NMI Public Schools Assured Utilities Will Not Be Cut

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Millions owed for unpaid obligations from 2011 onward

By Moneth Deposa

SAIPAN, CNMI (Saipan Tribune, June 20, 2013) – Despite its huge arrears, the Northern Mariana Islands Public School System (PSS) has been assured that its schools will not be disconnected from the power and water grid, despite a disconnection letter from the Commonwealth Utilities Corporation (CUC).

CUC chief financial officer Charles Warren disclosed to Saipan Tribune that the supposed disconnection for public schools-scheduled to take effect on June 22-will no longer take place after a recent meeting with Gov. Eloy S. Inos.

"At this time, pursuant to the recent meeting held with the governor and PSS, there are no plans to disconnect," Warren said yesterday.

PSS acting finance director George Palican earlier disclosed that the system was issued a disconnection letter due to its unpaid obligations to CUC. As of last week, this notice has not been cancelled or withdrawn by the utilities corporation.

Saipan Tribune learned that the meeting between PSS and the governor was held on May 23 on Capital Hill.

Warren disclosed that it was agreed upon that PSS-which is currently being assessed the government rates for power and water-will pay lower charges beginning next fiscal year, when its bill will be calculated using commercial rates.

"The governor and PSS agreed that beginning with fiscal year 2014, PSS could pay to CUC the commercial rates and the central government would remit to CUC the difference between the government rates and commercial rates," said Warren.

He said the Executive Branch and PSS will draft a memorandum of understanding to formalize the agreement.

As of April this year, PSS owes CUC $4.9 million, representing unpaid obligations in fiscal years 2011, 2012, and 2013: some $4 million in fiscal years 2011 and 2012 and $900,000 in the first seven months of fiscal year 2013 (October through April).

Saipan Tribune learned that PSS pays CUC partially every month and has paid to date $1.6 million for the fiscal year 2013 obligation.

According to PSS officials, late charges-amounting to $250,000 in seven months-significantly contributed to the increasing debt with CUC. They want a waiver on these late charges.

Warren said yesterday that PSS' request for a waiver on late charges is not possible at this time.

"There are no plans at this time to waive the late charges. Our regulations require that late charges accrue at the rate of 1 percent per month on all past due balances. There are no exceptions in the regulations for government accounts," said Warren.

However, Warren said that PSS is free to appeal to the Public Utilities Commission for special consideration or a change in the regulations.

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