Oct. 26, 2007 — All government departments will have to hurry up with their performance reports under a bill approved Friday in Frederiksted by the Committee on Government Operations and Consumer Protection.
The committee also heard testimony on two other bills but held them in committee for further consideration. One would make WAPA pay a portion of employer contributions to the Government Employees' Retirement System (GERS), a portion for which the central government is currently responsible. The second bill held in committee mandates WAPA to hire a third party to generate power using alternative sources of energy. The bill would also place mandates on that supplier, down to how many employees the company must hire and how much it must spend on charity.
Claudette Farrington, deputy director of the Office of Management and Budget, testified in support of the bill on performance reports, which changes the date government departments submit reports from Dec. 1 to Nov. 15.
A performance-based budget links annual performance goals with the cost of achieving targeted levels of performance, helping to increase government efficiency, Farrington said. The annual performance report is how the government judges performance.
"The changes required in this bill will allow OMB adequate time to collaboratively work with departments and agencies to analyze their performance measures and to conduct program evaluations to ensure program accuracy and accountability," she said. "This information will then be presented in one single report to the governor and the Legislature."
No one opposed the measure. Sen. Terrence "Positive" Nelson said he supports the measure, but wants the Senate to get the same performance reports OMB receives at the same time OMB receives them.
"I think it should be available to the Finance Committee as submitted, before being composed into one comprehensive report by OMB," he said. "I don't want OMB to massage it. I want to see the raw information."
Nelson proposed an amendment to that effect. The amendment and bill were approved and the bill forwarded for consideration by the Rules and Judiciary Committee.
Several previous acts of the Legislature offered early retirement benefits to WAPA employees in hazardous duty, expanded those benefits, and then expanded the categories of employees who qualify for the early-retirement benefits. In past years, the Legislature has appropriated funds to pay for the expanded benefits. The committee looked at a bill to put the entire cost of the mandates onto WAPA.
"The government of the Virgin Islands can ill afford to continue to pay an operating cost of (WAPA's)," Farrington said, speaking in support of the bill.
Joanne Barry, acting administrator of GERS, said the important thing is to fund the mandates the Legislature passes, whatever the source of funding.
"These payments, like all other unfunded mandates on the retirement system, add to the system's unfunded liability, now at $1.43 billion," she said. "We recognize that WAPA and the central government may disagree over who owes and should pay. … The bottom line is GERS just wants the money. "
The measure only affects a finite number of employees hired before 1986, Barry said.
WAPA was not opposed to the measure on principal, but wanted consideration for $18 million in outstanding government utility bills.
"I am not going to argue WAPA should not take care of its employees," said WAPA Executive Director Nellon Bowry. "We are taking care of them. The issue is these ad hoc changes in benefits. Having proposed an additional mandate and having funded it a few years, the government is now saying we are cash strapped. If you are going to impose an additional mandate, there has to be a way to fund it."
Bowry linked the proposed new expense for WAPA directly to the government's utility bills.
"If we were paid on time all the money the government owes us, we would be in a position to take on this additional burden," he said.
The argument persuaded some of the senators.
"I understand the intent of this bill," Sen. Alvin Williams said. "But still, at this time I cannot support it for many reasons. For the government to say to WAPA, 'We owe you millions of dollars, but we are asking you to pay this new expense,' I can't see it."
Committee chairman Shawn-Michael Malone asked Farrington when OMB would pay the government's past-due utility bills. Farrington responded ambiguously.
"A portion is from the central government and a portion is not," she said. "We have to do a detailed review to make sure the figures are correct. Right now we have to get information from WAPA and from every department of government, do an analysis and see what we can work out."
Bowry objected to this assessment.
"The issue isn't reconciliation of accounts," he said. "Juan Luis (Hospital) will tell you they just don't have the money to pay. If you cut 10 percent off the numbers, they still can't pay."
The bill was held in committee.
Last up for consideration was the Public Utility Energy Diversity and Economic Stimulus Act of 2007, sponsored by Sen. Norman Jn Baptiste. The bill purports to direct the Water and Power Authority to contract with a small power producer or co-generator on St Croix to produce power for WAPA. While ordering WAPA to find an alternative-power producer, the bill also says how many employees this company must hire, where the employees come from and what kind of jobs they will have.
The bill also requires any company agreeing to contract to sell power to WAPA to train local personnel to "establish related downstream industries and facilities that will become operational no more than three years form the effective date of the power-purchase agreement," and to give a minimum of $150,000 a year to charity in the territory. The bill does not mention any incentives or provisions that might help a company consider such a contract.
"This here is one of the initiatives we have to try to bring jobs and development to the territory," Baptiste said. "People need to be serious about finding solutions to our problems. I ask my colleagues to seriously consider this measure."
The intent of the bill was applauded by Bowry, WAPA governing board members, Public Services Commission members and V.I. Energy Office director Bevan Smith, but they all gave similar reasons they believe it to be counterproductive. The primary concern is that mandating the number of jobs created and other details of the contract would interfere with the goal of making energy less expensive.
"We believe strongly that it is counterproductive to mandate by legislation that all these objectives be accommodated by a transaction with a single entity," said Alphonso Franklin, vice chairman of WAPA's governing board. "The preferred strategy would be to allow WAPA, through the competitive bidding process, to obtain the lowest-possible electricity cost and let the lower cost attract economic stimulus and job-creation activities."
"The concept is encouraging," said PSC Commissioner M. Thomas Jackson. "But it appears to be economically unrealistic to any potential employer."
Smith concurred.
"The bill as proposed creates obstacles to renewable-energy development at the utility level in the U.S. Virgin Islands that doesn't currently exist," he said. "It really hurts me to go against your motion, Senator Baptiste. I support what you are trying to do. But I think it really hurts both objectives to put the two together."
The bill was held in committee.
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