told us we needed to assure them we had the guarantees requested to get financing to allow us to begin to pay debts to contractors and restart the Capital Improvements Program,” Lázaro said during budget hearings held by the House Finance Committee chaired by Rep. Rafael “Tatito” Hernández on Sunday.
“The bill makes possible the tools to seek funding and pushes back the possibility of a rate increase,” he said.
The bill’s accompanying report, which has already been approved and signed uoff at the House, is expected to be approved by the Senate during today’s session, Hernández said.
During the hearing, PRASA presented a $1.3 billion budget for Fiscal 2017, which represents a reduction of roughly $44 million. When broken down, the agency is implementing a $12 million cutback in operational expenses, a $12 million cut in debt service expenses and a $19.8 million decrease in investments related to the Capital Improvements Plan.