2023 Laws of Puerto Rico › TITLE TWENTY-TWO - Public Works (§§ 1 — 1104) › Chapter 9 - Aqueduct and Sewer Authority (§§ 141 — 169) › § 143 - Governing Board; officers

The powers of the Authority shall be exercised and its general policy and strategic management shall be determined by a Governing Board, hereinafter the Board which shall be composed of seven (7) members, which shall include: four (4) independent directors appointed by the Governor of the Commonwealth of Puerto Rico, with the advice and consent of the Senate, which shall include: one (1) engineer authorized to practice the engineering profession in Puerto Rico with at least ten (10) years of experience in the practice of said profession; one (1) attorney with at least ten (10) years of experience in the practice of said profession in Puerto Rico; one (1) person with vast knowledge and experience in corporate finance; one (1) professional with expertise in any of the fields related functions delegated to the Authority; one (1) customer representative selected in accordance with the procedure provided hereinafter in this section; and other two (2) members who shall be the Executive Director of the Mayors Association and the Executive Director of the Mayors Federation.
(a) Independent directors to be appointed by the Governor shall be selected from a list of at least ten (10) candidates to be prepared and submitted to the Governor by a recognized executive search firm for board of director recruitment for institutions of similar size, complexity, and risks as the Authority. The identification of candidates by such firm shall be based on objective criteria such as educational and professional background, and at least ten (10) years of experience in their field. The educational and professional background criteria shall include at least the following fields: electrical engineering, business administration, economics and finances, or law. The list shall include, to the extent practicable, at least five (5) residents of Puerto Rico. The Governor shall evaluate, at his full discretion, the list of recommended candidates and select four (4) persons from the list. If the Governor rejects any or all the recommended persons, said firm shall submit another list within the next thirty (30) calendar days.
Board members representing customer interests at the time of the approval of this act shall remain in their office until the terms for which they were elected expire. The member of the Governing Board representing the customers shall be selected by means of an election to be supervised by the Department of Consumer Affairs (DACO, Spanish acronym) to be held in accordance with the procedure provided in this section, and the Authority shall provide the facilities as well as the financial resources needed for such purposes.
The member elected shall represent the interests of residential, commercial, and industrial customers and shall serve for a three (3)-year term. The members appointed by the Governor shall serve for staggered terms, to wit: two (2) members shall hold office for five (5) years and two (2) members for six (6) years. As the terms of office of the four (4) Board members appointed by the Governor expire, the Governor shall appoint their successors for five (5)-year terms, following the same candidate identification mechanism described above. None of the members appointed by the Governor may hold such office for more than three (3) terms. The mechanism for candidate identification by a recognized executive search firm shall be in effect for fifteen (15) years, after which the Legislative Assembly shall evaluate whether such mechanism shall continue in effect or is rendered ineffective. If the Legislative Assembly renders such mechanism ineffective, it shall determine the new appointment method to be used. The mechanism provided in §§ 141-161a of this title shall continue in effect until the Legislative Assembly provides otherwise.
All Board members shall meet the director independence requirement under the New York Stock Exchange (NYSE) Corporate Governance Standards; provided, however, that being a customer of the Authority shall not constitute a lack of independence.
Any vacancy in the office of the members appointed by the Governor shall be filled by appointment of the latter, for the unexpired term of the original appointment in the same manner in which they were originally selected, to wit, with the advice and consent of the Senate upon submittal of a list of at least ten (10) candidates by a recognized executive search firm for institutions of similar size, complexity, and risks as the Authority. The identification of candidates by such firm shall be based on objective criteria such as educational and professional background, and at least ten (10) years of experience in their field. The educational and professional background criteria shall include at least, the following fields: electrical engineering, business administration, economics and finances, or law. The list shall include, to the extent practicable, at least five (5) residents of Puerto Rico. The Governor may use the latest list submitted for his/her consideration whenever it is necessary to fill a vacancy arising as a result of the resignation, death, disability, or substitution outside of the original term of the member being substituted. The designation of a substitute shall be made within six (6) months after the vacancy occurs. However, any vacancy in the office of the members elected to represent customers shall be filled in accordance with the election process regulated by DACO, within one hundred twenty (120) days after the date on which the vacancy occurred, and a new three (3)-year term shall begin to run.
No person shall be appointed to fill a vacancy in the Board during the electoral prohibition period, unless it is an essential requirement for the Board to have a quorum. In these cases, such appointment shall expire on January 1st of the following year. Given the terms and mutual commitments as well as the urgency of implementing the Authority’s restructuring, this prohibition shall not apply to the electoral prohibition period applicable to the year 2016.
In addition to the independence requirements under the New York Stock Exchange (NYSE) Corporate Governance Standards that shall apply to all Board members, no person may become a Board member (including the members representing costumer” interests) if such person: (i) is an employee, retiree, or has any direct or indirect substantial economic interest in any private company with which the Authority has entered into contracts or with whom it engages in transactions of any kind, including borrowing money or providing raw material; (ii) within three (3) years before holding office, has had a business relationship with or any commercial interest in any private company with which the Authority has entered into any contracts or with whom it engages in transactions of any kind; (iii) has been a member of a local or central directing body of a political party registered in the Commonwealth of Puerto Rico, during the year immediately preceding his appointment; (iv) is an employee or official of the Authority, or is an employee, member, advisor, or contractor of any of the Authority’s labor unions; or (v) has failed to provide a certification of having filed income tax returns during the five (5) preceding taxable years, a certification of having no outstanding debt issued by the Department of the Treasury, a certification of having no debts outstanding with the Authority, a Certificate of Criminal Record issued by the Puerto Rico Police Department, as well as negative certifications of the Child Support Administration (ASUME, Spanish acronym) and the Municipal Revenues Collections Center (CRIM, Spanish acronym) or has failed to meet all other requirements applicable to any person interested in becoming a public official.
No independent member of the Board may be a public employee, except for the professors of the University of Puerto Rico system.
The independent Board members and the customer representative shall receive for their services the compensation determined by the Board unanimously. If unanimity cannot be reached, then the Governor shall determine the compensation of the members. Such compensation shall be comparable to that earned by Board members in water utility companies of similar size, complexity, and risks as the Authority, taking into account the nature of the Authority as a public corporation of the Commonwealth of Puerto Rico and, in any case, that is sufficient to attract qualified candidates.
The Board’s compliance with the industry’s governance standards shall be evaluated at least every three (3) years by a recognized consultant with expertise in the matter and broad experience providing advice to boards of directors of entities whose income, complexity, and risks are similar to those of the Authority. Said report shall be submitted to the Governor. The executive summary with the findings and recommendations of said report shall be published by the Authority.
The Board existing as of the approval of the “Aqueduct and Sewer Authority Revitalization Act” shall continue carrying out its duties until the expiration of their respective terms of appointment.
Regular and special meetings of the Board shall be simultaneously broadcasted on the Internet and subsequently posted on the Authority’s website, except for those meetings or portion thereof when the following subjects are discussed: (i) privileged information in accordance with the Rules of Evidence of Puerto Rico; (ii) information related to collective bargaining, labor-related disputes, or personnel-related issues such as appointments, evaluations, disciplinary actions, and dismissal; (iii) ideas with regard to the negotiation of potential Authority contracts or a determination to rescind or terminate contracts in effect; (iv) information of strategies regarding lawsuits of the Authority; (v) information of internal investigations of the Authority while these are still being conducted; (vi) aspects regarding the intellectual property of third parties; (vii) trade secrets of third parties; (viii) issues that the Authority should keep confidential in accordance with any confidentiality agreement; or (ix) matters of public security involving threats against the Authority, its property or employees. Likewise, Board members and individuals participating at meetings not broadcasted due to the aforementioned reasons shall keep the matters discussed in said meetings confidential until there is no longer a need for confidentiality or they are required by law to disclose such information. To the extent possible, such meetings shall be broadcasted live at the commercial offices of the Authority, and the recording thereof shall be available on the Authority’s website on the business day following the meeting. Any recording shall be readily available on the Authority’s website for at least six (6) months after the date on which it was initially posted. Once such term elapses, recordings shall be filed in a place where the citizenry may access them for further review.
The Authority shall notify on its website and its commercial offices, the schedule of the regular meetings of the Governing Board along with the agenda of both the last and the next Board meetings. Furthermore, the minutes of the work carried out during regular and special meetings of the Board shall be posted on the Authority’s website, once these are approved by the Board in a subsequent meeting. Prior to posting such minutes, the Board shall also approve the version of each minute to be published, deleting: (i) confidential information in accordance with the Rules of Evidence of Puerto Rico; (ii) information related to collective bargaining, labor-related disputes, or personnel-related issues such as appointments, evaluation, disciplinary actions, and dismissal; (iii) ideas relating to the negotiation of potential Authority contracts or a determination to rescind or terminate contracts in effect; (iv) information of strategies regarding lawsuits of the Authority; (v) information of internal investigations of the Authority while these are still being conducted; (vi) aspects regarding the intellectual property of third parties; (vii) trade secrets of third parties; (viii) issues that the Authority should keep confidential in accordance with any confidentiality agreement; or (ix) matters of public security involving threats against the Authority, its property or employees. The Secretary shall propose, for the Board’s approval, the text of the minutes and the text to be deleted from the version to be published. It shall be understood as “minute” a written account of the matters transacted, addressed, or agreed on by the Board.
In the case of a conflict between the provisions of this Section and the provisions of §§ 9081 et seq. of Title 3, directing all of the public corporations and instrumentalities of Puerto Rico to broadcast their Boards” meetings on their websites, the provisions of §§ 141-161a of this title shall prevail.
At least once a year, the Board shall hold a public meeting to answer questions and address the concerns of customers and the citizenry in general. People attending such meeting may ask questions to the members of the Board about issues related to the Authority. Such meeting shall be notified at least five (5) business days in advance in a newspaper of general circulation and on the Authority’s website.
(b) Procedure to elect representatives of customers’ interests.—
(1) DACO shall approve regulations to implement the election procedure provided in this section. Said regulatory procedure shall comply with the provisions of the Uniform Administrative Procedures Act, §§ 2101 et seq. of Title 3, and the contents thereof shall be consistent with §§ 141-161a of this title.
(2) On or before one hundred twenty (120) days prior to the expiration of the term of each representative of customers” interests in the Governing Board of the Aqueduct and Sewer Authority, the Secretary of DACO shall issue a notice of elections, whereby the requirements to be nominated as a candidate shall be specified. The notice of election shall be published by means of media advertisement, on the Authority’s and DACO’s websites, and mailed to customers along with the Authority’s bill.
(3) The Secretary of DACO shall design and distribute the request for nominations form, in which every person aspiring to become a candidate shall state under oath, his/her name, personal circumstances, street and mailing address, telephone number, place of work, profession, relevant work experience, education, and account number with the Authority. The form shall also provide that, once the candidates are elected, they shall submit sufficient information attesting to their compliance with the New York Stock Exchange Corporate Governance Standards. The request for nomination as representative shall include the signature of at least fifty (50) customers, along with their name, address, and account number with the Authority, who endorse the nomination of the aspirant. Furthermore, aspirants shall enclose a letter bearing the letterhead and signature of one (1) official of each commercial or industrial customer certifying the endorsement of such aspirant. Such request forms shall be available on the Authority and DACO’s websites to be filled out completely on digital format by aspirants.
The Secretary of DACO shall include in the regulations a mechanism to validate endorsements pursuant to the purposes of §§ 141-161a of this title. The regulations shall provide that the results of the endorsement validation process shall be certified by a notary. Likewise, such regulations shall include the requirements to be met by candidates in accordance with §§ 141-161a of this title and other applicable laws. Every candidate must be a bona fide Authority customer.
(4) On or before ninety (90) days prior to the expiration of the term of each representative of customers” interests, the Secretary of DACO shall certify as candidates the seven (7) nominees under each one of the two customers” interests representative categories who have submitted the highest number of endorsements and have met all other requirements established in this subsection. Provided, That each one of the selected candidates may designate a person to represent him in the process and during canvassing.
(5) On or before sixty (60) days prior to the expiration of the term of each representative of Costumers” interests, the Secretary of DACO, in consultation with the Secretary of the Authority’s Governing Board shall proceed with the design and printing of ballots, and the canvassing. The design of the ballot for the representative of residential customers” interests shall include a space for the signature of the customer casting the vote and a space for the residential customer to write his account number and the mailing address where the Authority’s water and sewer bill is received. The ballot for the representative of commercial or industrial customers” interests shall include a space where the customer shall write his account number, and where the name, title, and signature of an officer authorized to cast the vote in representation of said customer shall be included. The ballot shall advise that the vote shall not be counted if the customer fails to sign or write his account number thereon.
(6) Ballots shall be distributed by mail along with the service bill to each customer.
(7) Each one of the candidates selected as customers” interests representative shall designate one person to represent him during the process, and such persons, together with a representative of the Secretary of DACO and a representative of the Secretary of the Board shall compose an Election Committee, which shall be chaired and directed by the representative of the Secretary of DACO.
(8) The Election Committee shall prepare and post prominently on the Authority’s website information of the candidates that enable customers to pass judgment on such candidates” abilities.
(9) The Election Committee shall enter into public service collaboration agreements with the different mass communication media in Puerto Rico to promote the election process among the Authority’s customers and to introduce all aspirants, under equal conditions.
(10) The Election Committee, within ten (10) days after the deadline to receive ballots shall begin the canvassing and notify the results thereof to the Secretary of DACO, who shall certify the candidates-elect and notify such certification to the Governor of the Commonwealth of Puerto Rico and the Chair of the Board.
(e) All Board members shall meet the director independence requirement under the New York Stock Exchange (NYSE) Corporate Governance Standards; provided, however, that being a customer of the Authority shall not constitute a lack of independence.
(f) Code of Ethics.— The Board shall adopt a Code of Ethics that shall govern the conduct of its members and staff. Among its objectives, the Code of Ethics shall require that the conduct of the members of the Board and its staff be governed at all times by the public interest and the interest of customers, and the best practices of the energy industry, and not by the pursuit of personal gain or profits for other natural or juridical persons; require and oversee that there is no conflict of interests and immediately clarify any apparent conflict of interests that may call into question the loyalty and fiduciary duty of the members of the Board and its staff with the interests of the Authority and of its customer; require that every Board member shall be duly prepared to attend regular and special meetings, and be able to deliberate on the Authority’s matters; and provide the tools to prevent, orient, guide, and adjudicate on all that pertains to compliance with the ethical duties and responsibilities of all individuals regulated by the Code of Ethics of the Board. In addition, the Code of Ethics shall be designed in accordance with the best governance practices of the electric power industry and consistent with the applicable ethical rules, such as the provisions of the Puerto Rico Government Ethics Act of 2011, §§ 1854 et seq. of Title 3.
Actions taken by the Board and the members thereof, as well as the Executive Officers and their respective staff shall be governed by the highest duties of loyalty, due care, competence, and diligence for the benefit of the Authority and the public interest of providing an essential quality public service to customers through just and reasonable rates consistent with sound fiscal and operational practices that provide for an adequate service at the lowest reasonable cost to ensure the reliability and safety of the System. Members shall not represent any creditor nor interests other than those of the Authority.
(g) The Board shall adopt an internal Code of Ethics that shall govern the conduct of its members and staff, including the Executive Officers and their respective staff. Among its objectives, the Code of Ethics shall require that the conduct of Board members, and the Executive Officers and their respective staff be governed at all times by the public interest and the interest of customers, and the best practices of the water utility industry, and not by the pursuit of personal gain or profits for other natural or juridical persons; require and oversee that there is no conflict of interests and immediately clarify any apparent conflict of interests that may call into question the loyalty and fiduciary duty of Board members and the Executive Officers and their respective staff with the interests of the Authority and of the customers thereof; require that every Board member, Director, officer or executive employee shall be duly prepared to attend regular and special meetings, and be able to deliberate on the Authority’s matters; and provide the tools to prevent, orient, guide, and adjudicate on all that pertains to compliance with the ethical duties and responsibilities of all individuals regulated by said Code of Ethics. In addition, the Code of Ethics shall be consistent with other applicable ethical rules, such as the provisions of the Puerto Rico Government Ethics Act of 2011, §§ 1854 et seq. of Title 3.
In addition, the provisions of §§ 1857 et seq. of Title 3, known as the “Puerto Rico Government Ethics Act” shall apply to the directors, Executive Officers and their respective staff.
The directors and Executive Officers shall be required to ensure and enforce, and shall take any actions as necessary to enforce the strict compliance with the following prohibitions by all employees of the Authority, as well as by their contractors, in addition to any other legal provision prohibiting such conduct and activities, including, but not limited to:
(1) Solicit or contribute money or make contributions either directly or indirectly to political organizations, candidates or parties on the premises or property of the Authority, and during working hours; and in the case of directors and Executive Officers, to solicit or collect money contributions or to contribute, directly or indirectly, to political organizations, candidates or parties;
(2) support political aspirations or engage in a political campaign to hold or support someone who runs for an elective public office or any position in the management or organization of a political party or to participate in partisan political campaigns of any kind, on the premises or property of the Authority, and during business hours;
(3) make public statements, comments, or remarks regarding partisan political issues or acts on the premises or property of the Authority, and during working hours;
(4) use or display any political symbol, insignia, logo during business hours or on premises of the Authority;
(5) coerce, obligate, command, or require other employees or contractors to make financial contributions, pay membership fees or carry out or engage in partisan political activities while they are on duty;
(6) influence, favor or attempt to favor, or restrict or attempt to restrict, intervene or attempt to intervene in the employment opportunities and conditions, or the opportunities of contractors to enter into contracts or continue to contract with the Authority, in exchange for remuneration motivated by political party interests;
(7) request other contractors to vote or further the electoral interests of any political party or candidate, on the premises or property of the Authority, and during working hours;
(8) hold meetings, on the premises or property of the Authority, and during working hours, of associations or groups that promote electoral or partisan political interests;
(9) use the names and logos of the Authority to identify associations or groups promoting electoral or partisan political interests;
(10) any behavior intended to give the impression that the Authority supports associations or groups promoting electoral interests or partisan politics; and
(11) under no circumstances the Authority’s premises or property may be used for partisan political activities, nor for fundraising activities to benefit candidates or political parties.
(h) The Board shall appoint an advisory committee to be constituted by seven (7) members and shall include, among others, persons who represent the interests of the communities lacking the appropriate aqueduct and sewer services, the special communities of Puerto Rico, interests related to public health, the interests of the labor sector, and the interests of the environmental sector.
The Advisory Committee shall also consist of one designated member from among the following entities: the College of Engineers and Surveyors of Puerto Rico; College of Master and Journeyman Plumbers of Puerto Rico; the Associated General Contractors of America; the Builder’s Association of Puerto Rico; the Puerto Rico Manufacturers” Association; the Pharmaceutical Industry Association; Hotel and Tourism Association; and any other association which in the judgment of the Governing Board, may provide the necessary advice to discharge the duties delegated thereto under §§ 141-161a of this title.
The following may not be members of the Advisory Committee:
(1) Employees or officials of the Authority;
(2) Authority’s contractors;
(3) persons holding positions in central or local directing bodies of a political party; and
(4) any person who has a conflict of interest.
Members appointed by the Board as well as those designated by the entities set forth herein shall serve for a four (4)-year term.
The Advisory Committee shall meet with the full Board at least three (3) times a year, and with the Executive Officers of the Authority as often as the Board or the Executive President deems convenient to present their suggestions, discuss the quality of the services rendered, the needs of the communities, the Capital Improvement Program, and any other matter that the Board, the Executive President or the Advisory Committee deems necessary.
The Advisory Committee shall also submit two annual reports to the Board and to the Legislative Assembly, which shall discuss their observations and provide comments and recommendations to the Authority’s Capital Improvement Program, as provided in §§ 141-161a of this title, and whereby the Authority’s compliance with the implementation plans, budgets and schedules related to Capital Improvement Program shall be supported.
The Board shall adopt the norms for the operation of the Advisory Committee.
The members of the Advisory Committee shall not intervene in the formulation and implementation of public policy, and therefore, shall not be considered public officials for purposes of §§ 1854 et seq. of Title 3, known as the “Puerto Rico Government Ethics Act of 2011”.
(i) Without limiting the general provisions regarding improper conduct, as well as ethical and fiduciary duties provided for in §§ 141-161a of this title, including the confidentiality duty, no independent member of the Board, or any Executive Officer of the Authority shall:
(1) contribute money or make contributions either directly or indirectly to political organizations, candidates or parties while holding office;
(2) seek political office or engage in a political campaign to hold or support someone who runs for an elective public office or any position in the management or organization of a political party or to participate in partisan political campaigns of any kind while holding office;
(3) make public statements, comments, or remarks regarding partisan political issues or acts while holding office;
(4) coerce, obligate, command, or require other Board members, officials, or employees to make financial contributions or carry out or engage in partisan political activities while they are on duty; or
(5) solicit while on duty, or coerce, obligate, or require other Board members, officials, or employees to vote or further the political interests of his/her party or candidate of preference.
The Governor may dismiss any independent member of the Board appointed by him for the following reasons:
(1) Engaging in the conduct prohibited in this section;
(2) incompetence, clear professional inability, or negligence in the performance of functions and duties;
(3) immoral or unlawful conduct;
(4) being convicted of a felony or misdemeanor involving moral depravity or crimes against the public treasury or function;
(5) clear abuse of the Authority or of the discretion bestowed upon him under this or any other act;
(6) wanton and willful obstruction of the works of the Board;
(7) destruction of the Authority’s property;
(8) work under the influence of alcohol or controlled substances;
(9) fraud;
(10) violations of the Puerto Rico Government Ethics Act, §§ 1854 et seq. of Title 3, or the Code of Ethics that the Board approves as provided in this section;
(11) abandonment of duties; or
(12) failure to meet the requirements to become a member of the Board, as provided in this subchapter.
Board members may also be removed from office due to physical or mental disability which prevents them from performing their duties, in this case it shall not be considered a dismissal.
(j) Without impairment to any rights granted under §§ 3077 et seq. of Title 32, known as the “Act on Claims and Lawsuits Against the Commonwealth”, no present or future member of the Board, official, agent, or employee of the Authority shall be held civilly liable for any action taken in good faith in the discharge of his duties and responsibilities under §§ 141-161a of this title, unless it is established that he engaged in conduct constituting an offense, deceit or gross negligence, nor shall be liable for any costs incurred in relation to any claim for which they enjoy immunity as provided herein. Furthermore, the Board, any of its individual directors, as well as any official, agent, or employee of the Authority shall be indemnified for any civil liability adjudicated under the laws of the United States of America, unless it is established that he engaged in conduct constituting an offense, deceit, or gross negligence.
(k) No elected official of the Executive or the Legislative Branch or of the municipalities may, directly or indirectly, interfere in the performance or decision-making duties of the Board or the executive officers of the Authority, including, but not limited to, interfering to affect the result or decisions of the executive officers or the Board on labor relations disputes or determinations; human resources decisions such as appointments and compensations; collective bargaining agreements; determinations in connection with rate review, contracting, service disconnection; determinations regarding the content or implementation of the Capital Improvement Program, and other operational matters or inherent functions of the executive officers and the Board, except in the case of a formal communication or notification of such official as part of his official duties and/or whenever his interference is necessary to protect life, property, or public safety during emergencies.
(l) The Authority shall hold the offices of Executive Officers that the Board creates. The Executive Officers of the Authority shall be those appointed by the Board to hold office as Executive Officers. Executive officers shall include an Executive President, who shall be the chief officer, based solely on experience, ability, and other qualities that especially enable them to achieve the purposes of the Authority; an Infrastructure Executive Director; and the five (5) Regional Executive Directors, from the Metro, North, South, East and West Regions, whose main functions are established hereinafter, in addition to those delegated by the Board, and shall be appointed by the Board and supervised by the Executive President. The Board may create in the future additional Authority executive officer offices, in function of the decentralized managerial structure adopted by §§ 141-161a of this title and as the needs of the Authority may so require. No person may become an Executive Officer if he: (i) is an employee, retiree, or has any direct or indirect substantial interest in any private company with which the Authority has entered into any contracts or with whom it engages in transactions of any kind; (ii) within two (2) years before holding office, has had a business relationship with or any interest in any private company with which the Authority has entered into any contracts or with whom it engages in transactions of any kind; (iii) has been, during the year immediately preceding his appointment, a member of a local or central directing body of a political party registered in the Commonwealth of Puerto Rico during his appointment; (iv) is an employee or official of the Authority or is an employee, member, advisor or contractor of the Authority’s labor unions; or (v) has failed to provide the certification of having filed income tax returns during the five (5) preceding taxable years issued by the Department of the Treasury, a certification of having no debts outstanding with the Authority, a Certificate of Criminal Record issued by the Puerto Rico Police Department, as well as negative certifications of the Child Support Administration (ASUME, Spanish acronym) and the Municipal Revenues Collection Center (CRIM, Spanish acronym). The Executive President and Executive Director of Infrastructure shall hold office for a five (5)-year term. The Regional Executive Directors shall hold office for a five (5)-year term. Regarding the appointments of the Executive President, of the Regional Executive Directors, and the Infrastructure Executive Director, the Board may provide, but shall not be construed as a limitation, the following:
(1) The duties, functions, obligations, and powers delegated by the Board to each one, in addition to those provided for hereinafter; Provided, That the Board may not delegate the function of approving all or part of any collective bargaining agreement with the labor unions representing the employees of the Authority, nor the remaining functions provided in subsections (d), (q), and (t) of this section; and
(2) the financial compensation to be paid during the term of his appointment, which may include fringe benefits and bonuses that facilitate the recruitment of professionals of the highest caliber.
(m) Functions of each Regional Executive Director.—
(1) To be responsible for administering and overseeing all assets and employees of the Commonwealth Aqueduct System and the Commonwealth Sewer System within their region.
(2) To design and present for evaluation and approval of the Executive President and then of the Board, the annual budget for his region. Once approved, he shall be in charge of managing said budget in coordination with the Executive President;
(3) To submit to the Infrastructure Executive Director, through the Executive President, the needs for capital improvements he identifies in his region, in order of priority, so that said needs be incorporated into the Capital Improvement Program in the short- and long-term.
(4) To meet with the elected officials of his region to satisfy the demands and needs of citizens;
(5) To submit a report to each mayor of his region and the Legislative Assembly on or before February 15th and August 15th of each year; and
(6) To have all the duties, powers, and authorities conferred by the Board, in accordance with the decentralized management structure adopted in §§ 141-161a of this title and as the needs of the Authority so require; however, the Board shall not delegate to a Regional Director the functions listed in subsection (l)(1) of this section.
(n) Functions of the Infrastructure Executive Director.—
(1) To prepare, in coordination with Regional Executive Directors, a Capital Improvement Program that meets the system’s needs in the short- and the long-term, and through the Executive President, submit said Program for approval of the Board of Directors.
(2) To administer and execute said Capital Improvement Program according to the priorities established by the Board and the budget and schedule provided for each work under this Program.
(3) To meet with the elected officials to address the claims and needs of the citizens.
(4) To submit a report to the Legislative Assembly on or before February 15th and August 15th of each year.
(5) To also have all the duties, powers, and authorities delegated to him by the Board, in accordance with the decentralized management structure adopted in §§ 141-161a of this title and as the needs of the Authority so require; however, the Board shall not delegate to him the functions listed in subsection (l)(1) of this section.
(o) The remaining executive officers of the Authority shall exercise the duties and obligations inherent to their offices and those other duties that the Board may establish. Unless the Board determines otherwise, the executive officers appointed by the Board may delegate to other persons the power of substituting for them during any period of justified absence, as determined by the Board through regulations.
(p) Without limiting other general provisions regarding improper conduct listed in this section, none of the designated Executive Officers, including the Executive President, the Infrastructure Executive Director and the Regional Executive Directors of the Authority while holding office, shall:
(1) Contribute money or make contributions either directly or indirectly to political organizations, candidates or parties while holding office;
(2) seek political office or engage in a political campaign to hold or support someone who runs for an elective public office or any position in the management or organization of a political party or to participate in partisan political campaigns of any kind while holding office;
(3) make public statements, comments, or remarks regarding partisan political issues or acts while holding office;
(4) coerce, obligate, command, or require other executive officers, officials, or employees to make financial contributions or carry out or engage in partisan political activities while they are on duty; or
(5) solicit while on duty, or coerce, obligate, or require other executive officers, officials, or employees to vote or further the political interests of his/her party or candidate of preference.
The Executive President, the Infrastructure Executive Director, and the Regional Executive Directors and other Executive Officers of the Authority may be removed from office by the Board only on the following grounds:
(1) Engaging in immoral or unlawful conduct, or conduct that violates the prohibitions provided for in §§ 141-161a of this title;
(2) Incompetence, manifest professional inability or negligence in the performance of their functions and duties;
(3) Being conviction for any felony or misdemeanor that implies moral turpitude;
(4) Clear abuse of authority or of the discretion bestowed upon them by this or other laws;
(5) Dereliction of duty; or
(6) Noncompliance with the work plan established or with the guidelines of the Board.
They may also be removed from office due to physical or mental disability which prevents them from performing their essential duties. Removals due to the inability to perform the essential duties of the office shall not be considered a dismissal. These officials shall be evaluated by the Board by means of performance metrics.
(q) When the Board evaluates the composition or modification of the initial regions provided for in §§ 141-161a of this title, concerning the delimitations thereof or the creation of new regions, it shall take into account the following elements in said analysis and shall be taken into account altogether, within the circumstances, at the time of making the final determination:
(1) The connectivity of the water transmission systems, the location of hydrographical basins, and the analysis of the best use of said resources;
(2) the assets and the state of said assets in the Commonwealth Aqueduct System and the Commonwealth Sewer System;
(3) the needs for improvements in the Commonwealth Aqueduct System and the Commonwealth Sewer System;
(4) the length of the network and the size of the service area that comprises the region under analysis;
(5) the population density and the number of current and projected users in the short, medium, and long term within the region;
(6) the projects proposed for the region within the Capital Improvement Program and all other strategic plans developed by the Board;
(7) the findings of noncompliance and orders of the environmental and health regulatory agencies, and
(8) the analysis of the cost-effectiveness of operating the region as is and the cost-effectiveness of operating the potential region under studied under the proposed modification.
The Board shall determine the weight it shall give to each of the above criteria, or others that in its judgment it should ponder, at the time of making decisions concerning the delimitations of the regions. Once the Board concludes any evaluation concerning modifications to the regions, it shall submit for the approval of the Legislative Assembly the determinations together with a report showing the study conducted upon which the Board has based its conclusions. The determination of the Board regarding the new composition of the regions shall be deemed to be approved if the Legislative Assembly, through a Joint Resolution, approves it as submitted by the Board. The Legislative Assembly shall approve or reject through Joint Resolution within a term not greater than ninety (90) days of Regular Session. Should no action be taken within said term, the determination of the Board shall be deemed to be approved. The Authority shall submit its first regional reorganization plan to the Legislative Assembly on or before June 1st, 2004, for its consideration and approval as provided above. The five (5) initial regions created herein are the Metro Region, North Region, South Region, East Region, and West Region. The study to be presented to the Legislative Assembly on June 1st, 2004, shall include the proposed delimitation of said regions.
(r) Subject to the provisions of subsection (d) of this section, all executive employees of the Authority shall be appointed, removed, and their compensation determined by the Board, upon recommendation of the Executive President. All executive employees shall be considered executive employees for purposes of the Puerto Rico Labor Relations Act. Executive employees shall not be subject to the administrative control of the private operator generally provided in subsection (w) of this section.
(s) The Board shall appoint an internal auditor who shall be attached and respond to thereto, and shall have the power to oversee all income, accounts, and expenditures of the Authority to determine whether the same have been made in accordance with the law and the determinations of the Board.
(t) The Board may delegate some of its powers, other than those listed in subsections (d), (m), and (p) of this section, to the Executive President who shall be the Chief Executive Officer of the Authority and shall be responsible to the Board for the execution of its general policy and the general supervision of the operational phases of the Authority. The Board may also delegate any of its powers, other than those listed in subsections (d), (r), and (u) of this section to one or more committees thereof or any other Executive Officer of the Authority.
(u) The Board may not delegate to any Board committee, Executive Officer, or private operator, the powers listed in this subsection and subsections (d) and (r) of this section, or any of the following powers:
(1) The approval the Authority’s budget.
(2) The approval of any financing for the Capital Improvement Program.
(3) The contracting of auditing firms.
(4) The hiring of external consultants of the Authority when the amount of the contract exceeds the amount determined by the Board through regulations.
(5) The approval of the sale or alienation on any other real property or real rights; Provided, That the Board may delegate to the Executive President or to any other Executive Officer of the Authority the execution of deeds of sale or alienation of real property or real rights.
(6) The approval of the regulations of the Authority and any amendment to or repeal thereof, including the determination of what constitutes just cause to remove an independent director.
(7) The appointment of the internal auditor.
(8) The approval of a three (3)-year operational efficiency and water loss control plan, to be amended every three (3) years, which includes specific initiatives and costs associated therewith, as well as the goals of the Authority. Such initiatives shall include a cost-benefit analysis of the Authority. Notwithstanding the foregoing, a strictly enforceable standard shall be established to measure the increase in the rate of recovery of water loss or unbilled, between 2016 and 2019. The required reduction shall be measured in terms of gallons per day produced in all facilities supplying the distribution system compared to the gallons per day billed to all customers. The net result of such comparison shall reflect at least a five percent (5%) increase in the rate of recovery of water loss or unbilled water, within the period from the date of approval of the act to September 30, 2019. No later than October 31st, 2019, the Authority shall file a report with the Secretary of the Senate and the Clerk of the House of Representatives, stating all the measures taken during the initial three (3)-year period stated above, including the projects under the Capital Improvement Program, meter replacement initiatives, and the distribution infrastructure rehabilitation efforts that have been implemented for the purpose of complying with the established operational efficiency standards.
(v) The Board, at its option, may enter into one or more management contracts with one or several private operators, which may be natural or juridical persons that the Board determines are qualified to assume, in whole or in part, the administration and operation of the Commonwealth Aqueduct System, the Commonwealth Sewers System and all those properties of the Authority, as provided in §§ 141-161a of this title. In the contracts entered into with one or several private operators, the Board may delegate to the private operator any of the powers that it may delegate to the Executive President, except those listed in subsections (d), (r), and (u) of this section.
(w) Regarding the management contracts.—
(1) Each management contract entered into with a private operator shall designate a director of operations, who shall be an employee or agent of the private operator. The director of operations of each private operator shall be responsible for supervising and managing all the tasks agreed upon with the private operator in the management contract. Furthermore, the director of operations shall be in charge of the general supervision of the operational phases of the Authority agreed upon in said contract, and of those additional functions that the Board agrees upon with said operator, by contract.
(2) The private operator or operators, through their respective directors of operations, shall have all the duties, functions, obligations, and powers that, subject to the limitations described in this section, are established in the management contract with the Authority, including the following:
(A) General administrative control of all the employees of the Authority.
(B) Negotiation of the collective bargaining agreement with the labor unions that represent the employees of the Authority and the duty and power to appoint, dismiss, and determine the compensation of all employees and agents of the Authority.
(C) Legal responsibility for all their actions in accordance with the duties, functions, obligations and powers set out in the contract with the Authority and the laws of Puerto Rico.
(D) Approval of changes to the organizational structure of the Authority; provided, that it does not affect executive employees and the structure provided in this section.
(E) Duty to file reports on the operational status and financial activities of the Authority required by law and the management contract entered into with the Authority.
(F) Duty to appear personally to file a semiannual report with the committees appointed by each of Legislative House.
(3) Private operators and their respective directors of operations shall not be deemed to be a public entity, public employer or public employee, as defined in §§ 141-161a of this title or in any other law or regulations.
(4) The management contract entered into with the private operator(s) shall require the private operator to post a bond in favor of the Authority. The Board shall establish the criteria to determine the amount of the bond, with the recommendation of the Insurance Commissioner.
(5) The management contract entered into by the Authority with one or several private operators shall expressly state that all documents, such as registers, bank accounts and other documents related to the operations of the Authority, shall be kept in the jurisdiction of the Commonwealth of Puerto Rico and shall belong to the Authority.
(6) Every management contract entered into by the Board with one or several private operators shall require that said operator(s) have no debts with government entities; and that if there were debts, they must have availed themselves of a payment plan. Moreover, private operators shall be required to have their accounts and obligations with government entities up to date. They shall also be required to fulfill their tax responsibilities with the Commonwealth of Puerto Rico.
(x) The Board shall comply with the CONSENT DECREE executed between the Authority and the Federal Environmental Protection Agency (EPA), CV-02283 on September 15th, 2015, to complete projects required to maintain water quality; and maintain the watersheds, beginning with the Caño Martin Peña, in San Juan (Appendix O and Capital Improvement Plan) and to expand the service of aqueducts to families, predominantly rural, that do not have it.
History —May 1, 1945, No. 40, p. 138, § 3; May 3, 1949, No. 163, p. 430, § 1; June 24, 1965, No. 76, p. 178, § 1; May 22, 1973, No. 31, p. 93, § 1; May 23, 1995, No. 47, § 3; Dec. 5, 1995, No. 227, § 1; Mar. 26, 1996, No. 19, § 1; Sept. 16, 1996, No. 232, § 1; Dec. 30, 1997, No. 210, § 1; Dec. 28, 1998, No. 328, § 2; June 30, 2002, No. 95, § 2; Mar. 31, 2004, No. 92, § 2; Dec. 21, 2006, No. 275, § 2; July 12, 2016, No. 68, § 2.15.