In July, when the Connecticut Port Authority’s financial and administrative problems surfaced, the CEOs of the state’s 17 quasi-public agencies convened their first monthly meeting to exchange ideas about how best to run their organizations and avoid the pitfalls of port authority.
“One of the things that I realized very quickly at the first meeting was they’ve never been in room and talked about shared experiences, talked about the role of quasis in the state of Connecticut or talked about how their entity fits into the fabric of the state, but also the overall agenda of the governor and the legislature,” said Paul Mounds, Chief Operating Officer of the Office of the Governor, in a phone conversation with CT Examiner on Monday.
The meetings began at the request of the Office of the Governor in an effort to share lessons learned from the port authority’s issues, said Mounds. The meetings are held on a rotating basis at each agency’s headquarters, allowing the quasi-public leaders to talk about how they can work together and use shared resources, experiences and information to enhance each agency’s work.
“It takes them out of functioning as separate silos and has them functioning as an organizational group,” said Mounds, appointed by Gov. Lamont to convene the quasi-public collaborative meetings.
But, collaboration has not been the norm for some quasi-publics.
Working solo was built into the legislation that created the Connecticut Port authority in 2014. For the first two years, the agency operated under the Department of Economic Development. Then, in 2016, fulfilling the legislative language that created the agency, the port authority was set free to operate on its own, and that’s where the problems began, Mounds said.
“The legislation basically says that they were to be cut off from that and be alone and obviously what we’ve seen from the learning lessons of the port authority, they weren’t ready to stand up on their own,” said Mounds. “You could obviously tell because of all the administrative policies that weren’t in place and other policies that weren’t adopted, they weren’t ready to fly.”
The ramp-up, foundational period is particularly critical for new quasis and it cannot be assumed in the legislation that an agency will be independent after two years, but that concept represents a huge change in the state’s philosophy, said Mounds.
“That was a learning lesson from the port authority. As we have some new quasi-publics that have to stand up, we’re not going to go down the same path,” Mounds said. “It’s not a matter of creating them and letting them run on their own, it’s about creating them and being there along the way.”
The state created two new quasi-publics this year — the Paid Family and Medical Leave Insurance Authority and the Connecticut Municipal Redevelopment Authority — and Mounds said the administration did not want another new agency to be put in a similar situation to the port authority.
“The thing that we want to do from an administrative point of view is once they’re created, it’s in our best interest to make sure they have the right resources and technical assistance to fly — and that became almost a rallying call in our quasi-public CEO meetings,” Mounds said.
Port authority lessons
Mounds said the testimony from the port authority staff at the Dec. 4 Transportation Committee hearing, especially from former executive director Evan Matthews, showed the state needed to create a mechanism for agencies to ask for help when needed.
“Evan Matthews saying, ‘We were fearful for our line item,’ should not have been a reason for not raising your hand and saying, ‘Hey, Connecticut Green Bank, you just got started, how did you do that?’ It shouldn’t have been an excuse to not reach out to executive branch or to the legislature,” said Mounds. “The beauty about the meetings that we’re having right now is that it won’t allow for that excuse to remain current.”
The Office of Policy and Management’s plan — presented at the Dec. 4 hearing — to oversee and restructure the port authority’s finances is part of the state’s process to correct the identified problems.
However, the Office of the Governor’s overall goal during the upcoming legislative session will be to “solidify a process that will allow us to be able to right the ship when issues arise,” especially in working with the quasi-public agencies’ boards, said Mounds.
“As of right now, the focus is to introduce legislation to solidify the process they’ve used with port authority,” said Mounds. “There could be modifications and changes, but from a governance standpoint, allowing the boards to make the necessary outreach to the administration as part of their growth pattern or to make changes is something that we will look forward to solidifying.”
In other words, the legislation will create an official pathway for a quasi-public agency board to ask for help.
“The testimony from Evan Matthews has really stuck with me, thoroughly, and while I think some would say, ‘Okay if there’s a problem why don’t you raise your hand?’ The other part of me says you need to create a mechanism,” Mounds said. “It’s understanding that quasi-publics are still functions of a board — what is the empowerment of the board and the relationship with the executive branch to be able to deal with these issues.”
One quasi’s experience
Bryan Garcia is the CEO of the Connecticut Green Bank, a quasi-public agency established on July 1, 2011 by the Connecticut General Assembly that uses public dollars to attract private capital for clean energy projects. The bank is capitalized by a $.001/kilowatt-hour (kWh) surcharge to households’ electricity rates that results in a surcharge of about $10 per household annually. The organization evolved from the Connecticut Clean Energy Fund and the Clean Energy Finance and Investment Authority.
Garcia said his experience in setting up the bank as a quasi-public was very different from the port authority’s because it took place amidst “reinforced and built connections” with other quasis, including Connecticut Innovations, which administered Clean Energy Funds.
“We were essentially administered by CT Innovations in the early years, so we understand the benefit of shared services. We shared IT, marketing, HR departments, and CI was an incredible help to us getting off and running when legislature created us in July 2011,” said Garcia. “And we had the benefit of a checklist that CI was already administering us that a new quasi-public like the Connecticut Port Authority didn’t have.”
The recently-established monthly meetings have fostered a new collaborative spirit that will help lift new quasi-public agencies, he said.
“If somebody new comes in, it’s incumbent on all of us to help that new quasi get off the ground,” he said.
Bringing together the quasis’ CEOs at the meetings may reveal crossover opportunities among the agencies, he said.
“The CEOs are responsible for implementing the board’s mission and vision for the organization, so it’s good that Paul and the governor have convened us because we play an important role in direction of quasis,” Garcia said. “What’s unique about quasis is that we’re designed to be responsive to the needs of markets, so if there’s an opportunity for healthcare and energy to work together it’s going to happen much faster between a partnership with Access Health CT and the CT Green Bank than it would for a state agency to figure it out.”
“I think the best way to develop a relationship and the best way to develop results is to set expectations … at the beginning of the relationship and that’s what the governor and our office has done,” Mounds said.
He said the problem with the port authority was initially identified as structural and part of the solution was to audit the agency from three standpoints — the state’s auditor, Blum & Shapiro, and Whittlesey, an accounting firm in Hartford. But, he said, the answers require going broader and deeper.
“I’ve always been of the mindset, if you have the right structure you have the right results, so now we’re getting the structure right … But instead of just saying what’s the problem based on the audit from legislative auditors, let’s go deeper. having the ability to start asking some deeper questions in the Whittlesey audit that will come out that is different from what the legislative audit asked,” he said. “And that has led us to having these CEO meetings, having these learning lessons, having the ability to share information.”
The port authority’s issues have focused the administration on getting people out of separate silos and into a collaborative mindset, which will lead to positive results, said Mounds.
“As I said, if there’s a good that has come out of the process with the port authority, it’s this,” he said.