ST. THOMAS — V.I. lawmakers unanimously advanced a bill Wednesday to chip away at debt owed to vendors and haulers, the bulk of whom are not only awaiting years of back pay but — in some cases — reaching a breaking point.

Bill 33-0072 seeks to appropriate a federal Medicaid reimbursement of $39,467,909 from fiscal years 2011-13.

The funds, according to Jenifer O’Neal, director designee of the V.I. Office of Management and Budget, offer an opportunity to pay down outstanding debts — and in turn, improve the territory’s fiscal standing and services.

“The mandates of this bill seek to address a number of accounts payable that have been outstanding for quite some time to the V.I. Water and Power Authority, as well as assisting with some vendor payments at the Waste Management Authority and addressing some of the other needs of departments and agencies, especially for behavioral health,” said O’Neal, who testified Wednesday before the Legislature’s Committee of the Whole.

Much of the session revolved around $9,903,746 of the funds to Luis Hospital on St. Croix, to be paid directly to the V.I. Water and Power Authority for outstanding bills; and $4,312,454 to Schneider Hospital on St. Thomas, also to be paid to the utility.

Lawrence Kupfer, executive director of the Water and Power Authority, who argued in favor of the bill, said the utility desperately needs the influx of cash, and that the combined $14,216,200 would still be short of the $22.9 million that the hospitals owe the utility.

Moreover, he said, the $22.9 million only accounts for 10% of the utility’s outstanding $202 million of payables from operations, not including long-term debt.

“The $202 million of payables has built up as a result of the hospitals and other government entities not fully paying their bills and an under collection of revenues due to inadequate LEAC and base rates,” Kupfer said.

“Many critical vendors have indicated that they will no longer continue to provide their services to the Authority if the amounts owed are not addressed. Should this occur, the Authority will not be able to continue to provide certain necessary services,” he added.

Adrian Wade Taylor, interim executive director of the V.I. Waste Management Authority, also testified Wednesday in favor of the bill, stating that the $3 million slated for the agency will be used as a down payment of outstanding debts to haulers.

“The Authority has an outstanding debt of $27,583,974.30 at the end of April; of this, landfill operators are owed $12,586,892.12; wastewater treatment plant operators are owed $6,290,853.50 and other vendors are owed $4,060,917.87,” Taylor said. “The total amount due to the haulers is $4,645,310.81.”

Taylor said the appropriation would enable the Waste Management Authority to pay approximately 65% of what is owed, with a balance due to haulers of $1,645,310.81.

Senators largely saw the benefit in the allocation plan.

“It is important that we recognize the importance of paying our bills and not generate new bills before ensuring that we drill down on paying out our old bills,” said Sen. Donna Frett-Gregory.

Sen. Athneil Thomas followed suit, indicating that the money hospitals owed to WAPA represented “real dollars that affect each and every Virgin Islander, so I feel they need to hold up their end of the bargain.”

Others, however, blasted the utility for years of perceived mismanagement and failed attempts to bring down rates.

Sen. Kurt Vialet even defended the hospitals, insisting their lack of payments were in many cases a necessity given their priorities in health care.

“When you have to make a decision as to whether you’re going to purchase pharmaceuticals or pay WAPA, you purchase pharmaceuticals,” Vialet said. “When you have gunshot victims going into hospitals not covered by insurance, and this local hospital system has to take care of them at the cost of hundreds of thousands of dollars, the hospital has to bear the cost.”

“So, we’re acting like they were irresponsible for not paying their money, but were they being irresponsible if somebody’s family goes in there and they can’t treat them because they’re paying their WAPA bill and procuring what they need for the hospital?” Vialet added.

Capping a nine-hour session, all 15 lawmakers present voted in favor of advancing the bill to the Rules and Judiciary Committee.

The bill includes:

• $8,710,649 to the Labor Department for the payment of outstanding workman’s compensation insurance.

• $2 million to the Health Department for behavioral programs to be divided equally between the two districts.

• $5 million to Luis Hospital for the payment of outstanding taxes owed to the V.I. Bureau of Internal Revenue.

• $4,541,060 to the General Fund to assist in the cost of the government’s negotiated salary increases.

• $2 million for both the St. Croix and St. Thomas-St. John districts for multiple programs.