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Tuesday, February 7, 2023
HomeNewsLocal governmentGERS Board Not Ready to Issue Loans

GERS Board Not Ready to Issue Loans

Two warehouses owned by GERS in Havensight on St. Thomas have been demolished in a renovation project. (GERS photo)

Dwane Callwood, chair of the Government Employees’ Retirement System Board of Trustees, said Thursday that a proposed Senate bill to initiate a lawsuit against GERS was not a concern.

The bill proposes to take the board to court because it has not restarted the loan program shut down in August 2015. In May 2016 then Gov. Kenneth Mapp signed into law a bill saying GERS must restart its personal loan program on a limited basis, for one year, lending as much as $20 million.

The small amount and limited term were meant to enable GERS to resume the popular lending program without adding to its financial difficulties, on the theory that those loans would generate income and would be paid back before the system collapsed.

But GERS representatives through the years have cited the precarious financial situation of the system and have not reinstituted the program. Board member Nellon Bowry, also speaking at the Thursday board meeting, said, “The same conditions still exist.”

The government instituted a plan in February to keep GERS solvent by using funds generated by rum taxes; GERS trustees remain cautious.

Trustee Leona Smith said, “A lot of things could happen.”

Bowry said the bill proposed by Sen. Kenneth Gittens should not be ignored. He suggested the board set forth the details of the financial situation the board wants to achieve before reimplementing the loan program.

Callwood said, “We don’t have an issue with re-instituting the program, we are just not in a position to do it now.”

The board has made public its intention to institute the program on a limited basis in October of 2024 and completely in 2025.

The treasurer’s report showed November as what has been normal for the last decade — revenues falling short of disbursements by almost $20 million during the month.

The year-to-date figures, however, tell a different story. The balance sheet shows an income of $128 million more than disbursements. That figure includes $157 million the system received from the rescue plan.

Pedro Williams, whose contract as legal counsel for the board was renewed for the upcoming year, said the worst-case scenario would be the courts found the board to be in contempt, and board members could be fined and spend 30 days in jail. However, that could only happen if the judge did not find the board’s justifications reasonable.

Callwood and Executive Director Austin Nibbs have been invited to testify on Gittens’ bill on Dec. 29. The bill had been on the agenda for the Dec. 20 Senate meeting but was one of the items not reached before the meeting recessed. Attempts were made by the Source to get comments from Gittens about his bill.

Rent collection from businesses in Havensight Mall showed a steep increase, from $238,000 to $592,000.

In Nibbs’ report, he mentioned the demolition of two warehouses at Havensight had been completed. He also reported that from Oct. 1 through Dec. 15, the number of retirees added to the rolls was 54 while the number of those retirees deleted was 71.

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