“CUC bears a substantial obligation to deliver highly technical work on time to the satisfaction of the U.S. District Court and the U.S. EPA, pursuant to two consent, or stipulated orders. The first requires the upgrade and smooth functioning in virtually all aspects of CUC’s water and wastewater divisions. The second requires CUC to properly eliminate over 400,000 gallons of used oil and to institute measures to avoid uncontrolled buildup of such inventories,” the governor stated in his 18-page E.O. 2010-03, dated March 25.
“Failure to meet the requirements of the federal court orders could subject CUC and the CNMI to substantial fines and charges, and, in the extreme, to a federal takeover of their finances. Presently, CUC is accruing substantial fines. Most of the fines have not been levied; but they could be. The EPA has, however, levied one fine, in the amount of $29,000,” he added.
As of last year, CUC’s accumulated fines reached over $600,000.
Last Feb. 24, the federal court entered an additional stipulated order which mandated CUC to develop an Interim Financial Plan by March 26.
This had yet to be submitted to the EPA as of March 25.
The governor said the tight deadlines for stipulated order # 2 are of great concern to CUC as it includes disposing of the used waste oil.
This project is contingent upon the $4.5 million capital improvement projects grant award from the U.S. Department of the Interior.
CUC, an autonomous government agency governed by a board of directors, was stripped of its autonomy in 2008 after Saipan suffered serious rolling blackouts.
The move enabled the administration to rent power generators overseas for $504,000 a month which allowed CUC to repair its antiquated power engines.
The power rental agreement with the U.K.-based Aggreko ended on Sept. 12, 2009.
The end of the contract “saves CUC customers at least $6 million per year in fees. But it still presents risks, as the strategy requires proper operation and maintenance of CUC’s owned engines by CUC’s technical staff and the timely securing of materials and supplies,” the governor said.
The latest emergency declaration for CUC will also enable the agency to hire skilled foreign workers.
“Presently CNMI Public Law 16-4 prohibits CUC from hiring any more non-U.S. technical workers than the 19 skilled professionals recently with CUC. CUC has repeatedly asked the Legislature for relief from this statute regulating the government’s workforce, to no avail,” the governor said.
“Further, errors in wording in the CUC enabling legislation recently enacted, P.L. 16-17, as amended would bar the executive director from day-to-day management of the corporation, effectively shutting CUC down. This EO eliminates these problems while it is in effect,” he added.
The EPA sued CUC in federal court for failing to comply with certain U.S. environmental rules concerning the operations of its power, waste and wastewater facilities.
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