EPA: Loss of key CUC managers ‘alarming’

The Environmental Protection Agency requires within 30 days a report from the Commonwealth Utilities Corp. on how it will fill its soon vacant executive director position, among other critical senior positions left vacant for years.

This comes nearly a month after the CUC board asked executive director Alan Fletcher to resign.

It also comes more than a month after Fletcher stated his concerns to EPA over “fiscal and operational constraints” that threaten CUC’s operational stability and their ability to meet the requirements set by court stipulated orders.

He was referring to a “lack of political will” to implement an adequate rate base and an outstanding government debt of more than $30 million, among others.

In their June 2 letter to Fletcher and board chair Adelina Roberto, EPA writes that as of the expiration date of July 14—the expiration date of Fletcher’s contract—CUC will have vacancies in four of these eight senior management positions.

These positions are the executive director, deputy executive director, division manager for drinking water and wastewater, and the technical manager for oil.

EPA said these positions were meant to reverse longstanding compliance and public health issues “stemming in great part from the lack of qualified management operating the public utility.”

“The loss of qualified senior manager in half of the key positions is alarming,” Water Enforcement Section manager Ken Greenberg writes.

“Moreover, we understand that CUC’s board may be contemplating temporarily filling the executive director position with an individual who does not meet the required qualifications,” he said.

While Greenberg did not name this individual, it was earlier reported that this was IT&E engineering manager Velma Palacios, a previous candidate for the job.

“In view of these concerning developments,” Greenberg said, “EPA is requiring CUC and the board to submit within 30 days a detailed status report on its plan to solicit and fill—both on a temporary and permanent basis—these positions with managers meeting the specified qualifications.”

Executive director

“The executive director is the most critical position at CUC,” Greenberg said.

CUC’s top position is expected to be vacant before July 14, as Fletcher has stated his intention to take vacation days prior to this date.

Per stipulated orders, CUC is required to appoint an executive director within 150 days of vacancy.

The last time the position became vacant was in 2012, when former director Abe Malae resigned.

EPA is now asking that CUC provide them with a copy of the job vacancy announcement, position description, and details on the location and times when the position was advertised, as well as a list of candidates that meet stipulated order required qualifications.

“These qualifications are requirements, not guidelines,” Greenberg emphasized, adding that this is “to ensure the top manager at CUC has the background and experience necessary for the combined utility.”

The stipulated order requires, among others, that an applicant have at least 10 years of senior management experience in a similar wastewater, drinking water, and/or power utility, with similar or greater capital and operating budgets, capital improvement projects, human resource needs, utility financing issues, operation and maintenance training, and implementation needs

The EPA letter goes on to establish the requirements and application process for the other top manager positions.

On the vacant deputy director position, EPA said CUC submitted a list of applicants to EPA on Sept. 2, 2014 and Feb. 19, 2014.

“EPA found that three of the four applicants met the qualifications required by Stipulated Order, but these positions remains vacant,” Greenberg said.

The deputy director position has been vacant since July 15, 2013, when Fletcher was promoted to executive director.

The division manager for drinking water and wastewater position has been vacant since September 2014.

The technical manager for oil has been vacant since January 2015.

All these positions were or are required to be filled within 150 days.

“Please provide a detailed explanation and rationale as to why CUC has been unable to fill these critical positions,” Greenberg writes in the letter.

EPA sets a $1,000 per day per violation for the first 30 days CUC violates “Stipulated Order No. 1” requirements for management structure.

EPA sets a $2,000 per day per violation for the following 30 days.

EPA sets $5,000 per day per violation for each day thereafter.

As of September 2014, CUC owes about $33 million in fines for violating “Stipulated Order No. 1.” Most of these fines are for unfilled management positions, among others, Saipan Tribune learned.