THE U.S. Environmental Protection Agency is demanding that the Commonwealth Utilities Corp. pay a penalty of $162,600 for failing to fill critical position vacancies.
In a letter to CUC Acting Executive Director Betty Terlaje on Feb. 7, EPA-Enforcement & Compliance Assurance Division Director Amy C. Miller-Bowen said, “The position of Executive Director became vacant on February 22, 2023. Paragraph 8 of the Stipulated Order provides that CUC must appoint another qualified individual within one hundred fifty days of the date of the vacancy, or by July 22, 2023. The position of Chief Financial Officer became vacant on May 21, 2023. Paragraph 14 of the Stipulated Order provides that CUC must appoint another qualified individual within one hundred fifty days of the date of the vacancy, or by October 18, 2023.”
The EPA official added, “These are critical positions that impact CUC’s compliance with the substantive requirements of Stipulated Orders One and Two.”
According to Miller-Bowen, the current position of acting executive director “does not provide sufficient authority to implement major changes or make significant decisions.”
Moreover, the “absence of a CFO means that no progress can be made on CUC’s compliance with the order’s requirement that it create and implement a Financial Plan and Master Plan and have Financial Reserves.”
Overdue
Miller-Bowen said the requirements are years overdue. “It is critical for CUC to have a Financial Plan and Master Plan, as required by SO1, to scope out and solidify its financial future. Without an Executive Director or CFO, however, EPA does not believe progress on these plans will occur,” she added.
Federal court intervention may be necessary to ensure compliance, she said.
Miller-Bowen noted that EPA sent a letter to CUC expressing concerns with its inability to fill critical positions in a timely manner on Sept. 12, 2023.
“At that time,” she said, “CUC had vacancies for four SO1 positions. EPA expressed concerns regarding CUC’s delayed response for contacting qualified applicants; CUC’s slow timelines for submitting résumés to EPA for approval; the lack of CUC’s distribution of vacancy announcements; and concerns regarding insufficient offering of salaries and moving expenses. On October 19, 2023, the EPA program official responsible for SO1 compliance issues made an in-person presentation to the CUC Board of Directors in which he emphasized the chronic issues with vacancies and the lack of response to the EPA’s September letter.”
Next steps
On October 27, 2023, Miller-Bowen said, EPA followed up with a letter of concern to the CUC Board of Directors regarding the vacancies.
She said EPA also indicated it was considering the next steps, including assessing stipulated penalties, because of the ongoing inability of CUC to hire qualified personnel in a timely fashion.
Since the September letter, CUC has filled one of the vacancies (the position of drinking water and wastewater division manager) and appears to have improved upon the timeliness of contacting EPA and candidates, Miller-Bowen said.
“However, EPA does not believe that CUC is taking these vacancies seriously enough,” she added.
“A recent search of various hiring platforms for municipal public works revealed that neither of these vacant positions was listed. Additionally, EPA has learned [that] CUC is now implementing a policy to obtain complete background checks prior to interviewing a candidate, a significant departure from standard hiring practices, further adding delays to the process,” Miller-Bowen said.
EPA has never received a formal response from CUC regarding the concerns raised in the September letter, she added.
She said SO1 authorizes stipulated penalties for violations of the requirement to fill vacancies within 150 days in the amount of $1,000 per day for the first 30 days, $2,000 per day for the next 30 days, and $5,000 for each day thereafter.
“Stipulated penalties accruing through February 28, 2024 for the violations regarding the Executive Director and Chief Financial Officer amount to $1,355,000,” Miller-Bowen said.
“At this time,” she added, “we are willing to compromise the accrued stipulated penalties and are officially demanding payment of $162,600 (12% of the accrued penalties) for failure to fill the Executive Director and CFO positions through February 28, 2024.”
But she said the penalties will continue to accrue at an increased rate if the vacancies are not filled by the end of February.
Additional penalties
“We also expressly reserve our right to assess additional stipulated penalties for these and other violations of the Stipulated Orders. Since this letter constitutes EPA’s written demand for payment of that stipulated penalties pursuant to Paragraph 86.a of SO1, CUC must pay this amount no later than thirty days after CUC’s receipt of this letter or officially send EPA a Notice of Dispute in accordance with Paragraphs 100-101 of SO1. After that, the procedure set forth in Paragraphs 101-108 shall commence,” the EPA official said.
The penalty demand letter was part of EPA’s status report submitted recently to the District Court for the NMI.
Variety was unable to get a comment from CUC.
Background
In November 2008, after EPA cited CUC for violating the Clean Water Act and the Safe Drinking Water Act, the federal court issued Stipulated Orders 1 and 2.
SO1 focuses on CUC’s management structure, drinking water and wastewater issues, such as requiring CUC to provide safe drinking water to residents on a 24-hour basis, maintaining adequate chlorine supplies, safely treating and discharging wastewater, developing long-term capital improvement and financial plans, and implementing the projects described in the Master Plan. SO1 also restructures CUC’s organization to reflect a typically functioning utility and requires that key employees possess appropriate education and experience levels.
SO2 focuses on oil issues and requires CUC to repair and replace oil storage units and operation infrastructure, manage tank and pipeline facilities, facility wastes, facility drainage and storm water runoff. CUC is also required to maintain infrastructure and implement spill and emergency response protocols.
