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HomeNewsArchivesWAPA CHIEF: HAZARDOUS-DUTY BENEFITS 'A MISTAKE'

WAPA CHIEF: HAZARDOUS-DUTY BENEFITS 'A MISTAKE'

Sept. 25, 2001 – Despite strenuous objections by Government Employees Retirement System and Water and Power Authority officials, the Senate on Monday overrode Gov. Charles W. Turnbull's veto of legislation granting early retirement benefits to certain WAPA hazardous-duty employees, expanding the number of eligible employees to 316 from the present 58.
It is a move that Joseph Thomas, WAPA executive director, calls "a mistake we'll all pay for. We will have to put a rate increase in effect to offset whatever we need to have to pay out. We have been trying to avoid a rate increase, but now our hands are forced."
Thomas said Tuesday, "It would be a lovely benefit if we were rolling in dough when anything's possible, but with the fragile situation that the utility is in, our economy is in, and GERS is in, the legislation is not a fiscally responsible decision."
Thomas said he has had his staff searching to find another utility anywhere that has a similar retirement benefit. At a WAPA board meeting earlier this year, he had said that, "Nowhere in the civilized world does such a program exist." On Tuesday he said, "We were anxious to see if one existed, but we couldn't find anywhere else that it has been done."
He added: "Everybody is aware that WAPA is struggling with cash flow; we're on the very edge. The money we are getting from the government's past due account goes 100 percent for long-term debt-related issues and maintaining rates at the current level. If we hadn't gotten the money exactly when we got it, we would have had terrible problems. Because we did get it, we no longer have a 'qualified' audit."
As far as the government's payment of its past-due accounts, he said, "We are hopeful we will have everybody current by Nov. 15."
Thomas said Laurence Bryan, GERS administrator, has claimed the hazardous-duty benefits legislation would pave the way for possible bankruptcy of the retirement system in years to come.
Turnbull vetoed the measure in August, saying he could not support legislation that would negatively impact the GERS. In a letter to Senate President Almando "Rocky" Liburd covering the veto action, the governor wrote, "The intent of this legislation is admirable, and the Legislature has seen fit to appropriate $1.9 million … to fund the mandate." However, he said, GERS had said the amount was inadequate, given actuarial calculations showing a current 6.63 percent deficit in pension contributions vs. payouts.
Turnbull also chided Liburd, reminding him that senators had been told at a July Finance Committee meeting of the possible deleterious effects the legislation could have on the GERS.
The Senate and GERS have a history of go-rounds regarding retirement funding and the system has a court case pending against the V.I. government regarding funding. The new legislation is projected to increase the system's unfunded liabilities by $1.9 million. Neither Bryan nor any other GERS officials was available for comment Tuesday morning.
Sen. Vargrave Richards, a consistent opponent of the measure, said Monday, "The $1.9 million would be a substantial increase in the unfunded liability in the fund. We've compromised the GERS system through a series of bad legislation to the tune of a $500 million, and still growing, GERS deficit. Frankly, we are talking about the pension plan for all employees of the government every time we undermine the system. We've been given warning that not enough money is being contributed to the system, and with the market slump, this is a swift way to deplete GERS investment accounts."
Richards added, "It's important to understand the integrity of the system. We've done nothing to maintain and sustain it. We may be emotionally attached to this measure, but the reality is this system is one day going to come home to roost. While I support the idea of hazardous-duty pay, I cannot support it now."
Sen. Alicia "Chucky" Hansen succeeded in getting the override on a bit of parliamentary maneuvering around the "closed rule" in effect on all the bills the full Senate is hearing in a three-day session scheduled to continue through Wednesday. When the close rule is invoked, there can be no amendments to a bill before it is put to a vote.
The override passed on a 11-3 vote with Sens. Lorraine Berry, Roosevelt David and Vargrave Richards voting against the measure. Sen. Adelbert Bryan was absent.
Cash flow, fairness are barriers to business plan
In other comments to the Source Tuesday, Thomas expressed reservations about a proposal put forth by leaders of the territory's private sector on Friday as one of numerous steps to help the hospitality sector get through the economic crisis it is facing because of the drop-off of tourists in the aftermath of the mainland terrorist attacks. The hotel associations and chambers of commerce have asked that WAPA allow businesses to defer their WAPA bill payments for four months. They have proposed a similar reprieve from paying gross receipts taxes.
"We are doing something right now that might help a number of businesses and hotels that have been producing their own water and power — to get them on our system at reduced rates," Thomas said. "We are investigating energy-conservation plans and doing things internally that might help. The only problem is that we have cash-flow problems of our own. More than 50 percent of what we receive goes to pay our fuel bill each month."
Further, he said, "The other thing is the fairness issue. We got an earful when it became clear how much the government owed us. I've ordered electricity turned off over much smaller amounts." He said he understands the hospitality industry's problem but added, "We will have to be creative in what we do to help."

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Sept. 25, 2001 – Despite strenuous objections by Government Employees Retirement System and Water and Power Authority officials, the Senate on Monday overrode Gov. Charles W. Turnbull's veto of legislation granting early retirement benefits to certain WAPA hazardous-duty employees, expanding the number of eligible employees to 316 from the present 58.
It is a move that Joseph Thomas, WAPA executive director, calls "a mistake we'll all pay for. We will have to put a rate increase in effect to offset whatever we need to have to pay out. We have been trying to avoid a rate increase, but now our hands are forced."
Thomas said Tuesday, "It would be a lovely benefit if we were rolling in dough when anything's possible, but with the fragile situation that the utility is in, our economy is in, and GERS is in, the legislation is not a fiscally responsible decision."
Thomas said he has had his staff searching to find another utility anywhere that has a similar retirement benefit. At a WAPA board meeting earlier this year, he had said that, "Nowhere in the civilized world does such a program exist." On Tuesday he said, "We were anxious to see if one existed, but we couldn't find anywhere else that it has been done."
He added: "Everybody is aware that WAPA is struggling with cash flow; we're on the very edge. The money we are getting from the government's past due account goes 100 percent for long-term debt-related issues and maintaining rates at the current level. If we hadn't gotten the money exactly when we got it, we would have had terrible problems. Because we did get it, we no longer have a 'qualified' audit."
As far as the government's payment of its past-due accounts, he said, "We are hopeful we will have everybody current by Nov. 15."
Thomas said Laurence Bryan, GERS administrator, has claimed the hazardous-duty benefits legislation would pave the way for possible bankruptcy of the retirement system in years to come.
Turnbull vetoed the measure in August, saying he could not support legislation that would negatively impact the GERS. In a letter to Senate President Almando "Rocky" Liburd covering the veto action, the governor wrote, "The intent of this legislation is admirable, and the Legislature has seen fit to appropriate $1.9 million ... to fund the mandate." However, he said, GERS had said the amount was inadequate, given actuarial calculations showing a current 6.63 percent deficit in pension contributions vs. payouts.
Turnbull also chided Liburd, reminding him that senators had been told at a July Finance Committee meeting of the possible deleterious effects the legislation could have on the GERS.
The Senate and GERS have a history of go-rounds regarding retirement funding and the system has a court case pending against the V.I. government regarding funding. The new legislation is projected to increase the system's unfunded liabilities by $1.9 million. Neither Bryan nor any other GERS officials was available for comment Tuesday morning.
Sen. Vargrave Richards, a consistent opponent of the measure, said Monday, "The $1.9 million would be a substantial increase in the unfunded liability in the fund. We've compromised the GERS system through a series of bad legislation to the tune of a $500 million, and still growing, GERS deficit. Frankly, we are talking about the pension plan for all employees of the government every time we undermine the system. We've been given warning that not enough money is being contributed to the system, and with the market slump, this is a swift way to deplete GERS investment accounts."
Richards added, "It's important to understand the integrity of the system. We've done nothing to maintain and sustain it. We may be emotionally attached to this measure, but the reality is this system is one day going to come home to roost. While I support the idea of hazardous-duty pay, I cannot support it now."
Sen. Alicia "Chucky" Hansen succeeded in getting the override on a bit of parliamentary maneuvering around the "closed rule" in effect on all the bills the full Senate is hearing in a three-day session scheduled to continue through Wednesday. When the close rule is invoked, there can be no amendments to a bill before it is put to a vote.
The override passed on a 11-3 vote with Sens. Lorraine Berry, Roosevelt David and Vargrave Richards voting against the measure. Sen. Adelbert Bryan was absent.
Cash flow, fairness are barriers to business plan
In other comments to the Source Tuesday, Thomas expressed reservations about a proposal put forth by leaders of the territory's private sector on Friday as one of numerous steps to help the hospitality sector get through the economic crisis it is facing because of the drop-off of tourists in the aftermath of the mainland terrorist attacks. The hotel associations and chambers of commerce have asked that WAPA allow businesses to defer their WAPA bill payments for four months. They have proposed a similar reprieve from paying gross receipts taxes.
"We are doing something right now that might help a number of businesses and hotels that have been producing their own water and power -- to get them on our system at reduced rates," Thomas said. "We are investigating energy-conservation plans and doing things internally that might help. The only problem is that we have cash-flow problems of our own. More than 50 percent of what we receive goes to pay our fuel bill each month."
Further, he said, "The other thing is the fairness issue. We got an earful when it became clear how much the government owed us. I've ordered electricity turned off over much smaller amounts." He said he understands the hospitality industry's problem but added, "We will have to be creative in what we do to help."