Financial Heads Oppose Bill They Say Bypasses Procurement Rules

Jenifer O’Neal testifies Tuesday. (Photo by Barry Leerdam for the V.I. Legislature)
Jenifer O’Neal testifies Tuesday. (V.I. Legislature photo by Barry Leerdam)

Jenifer O’Neal, director of the Office of Management and Budget, and Clarina Elliott, executive assistant commissioner at the Department of Finance, had a long day at the Senate Committee on Finance Tuesday as senators debated bills on funds for capital improvements, funds for senior centers and procurement procedures.

The first bill they testified on was called the V.I. Government Prompt Payment Bill and the last bill they were questioned about was one to create a St. Thomas Capital Improvement Fund. In between a bill transferring money to fund projects at the territory’s senior centers was debated.

The officials from the executive branch were not often in support of the legislators’ designs.

O’Neal and Elliott testified that the executive branch was already trying to speed up the process of paying vendors.

“While I understand the intent of the bill, I must state for the record that based on the realities I’ve seen, the issue with payments to vendors is not at the end or at the Department of Finance level,” O’Neal said. “It is instead at the beginning where departments and agencies obtain goods and services without first having gone through the proper procurement procedures. These procedures are obtaining quotes, generating a purchase order to encumber the funds, taking delivery of goods and services, obtaining an actual invoice and then processing for payment. When the procurement guidelines are followed, I have found that there is very little delay in payments being made.”

She said the proposed bill would allow a vendor to be paid without a proper invoice and this was against proper financial practices. Another problem with the bill, she said, was “the legislature should not dictate payment terms of a contractor to a subcontractor.”

Sen. Allison DeGazon disagreed, saying under the current situation she has been embarrassed because vendors who had not been paid for two years were asking her to get something done.

Elliott said something was being done. She said, as the result of an executive order by Gov. Albert Bryan Jr., “All government departments and agencies are undergoing training on procurement and contract management. Steady and significant improvements for government procurement have already been achieved through the detailed reporting and updated responsibilities established.”

Sen. Janelle Sarauw also did not appear convinced. She said, “We are forced to write legislation because the executive branch falls short.”

DeGazon said when small businesses are not paid it puts them in a “precarious” situation.

Elliott said part of the problem in late payments was the lack of liquidity. Sen. Kurt Vialet said if the executive branch would collect on things such as the $3.3 million owed because of bounced checks, there would not be a cash flow problem.

Sen. Donna Frett-Gregory said, “We have a collection problem.”

Sarauw said the situation could be improved if the government was able to collect payments online.

“Government entities, particularly the V.I. Water and Power Authority, do not allot grace periods. The government should be held to the same standards of payment expected of its businesses and residents,” wrote Ryan Nelthropp, chairman of St. Croix Chamber of Commerce board, in support of the bill.

The bill was held in committee for amendments.

Collection was also debated during a discussion on the Time Share Act. Presently, it is estimated that over three-quarters of the property tax for timeshares goes uncollected. The bill would streamline the process for billing for taxes by sending the bills to timeshare associations instead of billing individual timeshare owners. The question remains whether the government should go after three years of back taxes or go back as far as 2010 to try to collect taxes from the associations.

Vialet said the bill which was forwarded to the Rules and Judiciary Committee would “officially close the loophole” that stopped the government from collecting these taxes.

Michal Rhymer-Browne, assistant commissioner of the Department of Human Services, with oversight of the Division of Senior Citizens Affairs, testified against a bill that would take “$300,000 from the Senior Citizens’ Center Revolving Fund … for the general upkeep of the Richmond Senior Center on St. Croix, the STRIVE Senior Center on St. Thomas and the Adrian Senior Center on St. John and the sum of $500,000 to be equally divided for general upkeep among Herbert Grigg Home for the Aged, Queen Louise Home for the Aged and the Lucinda Millin Senior Citizens Home.”

She said the money had already been budgeted elsewhere.

Sen. Steven Payne Sr., who sponsored the bill, said money had been sitting in the Senior Citizens’ Center Revolving Fund for over a year and no one was using it. He said the intent of the bill was to make sure all available money was being spent on seniors.

The bill was held in committee.

The final bill the committee considered would create the St. Thomas Capital Improvement Fund. The money would be expended exclusively for capital improvement projects and for road maintenance on St. Thomas. It specifies an annual appropriation of $1.5 million from the Internal Revenue Matching Fund.

O’Neal told senators that she and Elliott were not against creating the Capital Improvement Fund, but were against the appropriation being from the Internal Revenue Matching Fund.

St. Croix and St. John already have similar capital improvement funds.

Sen. Frett-Gregory said the creation of the fund for St. Thomas was “a long time coming.”

The Finance Committee also forwarded that bill to the Rules Committee.

Attending the hearing were Sens. Vialet, Marvin Blyden, Oakland Benta, DeGazon, Dwayne DeGraff, Frett-Gregory and Sarauw.

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