The miseducation of Mr. Fletcher

Editor’s Note: The following is the text of a letter the author sent to House Speaker Joseph P. Deleon Guerrero and Senate President Ralph DLG. Torres on March 25, 2014. He requested for its publication in the Saipan Tribune. Due to its length, it is being published in two parts.

Second of a two-part series

Office space, locations, and furnishings

Mr. Fletcher points out again, that these occurred before he became executive director and that he supports these decisions because CUC is running a $100-million-a-year operation. Really! Again, he states the CUC has been able to improve operational efficiency and improve the administrative facilities, all for less money than CUC was paying before. I just wonder if any of these savings from the efficiency and improvements can be passed on to the consumers?

Mr. Fletcher points out that the Dandan lease agreement was renewed. The former lease amount was $21,870 per month for about 23,000 sq. ft. The new lease agreement now is at a cost of $13,884 per month for 25,711 sq. ft. So as one does the math there is a saving of $7,986 per month while realizing additional square feet area of 2,711 sq. ft. So with this savings per month with added square footage, were the savings passed on to consumers?

Mr. Fletcher also points out that CUC made a solid business decision in the transaction. I just wonder whether Mr. Fletcher understands that the line crew are at best 80 to 95 percent of the time not utilizing these office spaces and could have remained at Dandan building for meetings and briefings before the day begins. With the additional 2,711 sq. ft. of space, this will be more than ample area for such meetings and briefs. This was solid decision alright.

Mr. Fletcher states that furnishings or 66 percent were used and hardly would be called “lavish.” These furnishings were purchased from “furniture liquidation companies.” Furniture liquidation companies? I did not know there was such a company on island. I wonder if Mr. Fletcher can advise us to where these companies are, as I’m sure CUC customers are inquiring by now.

Nepotism

Mr. Fletcher states that the allegations of nepotism is false and unsubstantiated. Did Mr. Charles “Chuck” Warren, your CFO at CUC, sign off on his wife’s personnel action? Fletcher claims that he did not order or even request Warren wife’s immediate supervisor or manager not to have Mrs. Warren work during weekends because it was family time. Should the committee on PUTC hold a subpoena hearing where you, Mr. Warren, and others are sworn in to tell the truth and nothing but the truth?

Failure to terminate employee

The simple fact of the matter is that the employee in question was found guilty by a court of law and to this day remains on the payroll of CUC. How then does this look to the other employees within CUC? Clearly, Public Law 16-17 was very clear on provision, Article 5, Section 8154 (4 CMC sec. 8154). This specific sections states: “Civil and Criminal penalties. A member of the board, officer, counsel, employee, or agent of the corporation, or any other person who embezzles, abstracts, or willfully misapplies any money, funds, credits or securities of the corporation, or who does any other act with intent to injure or defraud the corporation, or who accept any unlawful consideration which relates to his duties under this chapter, or any individual who, with like intent, conspires with, aids, or abets any person in any violation of this section, shall be dismissed from employment, permanently barred from reemployment with the corporation, civilly liable for any losses that their actions caused the corporation, fined not more than $2,000, imprisoned for not more than five years, or both.”

For some reason, this law was not followed. CUC has in-house legal counsels such as Mr. Sirok and Ms. Fisher and maybe others who earn supposedly $114,999 per year, but you left this up to the assistant AG. Why?

Mr. Fletcher claims in his letter to me dated Jan. 15, 2014, that he had made the Attorney General’s Office aware of 4 CMC Sec. 8154 but yet the employee was prosecuted under 6 CMC Sec 1609. As the executive director, this incident transpired not prior to Fletcher becoming executive director. Why did he sit back and watch as an individual stole services from the corporation? Why is this person still getting paid a salary?

Telesource change order No. 5

Again, Mr. Fletcher responds by saying that this agreement was made prior to his becoming executive director. What is before the commission (CPUC) now is how this change order No. 5 is to be financed. You guessed it. It will be coming in the form of another rate increase to CUC customers. What strikes me is the fact that when the CPUC public hearing was made, Mr. Fletcher and Mr. Warren were silent on the issue. This only confirms that they were in favor of this financing to pay Telesource and were not acting in the best interests of the customers of CUC.

Water and wastewater electric charges

Mr. Fletcher denies that the water electric charge is twice the actual water usage charges. Mr. Fletcher should go to his own website at www.cucgov.org and look at your rate table for water. It states in part at the top the following:…the new Water Electric Charge will be $3.72 per 1,000 gallons, increased from $3.54, effective March 5, 2013.

Now if you go down on the same page to where it says Volume Rate Per 1,000 Gallons,

Residential & Commercial

0-3,000 0.72
3,001-15,000 1.74
15,001-30,000 2.68

So let’s say that a customer was billed for water at a 10,000 gallon usage. 10,000 water usage times $1.74 equals $17.40 (10 x $1.74 = $17.40).

Now for water electric: It will be 10 x $3.72 = $37.20)

And yet he still denies that it is twice the amount for water usage vs. water electric? The schedule of Water Charges and Rates are right there on the CUC website. Fletcher should read it!

By the way, the Guam Waterworks Authority charges a flat rate for residential sewer (wastewater) of $26.61 per month. CUC charges about the same for water usage and sewer charges. Again, you can go to www.guamwaterworks.org

So in closing, it appears that Mr. Fletcher is trying to wash his hands by denying each “whereas clause” of H.R. 18-15 but let me provide some points the Mr. Fletcher should consider before I close.

n The buyback of PMIC (Power Plant 4) was supposed to save CUC because now CUC will not have to purchase fuel on a regular basis. So where is the savings?
n The planned 4-year, $75 million per year ($300 million) fuel purchase. Is CUC really going through with this? Is CUC really trying to tie the CUC consumers to this contract? Doesn’t CUC have any alternative plans to replace the diesel engines with a more efficient baseload plant?
n CUC appears to favor Change Order No. 5 to finance this change order as approved by the former lone commissioner of CPUC. Why? Does CUC know that this will again require a rate increase?
n CUC recently renewed the contract for its CFO. Why was he also given a salary increase pursuant to his contract being renewed? Isn’t he already making over a 100K per annum? Is this why rate increase petition continue—so that the upper management and its consultants such as economist.com can be paid and given a lucrative contract? And by the way, why do we still have economist.com? Isn’t CFO Chuck Warren capable of handling the financial affairs of CUC?
n The departure of Mr. Wallon Fong Young a few months ago. What made Mr. Young leave CUC? Was it because he wasn’t included in the Integrated Resources Plan discussions? Who is better than Mr. Young, who has extensive knowledge and expertise in the area of power generation and transmission? Is it Alan Fletcher? Is it Chuck Warren? Is it the governor? May I remind you that Mr. Young and the hardworking people of the power plant division single-handedly turned the Power Plant 1 engines to where it is now. I am now afraid that we may be going back to the 2008-2009 era of blackouts and brownouts if we continue forward the next four years.

In closing, I just want to state that under Fletcher’s management style, less customers will be able to afford the cost of both electricity and water/waste water. Yes, CUC customer base will shrink and then what will you do? Petition CPUC to raise rates, again? (Francisco Dela Cruz)

Francisco Dela Cruz is a member of the House of Representatives of the 18th Legislature.