At WAPA Board Meeting, Concerns About Approving $1.8 Million Project Cost Increase Without Reimbursement Assurance From FEMA

The V.I. Water and Power Authority governing board on Thursday fiercely debated whether to approve a $1.8 million increase in the Container Port undergrounding project to facilitate changes to the scope of work and increased labor and material costs. These costs were incurred between the time bids were submitted and notices to proceed were issued.

Also increasing the overall cost of the project are some changes to secondary service requirements of some customers, according to the authority. These changes required additional equipment such as transformers and duct bank runs.

But the project is funded through the Federal Emergency Management Agency, which as of Thursday had not provided the funding for the change order.

Vernon Alexander, WAPA project management director, said the funding from FEMA is something that has been discussed and documented. "We just haven't gotten that final written document from FEMA that says 'yes, it is something in O.D.R. [Office of Disaster Recovery], it is something at the VITEMA level.' We just haven't received the document so we need to proceed in other to capture the remainder of the work so that the project can proceed." In essence, Mr. Alexander said while a final written document had not been furnished by FEMA, it has been documented that the federal agency has placed on record its commitment to fund the increase.

The Container Port undergrounding project is being developed by J. Benton Construction, LLC.

Board member and Property and Procurement commissioner, Anthony Thomas, whose department manages the government's procurement transactions, was the lead voice during the Thursday meeting on what he said was a problem in the way the local government operates. He called on O.D.R. and FEMA to move expeditiously in furthering the release of critical funding.

"I think that we have to push on everybody," he said. "The project is important to the people of the Virgin Islands, but we have to demand that the funding be approved because we [WAPA] don't have access to that type of funding. And for me, I think O.D.R. needs to be pushed on and WAPA needs to tell them that they're holding up the project. And every vendor needs to complain that with FEMA's slow action it has a trickle-down effect that affects everyone in the process."

"Once you recognize that there is a need for this expenditure, it has to have a quicker process, and nobody should be giving you a word-of-mouth because you can't trust it. Because once it's not in writing and it hasn't gone up the chain, it has not been approved. And we have to stop that practice in the territory...

"Over and over this type of process has crippled us because we don't know what to believe. The only thing to believe is what's in writing, what's approved," Mr. Thomas said. He then asked Debra Gottlieb, WAPA interim chief financial officer, whether WAPA had the funds to cover the $1.8 million increase, to which Ms. Gottlieb responded, "No, the authority does not have the resources to do this without the financial assistance from FEMA and their commitment to fund this project."

Mr. Alexander reiterated that while a final, written approval for the $1.8 million from FEMA had not been received, there's documentation that speaks to FEMA's commitment. He said WAPA needed the board's approval to move forward with the work as much damage has been done to the Container Port Road as part of the undergrounding project.

"At this point we are at a stage in the project where we have excavated a significant length of the road and it needs to be returned to proper condition," Mr. Alexander said. "And we cannot return the road to its original condition, which is to pave half of the road or lane that is disturbed without the funding."

The WAPA board approved the request based on Mr. Alexander's assurance that FEMA would fund the cost increase.