‘CUC ended up replacing whole tank’

Vincent S. Aldan

Rep. Vincent S. Aldan (Ind-Saipan) has disclosed that when they were doing the transition report pertaining to the Commonwealth Utilities Corp., they found out that one of the three water tanks that was damaged during Super Typhoon Yutu in 2018 just blew a cover at the top, but CUC ended up getting a grant to replace the whole tank instead of just replacing the cover.

At a joint hearing by the Senate and House of Representatives’ Public Utilities, Transportation, and Communications committees Thursday, Aldan, who chairs the House PUTC Committee, said one of transition team members looked into the water tank project and it was discovered that the cover of one of the tanks was blown off during Yutu.

Aldan, who also served as leader of the transition team at CUC, said when they came out to assess the project, it was determined that all they needed was to replace the cover.

“It’s probably going to cost $100 or something like that instead of the million-dollar-tank that we got,” he said.

At the joint session, Northern Marianas Housing Corp. corporate director Jesse S. Palacios said for CUC’s three water tanks replacement project, the total allocation from the Community Development Block Grant-Disaster Recovery grant agreement is around $20 million for all three tanks combined.

Palacios said two water tanks are located in Kagman and Dandan on Saipan, and one on Tinian.

Aldan and Senate PUTC Committee chair Sen. Paul A. Manglona (Ind-Rota) presided over the joint public hearing on the status of projects under the $243.9-million CDBG-DR grant agreement.

Aldan said that, at the same time last year, the U.S. Environmental Protection Agency awarded CUC $21 million for their water and wastewater project.

Aldan wonders if these two grants are going to be doing the same water tanks project, or is this additional $21-million funding for the water and wastewater projects that CUC has under the federal court-stipulated order.

Northern Marianas Housing Corp. CDBG-DR program manager Kimo Rosario said CDBG-DR funds, just like any other federal disaster recovery funding, is subject to Section 312 of the Stafford Act, which prohibits the duplication of benefits.

Rosario said it is CUC’s responsibility to inform NMHC when they receive funding that covers the same project. Otherwise, Rosario said, if they fail to inform them, NMHC needs to recoup or recapture those funds, because CUC would be in violation of Section 312. He said it’s in the intergovernmental agency agreement.

“So I would hope, or we would hope, that CUC will report receiving additional funds if it pertains to the same project,” Rosario said.

Aldan noted that CUC was granted $21 million by EPA last year and that these three water tank projects amount to $20 some millions as well.

Aldan describes it as an overlap is NMHC already gave CUC $20 million for the water tanks replacement project, but CUC did not report that they also got $21 million from EPA for the same project.

Aldan said if CUC does not have that $20 million in their account to pay NMHC back, then that means the rate payers have to cover that as well.

Rosario said he just want to be clear that it’s only specific to the CDBG-DR funded projects.

He said if it’s a separate project pertaining to water, wastewater and irrelevant to NMHC, then they don’t need to pay that back. But if it pertains to the three water tanks replacement, any one of the three, or all three tanks, then CUC can be subject to the recapture of those funds.

With the information they got at the session, Rosario said they will seek clarification from CUC if that EPA grant was awarded to them because NMHC is also duty-bound to ensure that there are no duplication of benefits.

If CUC did violate federal regulations, would that prevent it from availing of other grants in the future? Palacios said they had issues with other government agencies before and they actually blacklisted those agencies that do not follow the policy or violate these conditions.

“No matter how important that project is, if they are not going to comply, it’s really not [going to] benefit anyone,” Palacios said.

He said their projects division personnel go out and do site inspection of projects.

Palacios also stated that when HUD officials came back in August last year, they brought them over to the Kagman Water Tank Project as well as the Dandan Water Project.

“So they did see firsthand what’s needed to be repaired or replaced,” he said.