A dispute between the V.I. Water and Power Authority and the Government Employees Retirement System came to a head Friday when GERS board members alleged that WAPA officials are withholding their employees’ contributions and keeping them for themselves to cover operating expenses.
During a board meeting on St. Thomas, GERS Administrator Austin Nibbs said the system has not received contributions from WAPA for its employees since the Feb. 2 pay period, leaving the authority with $5 million outstanding to GERS. Nibbs said that WAPA has not paid because officials contend they have a credit for some employees who were paying in 10 percent instead of the regular 8 percent.
Nibbs said that he has been back and forth with WAPA’s Executive Director Hugo Hodge Jr. about the issue, and that both sides had agreed to do a reconciliation of what is owed.
"We did a reconciliation of what they owed us, and what we thought the credit should be and sent it to them," Nibbs said. "They said they were going to be doing their own reconciliation, and I asked Mr. Hodge many times to let us know what it is and he hasn’t responded. That was back in January, February, and here it is now, more months have been building up."
Asking the board for guidance, Nibbs wanted to know if GERS should look into suing WAPA for its money. Nibbs said that with other agencies, GERS’ policy is to send them a letter about the amount outstanding. Oftentimes there is a cash flow issue, but the agencies would usually make a commitment to pay and take care of the receivable later on, Nibbs said.
He said that GERS last sent a letter to WAPA around July 11, has gotten no response or commitment to pay, but has heard from WAPA employees that the lack of payment is due to a cash flow issue.
Questioning where the money for the employee deductions were going, some members said that it is possible WAPA is keeping it to cover operating expenses.
"You’re saying that we’re not receiving both the employer or the employee contributions and that none of the money is being deducted from the employees’ paychecks," said GERS Board of Trustees member Edgar Ross. "But at least the employee contributions should be submitted timely. It could be that they’re paying the net amount to the employees but using the rest for other purposes."
Ross suggested that GERS put WAPA’s board on notice that the system will file suit if the money does not come in soon.
WAPA’s Communications Director Cassandra Dunn said Friday that the authority hopes to meet with GERS officials soon to settle the dispute.
"We are aware of a pending balance that we have with the GERS," Dunn said. "We also know that they also have significant outstanding balance for the overpayment in contributions to GERS. We have had preliminary conversations with them, and we hope to meet with their officials soon again to come to a settlement on both balances."
Dunn said WAPA has continued to withhold the employees’ contributions but is not using it for operating expenses. WAPA is holding the money until a settlement is reached since there is still an issue about how much WAPA has been overpaying in contributions, she said.
Board members also discussed the increase in retirement and resignation letters coming in from employees with 30 or more years of service who are opting to take the $10,000 early retirement incentive being offered by the government. The incentive is included in a recently enacted law that was supposed to help alleviate the government’s fiscal year deficit, but has instead, according to GERS officials, backfired and put GERS in a financial bind.
Nibbs said Friday that while he did not have an official count of how many letters had been sent in, he has been receiving several phone calls from younger employees asking for advice about whether they should take the money, or choose to stay on and pay an extra 3 percent into the system.
"It appears that there are a lot of people going out," Nibbs said.
The deadline for employees’ letters to be in is Aug. 15, but GERS has to process all the paperwork by Sept. 30, while doing training for its employees and getting a new financial system in place for the beginning of the new year, Nibbs said. He said some of the staff have been working overtime, including staying late in the evening and coming in on weekends.
During Friday’s meeting, the board also approved:
- consolidating the insurance policy for Havensight Mall with GERS’ policy since the policy for the mall, which is under the West Indian Co. Ltd., has expired;
- setting up meetings for Sept. 12 and 13 on St. Croix for presentations from the five firms selected as finalists for the position of investment consultant to the board.
Board members present during Friday’s meeting were Carver Farrow, Raymond James, Vincent Liger, Ross and Leona Smith. Board members Wilbur Callender and Desmond Maynard were absent.
