CUC: Timeline ‘impractical’ due to lack of funds

Gov. Juan N. Babauta had given the Commonwealth Utilities Corp. a timeline to forestall a federal Clean Water Act action, but CUC declined the governor’s proposal, reiterating the firm’s limited resources.

In a Dec. 3 letter, Babauta gave the CUC board of directors 240 days to complete his recommended actions, which include the hiring of three new management officials, the commissioning of a financial management plan for the utility firm, and an adjustment in user rates or fees.

The timeline was earlier presented to CUC by the Attorney General’s Office in an effort to prevent a civil action from being filed by the U.S. Environmental Protection Agency against CUC for violations of the Clean Water Act.

“The Office of the Governor is willing to discuss methods by which CUC may comply with the [set] deadlines; however, variances from or extensions to the…deadlines are not options for discussion,” Babauta said. “The Office of the Governor will do everything within its means to assist CUC in its endeavors to come into compliance with federal law, and it will do everything within its power to make this happen.”

However, acting CUC chair Herman P. Sablan said the firm is unable to accept the deadlines set by the AGO due to its current financial problems.

“Whether or not a civil action is filed is beyond CUC’s control. What CUC can control, with your consideration and assistance, is its best efforts given its limited resources,” Sablan told Babauta.

He added that with money, CUC should be able to solve all its problems related to the Clean Water Act.

He noted that the Agingan Sewage Treatment Plant outfall project, for one, still needs substantial funds. The utility firm has been under EPA citation since 2002 because of CUC’s failure to complete the project.

To date, the request for proposals for the project has not been released due to lack of funds.

“Your office’s assistance in identifying funds for CUC’s wastewater projects, whether CIP funds or grants, would be greatly appreciated. We hope that CUC and the Executive Branch can find common ground to accomplish our shared objectives short of litigation, which would further drain our meager resources,” Sablan said.

According to Babauta’s timeline, CUC was supposed to have delivered to the governor draft job vacancy announcements for the positions of CUC chief executive officer, CUC chief financial officer, and CUC chief engineer by Dec. 8.

An alternative is for CUC to deliver a draft request for proposals to hire a qualified engineering/and or utility management firm or firms that can provide professionals that meet the requirements set by Babauta.

Babauta also gave CUC 30 days from Dec. 3 to deliver an interim financial management plan, as well as a draft RFP for the creation of a CUC financial management plan.

The final plan, he said, should include details of necessary financing over five annual budget periods for continued operation, maintenance and repair of the combined utility; and a detailed descriptive plan for raising enough revenues to meet projected costs.

Babauta said that within 60 days, CUC, with his approval, should have hired the management officials or the management firm.

He added that CUC should have awarded the contract for the creation of the financial management plan within 90 days and adopted a final plan no more than 180 days after Dec. 3.

Within 240 days, CUC should have adopted any increase or adjustment in rates or fees to comply with the findings of the final plan, Babauta said.