Norwich — The city Ethics Commission had no authority to recommend fines and the city should not be reimbursed for the calculated costs of the controversial 2016 Kentucky Derby trips, hosted by the Connecticut Municipal Electric Energy Cooperative, an attorney hired by the city utilities commission reported Tuesday.

But following the report by attorney Anthony Palermino, which recommended 10 actions to address future ethics questions, Norwich Public Utilities General Manager John Bilda read his own one-page statement pledging a $15,000 donation to the Thames Valley Council for Community Action for fuel assistance to needy families.

The utilities commission accepted Palermino's report and all recommendations unanimously with little comment except to thank him for his thorough review of the issues.

Bilda apologized to the public, the utilities commission, NPU employees and to his family for the nearly yearlong controversy over the lavish Kentucky Derby trips he attended along with NPU Division Manager Steve Sinko and former utilities commission Chairwoman Dee Boisclair and former Vice Chairman Robert Groner. Bilda said by the utility’s action to accept attorney Palermino’s five-page report, the city and utility can take steps to improve the community.

“In this spirit, I have decided to make a personal contribution of $15,000 to the Thames Valley Council for Community Action,” Bilda read aloud. “I am hopeful that these funds will help a number of families in Norwich this winter that may have fallen on hard times or are struggling to pay their utility bills.”

The city Ethics Commission had ruled that the four NPU officials and Mayor Deberey Hinchey, who also attended the 2016 Kentucky Derby trip as Bilda’s guest, all violated the city ethics code and should reimburse the city for all or a portion of the calculated cost of their trips. The Ethics Commission based the reimbursement on the concept that the funds CMEEC used for the trips otherwise would have been placed in the six member municipal utilities’ rate-stabilization funds.

But Palermino said that is a false conclusion based on the state statute that created CMEEC and its governance.

“The money that CMEEC takes in is CMEEC’s money until such time as the CMEEC board of directors votes to transfer any funds,” Palermino told the Norwich utilities commission Tuesday. “... So there’s no such thing as Norwich money in CMEEC.”

The Ethics Commission had recommended that Bilda and Sinko each pay the full cost of their trips for themselves and their spouses, $15,510 each, to a fund that helps people struggling to pay utility bills. The commission recommended Boisclair and Groner pay for 25 percent of the cost of the trips for themselves and their spouses, $3,877 each. Hinchey already has paid the city the $1,945 that the Ethics Commission recommended she pay.

Palermino also said it was clear that Bilda is expected to “fully participate” in the management of CMEEC, which is “owned by” the municipal utilities, he said with emphasis. He said the former utilities commissioners instructed Bilda and his staff to participate in CMEEC, and the Kentucky Derby trips were arranged and paid for solely by CMEEC, and not the member utilities.

Boisclair and Groner resigned their positions on the utilities commission as the City Council was about to launch its own internal investigation into their conduct as council appointees to the utilities commission. Palermino, however, said the city Ethics Commission had no authority in the charter provision that created the commission to order discipline of the utilities commissioners.

Palermino said his report could not address them directly, because they are no longer commission members.

Palermino said any discipline recommended against Sinko would have to be conducted with the involvement of his labor union and would have to follow rules and procedures of the union, giving the employee rights to seek arbitration and appeal if he deems the measures inappropriate. Any discipline against Bilda also would have to be done in accordance with his personal service contract with NPU.

Palermino said he reviewed the city charter, the city ethics code and the city charter provision that created NPU and questioned whether the Ethics Commission has jurisdiction over NPU activities and employees, given their separation in the charter. He said the City Council, which might have some authority, did not formally adopt the Ethics Commission’s report and recommendations, but merely accepted the report and forwarded it to the utilities commission.

Palermino made several recommendations for improving the city’s ethics process, ethics training and response to complaints. He acknowledged that the Ethics Commission also has been discussing ways to strengthen its authority in handling ethics complaints.

Palermino said the utilities commission should conduct thorough ethics training for itself and NPU managers, both using the online training ordered by City Manager John Salomone and more customized training with a “recognized consultant and/or legal counsel.” The commission also should be trained in CMEEC’s operations and duties of CMEEC board members. Ethics provisions also should be included in collective bargaining agreements and personnel contracts.

NPU also should adopt its own code of ethics and develop a process for reviewing ethics questions prior to events.

Palermino’s final “proposed action” was an item proposed by the utilities commission, itself, that the commission “place a letter in the personnel file of the general manager with its concerns in this matter.” The Ethics Commission had recommended a letter “outlining this ethical violation” be placed in both Bilda’s and Sinko’s personnel files.

c.bessette@theday.com