PUC to review Brewer Water District contracts

BREWER – Though the Legislature soon will consider proposed legislation that would turn control of the community’s water system over to city government, it appears that the matter of the contracts recently signed by Brewer Water District trustees will be addressed by the Maine Public Utilities Commission.

City officials and representatives of the water district have been at odds since the bill to dissolve the district was submitted to the Legislature at the city’s request.

In late February, the trustees signed contracts with all eight of the district’s employees, who are not unionized and who have never before had contracts.

The contracts, which cover Superintendent Gerald Carstensen, Assistant Superintendent Yvonne Martin and six other employees, range from one to six years in duration.

The agreements, signed Feb. 25 and delivered to City Hall three days later, call for the payment of substantial severance packages under several scenarios. City Finance Director Karen McVey at the time estimated the contracts’ total financial worth at $414,762, based on 2-year-old salary and benefit figures, the most recent ones to which city officials had access.

During a legislative work session Thursday on the Brewer water bill, PUC legislative liaison Marjorie McLaughlin said that while it was “pretty unusual” for the commission to deal with employment contracts, it was willing to look into the matter with the help of a consultant.

In this case, she noted, the commission would review the issue to determine if the contracts constitute “inappropriate action” on the part of the trustees and if they do, if the contracts should be voided.

Though the trustees said they signed the contracts out of concern that they could lose key employees, the move outraged city officials, some of whom said they saw it as an attempt to defy the community’s wishes.

Mayor Michael Celli and City Manager Stephen Bost said earlier that the city is looking into the legality of the contracts. The documents have been referred to Verrill & Dana, the city’s legal counsel in the water district matter. The contracts also irked Brewer residents, 10 of whom signed a March 7 letter of complaint to the PUC Administrative Director Dennis Keschl.

“In general, these employment agreements provide Water District employees with a lump sum payment of six months’ or a year’s worth of salary if the [district] is taken over by another entity,” the letter stated. “All of the agreements appear one-sided in that they are terminable by the employee at will. By contrast, the [district] is limited in its ability to terminate.”

The residents further noted, “In the case of junior employees, it appears that termination without just cause triggers a severance payment of up to six months of salary, plus benefits. In the case of senior management, they have the right to a year’s worth of salary and benefits in the following instance: there has been a ‘change in control’ of the [district], and the employee ends up not working for the successor. Significantly, this change of control payment is owed even if the successor plans to rehire the employee, but the employee decides to leave on his or her own volition.”

In addition, residents said, in the event of a so-called “acceleration event” – including the passage of the water bill or a local referendum resulting in the transfer of water district assets without the successor’s being required to honor the contracts – some workers would be eligible for as much a three years worth of salary and benefits.

Residents also wrote that the trustees voted on the contract during executive session, which is a violation of the state’s right to know law.

“At this point, we are struggling to see how this action … is in the best interest of the public. … This is completely at odds with what the ratepayers of Brewer want, which is moving the water system under the jurisdiction of the city of Brewer.”