July 17, 2003 The second opening day of the Fiscal Year 2004 budget hearings before the Finance Committee Thursday was a charm. Things got off to a smooth start with all agency heads appearing willingly and on time.
The committee chair, Sen. Adlah "Foncie" Donastorg, called a halt to the initially scheduled hearings at the first session, on July 7, when the executive branch personnel scheduled to testify failed to appear. At that time, Donastorg said he would subpoena all 71 of those on his list of department and agency heads.
That turned out not to be necessary Thursday. Starting the morning's testimony were Joanne U. Barry, director of the Personnel Division, and Karen Andrews, chief labor negotiator. Barry said she was happy to appear at Donastorg's invitation and did not need to be subpoenaed.
The hearings have begun without Gov. Charles W. Turnbull's proposed FY 2004 budget for the executive branch in hand. By law the budget was due May 30, but Turnbull said he would hold off submitting it until the Senate acted on his proposals to address the FY 2003 fiscal crisis, including his plan for the territory to borrow another $235 million on the bond market.
On Monday night he signed several new and increased tax measures into law, and on Tuesday the Senate authorized the bond issue. Since Monday, however, the governor has been hospitalized for treatment of a bleeding ulcer, and there has been no announcement as to when he will be released or return to full-time work. (See "Turnbull still in hospital for monitoring, rest".)
Barry — and the day's other witnesses — noted that, in the absence of the governor's budget, their proffered documents should be considered working papers. For FY 2004, she asked for a budget of $2,680,855, which is $3,871 more than the division's FY 2003 appropriation of $2,676,984. The lion's share of the requested budget is $1,589,573 for personnel services. Barry said the division has 42 employees.
Included in the Personnel budget are three positions with salaries totaling $112,502 to be funded from the Indirect Cost Fund. Donastorg asked whether the Office of Management and Budget had the authority to pull money from that fund.
Barry said she reduced her staff by three positions this fiscal year to accommodate the mandatory 10 percent funding cut in all agencies ordered by the governor earlier this year.
Sen. Louis Hill asked Barry about what he called the popular concept that the government has a "bloated" payroll. Barry said she doesn't think that is the case. She said there were 11,568 employees in the executive branch when she came on board in 1999 and that as of last month there were 9,899.
The Legislature employs a staff of 288, according to Simon Caines, executive director, and Territorial Court employs 250, according to its human resources office. This would bring the total government payroll to about 10,437.
Hill asked if Barry could use more money to run an efficient government personnel merit system. Barry said she would rather have the funds for the division's automated systems.
Andrews told the senators that within the government "wages are totally out of control." She also said she needs an assistant to run cost analyses while labor negotiations are going on. Asked by Hill about unions coming to the bargaining table with wage demands, Andrews replied: "They don't know what it will cost, nor do they care."
Barry said Personnel's computerized Notice of Personnel Action, or NOPA, system is nearing completion, touting it as the division's major accomplishment for FY 2003. The system — called ePAAS, for Electronic Personnel Action Approval System — is a speedy replacement for the notoriously slow NOPA paper-shuffling process which has slowed government hiring, and in some cases functioning, for years. The process is almost totally computerized now, she said.
Barry said in May of 2002 that she had chosen the Planning and Natural Resources Department as the pilot agency for the project (see "Notorious NOPA's entering the electronic era"), and she reminded the senators of that on Thursday. "Now, the government can process that department's NOPA's electronically," she told the committee.
The overall conversion entails a "vast amount of collaborative effort, which will continue to take thousands of man hours to gather the data necessary for implementation," Barry said. She said she hopes the data entry will be completed by 2005.
Andrews' requested FY 2004 budget of $413,902 is nearly 6 per cent below her office's FY 2003 appropriation of $437,668. Personnel costs account for $283,000, or 68 percent of the budget. And $16,132, or about 4 percent, goes for paper and copier and fax equipment, owing to the "inordinate" amount of paper used in contract negotiations, she said.
While bringing employees on step has effectively frozen the growth of the government's retroactive salary obligation, Andrews told the senators, the balance due remains a "considerable" $368 million. Meanwhile, she said, a new line of retroactivity is accruing: Four contracts negotiated with an effective salary date of Oct. 1, 2002, haven't been implemented because there is no sustainable revenue source available to fund them.
Andrews said the administration's "options are few" as far as future contract negotiations. Those she cited were to "continue to schedule contract negotiations with the 13 remaining units, irrespective of the government standing, or put negotiation on hold pending an upturn of the government's financial picture." She said her office chose the latter, and contracts are "immediately suspending on a temporary basis."
Andrews' No. 1 objective for FY 2004 is to fund the four negotiated union contracts — with the International Association of Firefighters and the International Association of Firefighters Supervisors. The unionized firefighters sued the government in Territorial Court in March seeking a restraining order, but the case was thrown out.
Paulette Rabsatt, chair of the Government Employees Service Commission Health Insurance Board, was scheduled to appear before the committee after Barry and Andrews. The Office of Veterans Affairs and the Office of the Inspector General were to be heard Thursday afternoon.
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