DLS review: Maryland Environmental Service finances steady, agency vows to finish project agreements by end of 2024

Maryland Environmental Service showed a small net operating gain in the most recent fiscal year, but analysts and agency leaders told the Senate Public Safety, Transportation and Environment Subcommittee on May 2 that oversight and contract documentation remain outstanding tasks.

Carrie Cook, the Department of Legislative Services analyst who presented the MES review, said MES reported a net operating income of $198,000 in fiscal 2023 and that a large share of the agency’s revenue comes from dredging and water and wastewater work, including operation and maintenance of facilities at correctional institutes and state parks. DLS highlighted an MES vacancy rate of about 3.7%, well below the state average and under the agency’s budgeted rate.

Cook told the committee that DLS followed up on work MES performed at the Back River plant and on associated reimbursements: "Because MES went into the plant, they were ordered by the secretary of MDE... the city reimbursed MES about $614,000 for their personnel and operating costs," she said, and noted those reimbursements are separate from any civil penalties arising from the related lawsuit.

Charles Glass, MES’s executive director, described management changes aimed at workforce stability and said the agency accepts several DLS recommendations. "MES concurs with a recommendation. We will continue to prepare the funding statements," he told the subcommittee, and he said MES intends to finish consolidating 79 separate project agreements into nine cumulative agreements "by the end of this calendar year, 2024." Glass stressed MES’s emphasis on safety, training and low overhead.

DLS also flagged a repeat Office of Legislative Audits finding involving written agreements for reimbursable projects and asked MES to explain the timeline for executing agreements and the rationale for consolidating them. MES leaders said they are working with legal counsel and expected the consolidation to reduce repeated legal sufficiency review time.

The subcommittee asked MES to keep the legislature informed through the agency’s annual funding statement and follow up on the OLA recommendation. The hearing produced no formal vote; committee members praised MES’s operational improvements but asked the agency to provide timelines and documentation for the outstanding agreement and audit items.