FOI Commission: Utility co-op budget is public

Hartford — The state Freedom of Information Commission voted unanimously Wednesday that the operating budget of the Connecticut Municipal Electric Energy Cooperative, including staff salaries and board expenses, shall be made public.

The commission Wednesday approved a three-page report by Hearing Officer Victor Perpetua in response to an FOI complaint filed by The Day on Nov. 17, 2016, after CMEEC CEO Drew Rankin failed to provide the detailed 2017 operating budget approved by the board.

The energy cooperative is owned by its six municipally owned public utilities, including Norwich Public Utilities, Jewett City Department of Public Utilities, Groton Utilities, which also owns member Bozrah Light & Power, and three Norwalk public utilities.

On Tuesday, the day before the FOI Commission meeting, The Day received a seven-page budget summary from CMEEC General Counsel Robin Kipnis. The document listed totals in 11 categories in the $13.6 million non-fuel operating budget, including salaries listed at $3.95 million — a 16 percent, or $553,194, increase over the previous year’s salary total. The budget summary lists non-fuel operating and management expenses at $4.25 million, a 9 percent increase, and "miscellaneous and general" expenses at $602,700, a 1 percent drop from the previous year.

But no breakdowns were provided for any of the categories, including the salaries of Rankin and other staff, and no line item was listed for expenses for the CMEEC board of directors.

The Day argued at Wednesday’s FOI Commission meeting that the operating budget, with detailed expenses listed, should be a public document, as are budgets of typical municipalities and school districts.

FOI commissioners offered little comment on the proposed decision, but amended Perpetua’s draft decision to eliminate the phrase “If they have not already done so,” and approved the decision that CMEEC shall provide The Day with a copy of the 2017 operating budget “forthwith.”

CMEEC officials did not attend Wednesday’s meeting. Later Wednesday, Kipnis said she considered the seven-page summary sheet provided Tuesday in compliance with the FOI Commission’s ruling, and said she would consider The Day’s more detailed request for salaries, operating and management expenses, office expenses and for a category titled “miscellaneous and general.”

The commission decision comes 2½ weeks before amendments to the state statute that created the energy cooperative take effect that call for CMEEC to provide a number of financial documents to the General Assembly’s Energy and Technology Committee, including the most recent audited financial statements, annual reports and most recent IRS Form 990 filing required of nonprofits. CMEEC also must provide the legislative committee with “a report listing positions of each employee and the amount of salary, wages and fringe benefit expenses paid to each such employee.”

The new law also calls for a forensic audit of CMEEC’s finances dating back five years. The period of the audit covers the four years that the cooperative hosted controversial trips to the Kentucky Derby for dozens of board and staff members, spouses and other family members and government officials from throughout the state. The controversy sparked ethics violation rulings in Norwich and Groton City against municipal and utility officials who participated in some of the trips.

CMEEC funded the trips, which cost a combined total of $1.02 million, through a margin fund that contains revenue received from outside contracts with entities including several Massachusetts municipalities, the Hartford-area Metropolitan District Commission and the Mohegan tribal utility, as well as money from a $1-per-megawatt-hour surcharge on CMEEC member ratepayers. Revenue from the fund is earmarked for rate stabilization for the member utilities to guard against periodic spikes in purchased power costs.

Out-of-state retreats, as the Kentucky Derby trips were called, also are prohibited in the new law, and while the CMEEC board never voted to approve the derby trips, the new law requires board review and votes on any proposed retreats. The vote must include agendas for business to be conducted — there was none on the derby trips — lists of invitees and any entertainment or gifts to be included.

The new law also gives all CMEEC member municipalities a new appointee to the cooperative’s board of directors starting Oct. 1. The municipalities’ appointees must be residential or commercial ratepayers in the city or town and cannot be employed by the municipality, the utility or employed by any other CMEEC member municipality or utility or by the cooperative itself.

c.bessette@theday.com

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