GWA hit hard financially by COVID-19 as hotels curtail water consumption

GWA general manager Miguel Bordallo (PNC file photo)

Many may be disappointed and even worried now that GPA and GWA are thinking about resuming disconnections for delinquent accounts.

But GWA general manager Miguel Bordallo says that thanks to a drop in revenue the utility is struggling to stay afloat.

When it comes to the economic impact of the drop in tourism due to the pandemic, most think of hotels and restaurants.

But GWA has also taken a huge hit. After all, tourists use water.

Bordallo said that right now, GPA is probably better off than GWA.

He told Newstalk K57’s Patti Arroyo Wednesday morning that GWA had already anticipated a huge loss of revenue at the beginning of the public health emergency and has been trying to hold on ever since.

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“When the emergency declaration was declared, we at that time were already modeling our financial projections to take into account a drop in business, so we made some projections about what that might look like, and for how long we would see a decline in revenues in certain customer classes, most notably the hotel and commercial classes, to essentially support the tourism base. And based on those projections, we initiated a cost containment plan very early on, and with each month as the financial reporting comes in we’ve been adjusting that model and our projections, to try and keep our heads above water and keep our costs below our revenues,” Bordallo said.

Bordallo did say that residential use has gone up since more people are staying home for longer periods of time.

That amount of volume has helped offset the loss of volume from tourists at least a little.

He said that one drawback about the rise of residential use is that residential sewer charges are a flat rate.

So the increase in sewage and the need for treatment has gone up but revenues haven’t.

Bordallo said GWA has curtailed its production to match the drop in demand but that certain operations and maintenance costs remain regardless of volume.

Bordallo said they also worry about the debt service coverage ratios for their bonds.

The bonds are used to fund capital improvement projects that the utility expects to last another three years.

“We’re treading water and we’re keeping our heads above the water, but it is a concern and if this continues, without us making further cost containment measures, then we could be in technical default, and that’s not a place that I want to lead GWA. So we’re working really hard. The staff has been really cost conscious and doing their part. I think everybody is..and still trying to keep the water running for everybody,” Bordallo said.